Tightening the declaration of the sale price of real estate helps the tax authority of Ho Chi Minh City to collect more budget, but the settlement procedure is lengthy because 5 submissions have one returned because the price is too low.
Since before the Lunar New Year until now, Ms. Tran Thi Vien (29 years old, real estate broker) submitted 7 sets of documents for real estate transfer in Thu Duc City. It took 4 months, until April 18, she received a red book.
With many years of experience in real estate services, Ms. Vien said that up to 25 days before the application is submitted, the red book will be obtained, 15 days to receive the tax notice and 7-10 days after receiving the book. And now, she is “tired” of not finishing a set. “Many times waiting for hours just to receive an answer waiting for taxes. Some days it takes a whole day to go home empty-handed,” she said.
According to Ms. Vien, the reason is that the tax authorities tighten the control of transaction prices, many documents are returned because the transfer rate is lower than the market price, which prolongs the time. “Instead of “declaring anything” as before, I now advise customers to declare the actual value so that their documents are not returned and have a quick book”, she said.
Similarly, Mr. Pham Duy (31 years old, living in Thu Duc City) submitted a set of real estate documents from January 18, but did not receive a tax notice until April 18. This is the 6th time he has gone to do land transfer documents and also the longest time. Previously, it took about a month for him to complete the procedure and receive the red book.
Mr. Duy said that he had bought a piece of land in the old district 9 for about 600 million VND, but only declared more than 100 million VND and was still accepted. However, since the tax has tightened the declaration of transaction prices, investors have told each other to declare the correct price, otherwise they will be returned and waited for a long time.
Ms. Vien and Mr. Duy are two of nearly 2,000 cases where real estate records in Thu Duc City were returned to adjust tax declaration levels after the Ministry of Finance had documentary on January 12 on the fight against tax loss in real estate sales. This requirement comes before the common fact that the transfer price is lower than the actual price in order to avoid tax. The tax branches in Ho Chi Minh City then simultaneously tightened the price control.
According to the statistics of the first quarter, the City Tax Department has proposed to adjust nearly 10,900 out of a total of more than 48,300 records, accounting for 22% – that is, about one set of every 5 submitted documents is returned to fix the price. The amount of additional tax collected is 147 billion VND, equal to 83% of the whole year of 2021. In which, Thu Duc City Tax Department alone has paid nearly 2,000 out of a total of more than 10,700 dossiers, collecting more than 92 billion VND.
According to Deputy Tax Department of Thu Duc City Than Thiet Son, people have often transferred real estate at a very high market price, but when declaring it to the tax office, they quote a very low price. With the new regulations, tax officials must determine the appropriate price and convince people to declare correctly, so the workload is very large. “If there is not a “price fight” under the new regulations, the settlement of the application will “certainly not be delayed”, Mr. Son said.
Currently, in order to correctly calculate the declared value in a real estate purchase and sale contract, the tax authority relies on three main data sources, including: transaction history declared in the most recent time; a number of documents have been declared and submitted to the tax authorities of similar properties; look up the price approved by the City People’s Committee with projects, or the actual compensation price of the state, the price on transaction websites…
Mr. Son said with the dossier “not having to consider price adjustment”, this agency resolved in 5 days. If the transfer rate is lower than the actual transaction price, the tax authority will send an invitation to people to reconsider. Within 15 days, people did not respond, the tax authority returned the dossier to the land registration office to request additional taxpayers.
“One day, only about 10 documents need to fight the price, it won’t solve much compared to the quantity received, so the pressure is great. People argue back and forth, make an appointment to come back and forth”, Mr. Son said. Despite assigning 15 staff to specialize in handling real estate documents, Thu Duc City Tax Department still faces an overload of housing procedures in the area, now more documents have to “fight the price” and it takes a long time. to handle.
The leader of Thu Duc Tax Department said that after the process of struggle, many cases of declaring the selling price increased dozens of times compared to the original. For example, a plot of land of nearly 12,000 m2 (land for perennial crops and aquaculture) in Tang Nhon Phu B ward declared the transfer price as one billion dong. After being asked to adjust by the tax authority, the selling price of the land lot increased to 40 billion VND, 40 times the original price.
From the perspective of the enforcement agency, Mr. Son suggested that the People’s Committee of Ho Chi Minh City soon issue the minimum land price list for general application, making it easier for officials to determine the price as well as to convince the people; at the same time, it is necessary to have general guidance soon to handle the declaration of incorrect transaction price.
Deputy Tax Department of Ho Chi Minh City Thai Minh Giao said that although it collected more money, the tax authorities had difficulties in contacting taxpayers, which made the processing of dossiers take longer than before. Specifically, many real estate transfer documents are made through service providers with non-submitter’s contact information, leading to delays in processing, requiring additional documents.
Talking about the solution to help the process of processing real estate transfer documents faster, Mr. Giao said that the main problem is that taxpayers voluntarily declare the actual real estate transfer price. When the dossier is returned, people need to coordinate to explain and adjust if there is a price difference.
According to Mr. Giao, since mid-April, the Tax Department of Ho Chi Minh City has sent a document to tax branches, clearly stating that “it is strictly forbidden to arbitrarily cause difficulties and troubles for taxpayers such as returning documents, invite taxpayers to explain without specifying the reason”.
Accordingly, the cases where the tax authority requires the taxpayer to explain must have an invitation letter. The meeting should be recorded in writing, accompanied by supporting documents as a legal basis for tax adjustment and later control (bank reconciliation, coordination with notary office, branch of land registration office) ), avoid filing delay.
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