Patching legal gaps to avoid “tax evasion”

Tacit agreement, “manufacturing” 2 parallel contracts

According to Ms. Ly Thi Hoai Huong, Deputy Director of the Tax Administration Department of Small and Medium Enterprises (General Department of Taxation), business households and individuals, in reality, there is a case of real estate transfer with the price shown. on the contract does not match the actual transaction price. Accordingly, buyers and sellers can agree and make two types of contracts in parallel: First, real estate transfer contracts are notarized and authenticated according to regulations with the declared house price much lower than the actual land price. transactions to carry out procedures for registration of volatility. Second, a handwritten contract signed by both parties and recorded at the actual transaction price to prevent disputes in court.

Along with that, there are many cases where the new dossier won the land auction after having the certificate of resale contract at a much lower price than the auction winning price or equal to the price of the People’s Committee of the province or city. With respect to a contract for the transfer of a contract to purchase and sell houses and construction works to be formed in the future, the value of the future house purchase and sale contract of the 2nd party to the 3rd party is only equal to that of the contract. equal to the purchase price of the investor or when the book is issued, the taxpayer (NNT) is willing to declare lower than the investor’s price, in order to evade taxes.

In some cases, the two parties buying and selling real estate do not sign a transfer contract but sign an authorization contract (in which the authorized person has the right to possess, use and dispose of the real estate). to avoid personal income tax (PIT) from real estate transfer.

“The management of real estate transfer is currently facing many difficulties, because it involves many laws as well as many agencies. The people’s sense of self-discipline to fulfill their tax obligations is not high. Tax administration agencies are also facing many difficulties because according to the tax law, taxpayers declare and pay tax not in accordance with the actual transfer price, the tax authority has the right to determine tax. However, the tax authorities do not have the investigating function, so it is difficult to collect information as a basis for tax assessment”, Ms. Ly Thi Hoai Huong stated in fact; At the same time, the General Department of Taxation also received reports from a number of localities that the dossier had been transferred to the police investigation agency, but the investigating agency transferred it back to the tax office for administrative handling because there were not enough grounds. identify tax evasion.

In addition, the regulation on the inter-related time limit for handling administrative procedures for real estate transfer activities for tax authorities is 5 working days. While the application file to the tax office is often close to the due date or late, leading to great pressure on the time to return the results of determining financial obligations on land.

“Current legal documents do not stipulate a mechanism to control cash flow for real estate transfer transactions, so it will create a legal gap for organizations and individuals to declare and pay taxes lower than the transaction value. actual translation”, the representative of the General Department of Taxation added.

Strictly handle violations

In order to ensure fairness among tax payers and avoid loss of tax revenue for real estate business, the General Department of Taxation is actively researching and consulting with relevant authorities to amend and supplement the tax agreement. a set of legal documents on tax related to the bases for calculating personal income tax, registration fee and corporate income. Supplementing regulations on payment via bank for real estate transfer in Article 16 of the Law on Real Estate Business No. 66/2014/QH13 dated November 25, 2014 and at the same time adding an investigation function for tax authorities.

“The tax agency will develop a topic of inspection – inspecting subjects and examining official duties in the field of notarization and tax management for real estate transfer activities at tax agencies. At the same time, develop a plan to inspect and detect tax evasion and tax frauds related to real estate business activities, implement tax assessment, tax arrears and sanction administrative violations. tax in accordance with the provisions of the law”, representative of the General Department of Taxation.

In addition, tax authorities will strengthen coordination with relevant agencies in tax administration for business activities and real estate transfer. Proposing the People’s Committee of the province and city to develop a scheme to prevent loss of revenue for real estate transfer activities and actively coordinate with relevant state management agencies to advise and report to the People’s Committee of the province and city to develop a Table of Contents. The land price is close to the common land price in the market.

Tax authorities at all levels will actively coordinate with the Department of Justice in directing notarial practice organizations in the area: propagandize and guide people to properly declare the purchase and sale prices in real estate transfer transactions. ; collect information, review the database to determine revenue, urge tax declaration and payment according to regulations, and will strictly handle organizations and individuals that commit violations, thereby step by step improve the efficiency of tax management for real estate trading and transfer activities”, the representative of the General Department of Taxation affirmed.

According to Diep Diep