Vietnam Rental Income Tax Guide 2026

Overview — Taxation of Rental Income

Rental income from real estate in Vietnam is taxable regardless of whether you are a resident or non-resident. The tax treatment depends on the taxpayer's status (individual vs corporate) and the scale of rental activity. For individual landlords (cá nhân cho thuê tài sản), the tax system offers two approaches: (a) the simplified deemed revenue regime (thuế khoán) which applies to most small-scale landlords, and (b) the actual expense deduction method which may benefit landlords with significant deductible expenses. Companies earning rental income are taxed under the standard CIT regime at 20% plus VAT at 10%.

Simplified Regime — Thuế Khoán (5% VAT + 5% IIT on Gross Revenue)

This is the most common tax regime for individual landlords. It applies automatically unless you elect otherwise. Under this regime, tax is calculated as a percentage of gross rental revenue (not net profit):

• VAT (Thuế GTGT): 5% of gross rental revenue (reduced from the standard 10% VAT rate for this specific activity).
• IIT (Thuế TNCN): 5% of gross rental revenue (a flat rate, not the progressive 5-35% schedule). This is because the law treats rental income from real estate as a special category subject to a deemed rate.
• Combined rate: Total tax = 10% of gross rental revenue (5% VAT + 5% IIT).
• License fee (Lệ phí môn bài): Annual fee of VND 300,000 - VND 1,000,000 depending on the scale of rental activity.

Threshold for thuế khoán: The simplified regime applies if you are an individual not engaged in business under a formal business registration. If your total annual rental revenue from all properties exceeds VND 100 million (approximately USD 4,300), you must register and pay tax. Below VND 100 million, you are exempt from VAT and IIT but may still need to declare.

Example: An apartment rented for VND 15,000,000/month (VND 180,000,000/year). Tax: VND 180,000,000 × 10% = VND 18,000,000/year (VND 9,000,000 VAT + VND 9,000,000 IIT).

Actual Expense Deduction Method

Instead of the simplified thuế khoán regime, individual landlords can elect to calculate tax based on actual income and expenses. This is beneficial when you have significant deductible expenses:

• Tax base: Net rental income = Gross rental revenue − Allowable expenses.
• IIT rate: Progressive IIT rates (5-35%) apply to net rental income as business income, not at the 5% flat rate.
• VAT: 10% of gross rental revenue (standard rate, vs 5% under thuế khoán).

Allowable deductions include:

• Depreciation of the property and furnishings
• Repair and maintenance costs
• Management fees (including property management company fees)
• Insurance premiums
• Interest on loans used to purchase or improve the property
• Utilities (if paid by the landlord)
• Property taxes and other local taxes
• Professional fees (legal, accounting)

Documentation required: All expenses must be supported by valid invoices and receipts (hóa đơn đỏ). The tax authority may require proof that expenses are directly related to the rental activity.

Comparison: If your deductible expenses exceed 50% of gross rental revenue, the actual expense method may result in lower total tax. For most residential landlords with low expenses, the thuế khoán method (10% of gross revenue) is simpler and often cheaper.

Progressive IIT for Large-Scale or Business Landlords

If your rental activity is of a commercial scale (e.g., multiple properties, regular business operations), the tax authority may classify you as a business (hộ kinh doanh) rather than a simple individual landlord. In this case:

• IIT: Progressive 5-35% on net business income (after expenses)
• VAT: 10% on gross revenue (or 1% under certain simplified business regimes)
• License fee: VND 300,000 - VND 3,000,000 per year depending on revenue
• Registration: You may need to register as a household business (hộ kinh doanh) with the tax authority

The threshold for classification as a business is not strictly defined and varies by province. Generally, owning 3+ rental properties or having annual rental revenue above VND 500 million may trigger business classification. Consult with a local tax advisor.

