If I receive the inherited property, do I have to pay personal income tax or not?

As specified in Circular 111 in 2013 of the Ministry of Finance, inherited property is considered as income, so we have to pay personal income tax. However, the tax law also stipulates each specific case to determine whether to pay tax or not to pay tax.

The following are cases where tax must be paid:

• Inherited securities or assets equivalent to securities.
• Inherited capital in economic organizations and businesses.
• Inherited real estate: rights to use land, ownership of houses.
• The ownership and use rights of other inherited assets (cars, motorbikes, ships, …)

The following are cases that are tax-free incomes:

• Incomes from inherited real estate between husband and wife, parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grand-children, and among siblings.
• Incomes from inherited real estate, the ownership and use rights of other inherited assets, inherited securities, inherited capital in economic organizations and businesses in which the heirs have a marriage relationship, bloodline, or legal rearing.       

 In conclusion, we have solved the question, incomes from inheritance is the taxable incomes or not? and which cases must pay tax, which cases do not pay tax. Next, we will continue to clarify how to determine the personal income tax payable when receiving inheritance, including two contents: taxpayers and tax calculation methods.

Taxpayers are residents whose taxable income arises within or outside the Vietnamese territory; and not residents whose taxable income arises within the Vietnamese territory.

Tax calculation:

Personal income tax payable on income from inheritance is determined as follows:

Personal income tax payable (=) Assessable income (x) 10%

The assessable income from inheritance is the excess over 10 million VND of the inheritance received.

Note: The value of inherited property is determined for each case as follows:

• The assessable income from the inherited securities is the excess over 10 million VND of the inheritance received, calculated on all securities codes received, not excluding any cost.
• For inheritance being securities: Taxable income from inheritance being securities is the value of the inherited property exceeding VND 10 million, calculated on all securities codes received, excluding any deductions. any cost.
• The assessable income from the inheritance being contributions to businesses is the value of the contributions based on their latest book values of the companies before the contribution ownership is registered.
• The assessable income from the inherited real estate is the value of real estate.
• For inheritances being other assets of which the ownership or rights to use must be registered with state agencies: the value of assets is based on the prices imposed by the People’s Committee of the province.
• The time of determining taxable income from inheritance is the time when the person registers the ownership or rights to use inheritance

In conclusion, the assessable income from inheritance is the excess over 10 million VND of the inheritance received.