What taxes must an individual pay when leasing out offices or factories in Vietnam in 2026? The straight answer: only two taxes — VAT and personal income tax (PIT) — and only when annual rental revenue exceeds VND 1 billion. License fees were abolished from 01/01/2026, presumptive (khoán) taxation has been scrapped, and the old VND 100 million threshold is history. This article covers the calculation formulas with illustrative examples, the new filing procedures, and five common mistakes to avoid.
Table of contents
- Quick answer: 2 taxes, the 1-billion threshold, and 2 things that are “dead”
- How the VND 1 billion/year threshold works
- VAT and PIT formulas + illustrative examples
- Multiple properties in different locations
- Filing procedures: where, which forms, which deadlines?
- Checklist for tenant companies to secure deductible expenses
- Five common mistakes
- Frequently asked questions
- Sources
1. Quick answer: 2 taxes, the 1-billion threshold, and 2 things that are “dead”
From 2026, individual lessors of offices and factories only need to think about two taxes:
- VAT and PIT — arising only when annual rental revenue exceeds VND 1 billion;
- License fees: abolished from 01/01/2026 under Article 10.7 of Resolution 198/2025/QH15 (ending license-fee collection) — no longer payable from 2026;
- Presumptive taxation: scrapped — individuals self-determine actual revenue for declaration; the authority no longer imposes a fixed deemed tax.
Note: below the VND 1 billion/year threshold no VAT or PIT is payable, but tax registration and full declaration remain mandatory.
2. How the VND 1 billion/year threshold works
The VND 1 billion/year threshold applies uniformly to both taxes:
- VAT: Article 5.25 of the VAT Law 48/2024/QH15 (effective 01/7/2025), as amended by Law 149/2025/QH15 (effective 01/01/2026) — goods and services of business households and individuals with annual revenue of VND 1 billion or less are not subject to VAT;
- PIT: Articles 7.1 and 7.4 of the PIT Law 109/2025/QH15 (effective 01/7/2026, applicable to tax year 2026; replacing Law 04/2007/QH12) — business households and individuals with revenue of VND 1 billion/year or less pay no PIT.
The old VND 100 million/year threshold is entirely obsolete — any document, accounting software or “experience” still applying it is out of date.
3. VAT and PIT formulas + illustrative examples
When revenue exceeds VND 1 billion/year, the formulas are (per Article 3 of Decree 68/2026/ND-CP and Article 7.4 of Law 109/2025/QH15):
- VAT = 5% × total revenue — note: on the entire revenue, with no 1-billion deduction. The 5% rate applies to house leasing per item 2, Appendix I of Circular 69/2025/TT-BTC;
- PIT = (annual revenue − VND 1,000,000,000) × 5% — the 1-billion portion is deducted before computing PIT.
The key point: there is only one computation method — a percentage of revenue; the (revenue − expenses) × rate formula does not apply to individual real-estate leasing.
Illustrative examples (computed per implementation guidance; for illustration only):
- VND 900 million/year revenue → below threshold → VND 0 tax (but declaration still required);
- VND 1.5 billion/year → PIT = (1,500 − 1,000) × 5% = VND 25 million; VAT = 1,500 × 5% = VND 75 million; total VND 100 million;
- VND 2.5 billion/year → PIT = (2,500 − 1,000) × 5% = VND 75 million; VAT = 2,500 × 5% = VND 125 million; total VND 200 million.
4. Multiple properties in different locations
Individuals leasing several offices or factories in different locations may apply the VND 1 billion deduction to one or more contracts of their choice, with total deductions capped at VND 1 billion/year (Article 4.4, Decree 68/2026/ND-CP). The usual tactic: concentrate the deduction on the highest-revenue contract to minimize PIT.
Filing location: file with the tax authority where the leased property sits; with properties in multiple localities, file one consolidated dossier and pay tax per location (Article 8.4, Decree 68/2026/ND-CP).
5. Filing procedures: where, which forms, which deadlines?
The new procedural framework from 05/3/2026: Circular 18/2026/TT-BTC replaces Circular 40/2021/TT-BTC and Circular 100/2021/TT-BTC (Article 9, Circular 18/2026). The new forms:
- Form 01/BĐS with Appendix 01/BK-BĐS: self-declaration by individuals for real-estate leasing;
- Form 01/CNKD: leasing of non-real-estate assets;
- Form 01/TCKT: organizations declaring and paying on behalf of individuals.
