Pursuant to the provisions of Clause 9, Article 3 of the Law on Personal Income Tax 2007, there are regulations on income from inheritance as follows:
Article 3. Taxable income
Personal income taxable income includes the following types of income, excluding tax-exempt income as prescribed in Article 4 of this Law:
9. Income from inheritance is securities, capital in economic organizations, business establishments, real estate and other assets that must be registered for ownership or use.
Accordingly, inheriting land will be subject to personal income tax.
At the same time, according to Clause 9, Article 2 of Circular 111/2013/TT-BTC, individuals with income from inheritance of real estate must pay personal income tax, including:
Article 2. Taxable income
9. Income from inheritance
Income from inheritance is the income that individuals receive according to the will or according to the provisions of the law on inheritance, specifically as follows:
c) For inheritance of real estate, it includes: land use rights; land use rights with assets attached to land; ownership rights of houses, including future housing; infrastructure and construction works attached to land, including future construction works; land lease rights; water surface lease rights; other income received from inheritance of real estate in any form; deducted from income from inheritance of real estate as instructed in Point d, Clause 1, Article 3 of this Circular.
Accordingly, in the case of inheritors of real estate including the following types, they are subject to personal income tax:
- Land use rights;
- Land use rights with assets attached to land;
- Property of a house, including future housing;
- Infrastructure and construction works attached to land, including construction works formed in the future;
- Land lease rights;
- Water surface lease rights;
- Other income received from inheritance is real estate in any form.
Note: except for cases of inheritance exemption from personal income tax in Clause 4, Article 4 of the Law on Personal Income Tax 2007.
Accordingly, according to Clause 4, Article 4 of the Law on Personal Income Tax 2007, which stipulates income exempt from personal income tax, specifically as follows:
Article 4. Tax-exempt income
4. Income from inheritance and gifts is real estate between husband and wife; biological father, biological mother and biological child; adoptive father, adoptive mother and adopted child; father-in-law, mother-in-law and daughter-in-law; father-in-law, mother-in-law and son-in-law; paternal grandfather, paternal grandmother and grandchild; maternal grandfather, maternal grandmother and grandchild; brothers, sisters and siblings together.
Thus, in case of inheriting real estate from grandparents, personal income tax is not required.