Corporate Rental Income

If rental income is earned through a company (Công ty TNHH, Công ty Cổ phần):

• CIT: 20% on net rental profit (gross revenue minus expenses and depreciation)
• VAT: 10% on gross rental revenue (output VAT). Input VAT on expenses (construction, repairs, furniture) can be credited
• Foreign ownership: Foreign-owned companies earning rental income from Vietnamese real estate are subject to the same CIT and VAT treatment as local companies
• Withholding tax: If the company pays dividends to foreign shareholders, a 0% or reduced rate under DTA may apply

Rental Income for Non-Residents

Non-residents earning rental income from real estate in Vietnam are subject to:

• IIT: Flat 20% on Vietnam-source rental income (no deductions, no progressive rates)
• VAT: 10% on gross rental revenue (or 5% under the simplified regime)
• DTA impact: Most DTAs provide that income from immovable property is taxable in the country where the property is located (Vietnam). So even if you are resident in another country, Vietnam taxes your rental income from Vietnamese property. The DTA does not provide an exemption.
• Agent requirement: Non-resident landlords must appoint a tax agent or representative in Vietnam to file and pay taxes on their behalf

Filing and Payment Procedures

• Registration: Register with the local tax authority (Chi cục Thuế) where the property is located. You will receive a tax code (MST) and may need to register as a household business.
• Filing frequency: Tax returns must be filed quarterly (or monthly if the revenue is high) with an annual finalization by March 31. Under the thuế khoán regime, some provinces allow a single annual declaration with quarterly payments.
• Payment: Tax can be paid at the tax office, via the e-tax portal (thuedientu.gdt.gov.vn), or through the national tax payment gateway.
• Contract registration: Rental contracts must be notarized or registered at the local tax office for contracts exceeding 12 months (varies by province).
• Penalties: Late filing and late payment attract penalties of VND 2,000,000 - VND 25,000,000 plus late payment interest of 0.03%/day.

Tax Optimization Tips

• Compare regimes: For most residential landlords with moderate expenses, the thuế khoán regime (5% VAT + 5% IIT = 10% of gross revenue) is simpler and often cheaper than the actual expense method.
• Document expenses: If your deductible expenses are high (mortgage interest, major repairs, management fees), elect the actual expense method and keep proper invoices. The 10% thuế khoán rate may be higher than progressive IIT on net profit.
• Split contracts: Some landlords split their rental contract into separate service components (e.g., cleaning, utilities) which may attract lower tax rates. This is a gray area — the tax authority may challenge artificial splits.
• Depreciation: If using the actual expense method, claim depreciation on the property (excluding land) and furnishings. Building depreciation is typically 5-7% per year (15-20 years useful life).
• Property holding structure: For high-value properties, holding the property through a company may provide better tax outcomes (CIT 20% vs progressive IIT up to 35%). However, the company structure has higher compliance costs.

FAQs

What is the thuế khoán rate for rental income?

The thuế khoán (deemed revenue) regime imposes a total tax of 10% on gross rental revenue: 5% VAT + 5% IIT. This is a simplified flat rate, not the progressive IIT schedule. It applies to individual landlords who are not registered as businesses. The rate is the same regardless of the rental amount (no brackets).

Is rental income tax-free below VND 100 million per year?

Rental income below VND 100 million per year is generally exempt from IIT and VAT. However, you should still declare the income to the tax authority. If you have multiple tenants or properties and the total annual revenue exceeds VND 100 million, you are required to register and pay tax on the entire amount (there is no lower threshold exemption).

Can I deduct mortgage interest against rental income?

Yes, if you use the actual expense deduction method, mortgage interest on loans used to purchase or improve the rental property is deductible. However, under the thuế khoán regime, no deductions are allowed (tax is based on gross revenue). If you have significant mortgage interest, the actual expense method may result in lower tax overall.

How do I register to pay rental income tax?

You must register with the local tax office (Chi cục Thuế) where the property is located. Bring your rental contract, personal ID (CCCD/CMND), proof of property ownership, and the completed tax registration form. If you are a foreigner, you need your passport, visa, and rental contract. Registration is free. After registration, you can file and pay taxes electronically.

What are the penalties for not declaring rental income?

Failure to declare rental income can result in: (a) fines for late filing (VND 2,000,000 - VND 25,000,000 depending on delay period); (b) late payment interest at 0.03%/day on unpaid tax; (c) if the tax authority discovers undeclared income, back taxes for up to 5-10 years plus penalties; (d) in severe cases of tax evasion, criminal prosecution under the Penal Code. The tax authority increasingly cross-references rental data from apartment management, utilities, and notary records.

Disclaimer

This guide provides general information about rental income taxation in Vietnam for the 2026 tax year. Tax rules, rates, and filing requirements may change. Always consult with a qualified Vietnamese tax advisor or accountant for advice specific to your rental property situation. InvestmentKit does not provide tax or legal advice.