Deadlines (Article 8, Decree 68/2026/ND-CP):
- Revenue ≤ VND 1 billion/year: notify actual revenue no later than 31 January of the following year;
- Revenue above the threshold: declare and pay from the quarter in which revenue exceeds VND 1 billion.
Many leases provide for the tenant to declare and pay on the lessor’s behalf — this must be stated expressly in the contract, using form 01/TCKT.
6. Checklist for tenant companies to secure deductible expenses
- A complete lease contract: lessor, tenant, area, purpose, rent, term, and which party declares/pays tax on behalf;
- Payment vouchers: remittance slips and bank statements for each payment period;
- Handover minutes for the premises/factory at the start and end of the lease;
- Where the company pays tax on the lessor’s behalf: state it in the contract + keep the 01/TCKT return and payment vouchers as the accounting basis;
- Cross-check the lessor’s personal details (ID card, tax code) between the contract and the return.
7. Five common mistakes
- Still applying the VND 100 million/year threshold — the current threshold is VND 1 billion/year for both VAT and PIT;
- Still citing Circular 40/2021/TT-BTC — repealed from 05/3/2026; the current framework is Circular 18/2026/TT-BTC and Decree 68/2026/ND-CP;
- Skipping declaration when below the threshold — under VND 1 billion no tax is due, but registration, declaration and actual-revenue notification remain required;
- Contracts silent on who pays tax on whose behalf — disputes arise on reassessment, and the tenant lacks a basis to book the substitute payment as an expense;
- Believing license fees still apply — abolished from 01/01/2026; from 2026 only VAT + PIT (above the threshold) remain.
8. Frequently asked questions
An individual leases an office with VND 800 million/year revenue. Any tax due?
No VAT or PIT (below the 1-billion threshold), but tax registration, declaration and actual-revenue notification by 31 January of the following year remain required. No license fee either, as it was abolished.
Is the 5% VAT computed on total revenue or only the excess over 1 billion?
On total revenue. For VND 1.5 billion revenue, VAT = 1.5 billion × 5% = VND 75 million. Only PIT allows the 1-billion deduction.
What about leasing a factory bundled with security and cleaning services?
This article covers pure asset leasing only. Bundled services may be treated differently — check the current rules rather than inferring from the old framework.
Must a company leasing from an individual withhold tax?
It depends on the contract. If the contract provides for the company to declare and pay on the lessor’s behalf, the company uses form 01/TCKT.
Does presumptive (khoán) taxation for house leasing still exist?
No. It has been scrapped; individuals self-determine actual revenue for declaration under Decree 68/2026/ND-CP.
9. Sources
- VAT Law 48/2024/QH15 — effective 01/7/2025: Article 5.25 (VAT-exempt threshold), as amended by Law 149/2025/QH15 (effective 01/01/2026 — raising the threshold to VND 1 billion/year);
- PIT Law 109/2025/QH15 — effective 01/7/2026, applicable to tax year 2026 (replacing Law 04/2007/QH12): Articles 7.1 and 7.4 (1-billion threshold; PIT = (revenue − 1 billion) × 5%);
- Decree 141/2026/ND-CP — effective 01/01/2026: Article 1.1 (new VND 1 billion/year threshold, replacing the former threshold);
- Decree 68/2026/ND-CP — issued and effective 05/3/2026: Article 3 (VAT percentage rate), Article 4.4 (1-billion deduction across multiple properties), Article 8 (declaration and payment deadlines);
- Circular 18/2026/TT-BTC — effective 05/3/2026 (replacing Circulars 40/2021/TT-BTC and 100/2021/TT-BTC): Article 9; forms 01/BĐS, 01/BK-BĐS, 01/CNKD, 01/TCKT;
- Circular 69/2025/TT-BTC: item 2, Appendix I (5% rate for house leasing);
- Resolution 198/2025/QH15: Article 10.7 (license-fee abolition from 01/01/2026).
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Leasing or renting offices or factories and need a review of tax obligations or a properly drafted lease? Contact FLAT Law Firm for advice.
Disclaimer
This article is for general reference only and does not constitute legal advice for any specific case. It was drafted by AI and is awaiting review by the QA Council; it has not been reviewed or approved by a human lawyer. Regulations may change; please check the current legal texts or consult a lawyer before applying.
