An authorization contract is defined in Article 562 of the 2015 Civil Code as follows: An authorization contract is an agreement between the parties, according to which the authorized party is obliged to perform work on behalf of the authorizing party, and the authorizing party only has to pay remuneration if there is an agreement or if the law so provides.
Accordingly, the authorization contract may or may not have remuneration depending on the agreement of the parties. And authorization in general, and authorization to buy and sell apartments in particular, is understood as a party "asking" a third party to carry out the purchase and sale of apartments on their behalf when that person is not able to do it himself.
According to this regulation, it can be seen that the contract of authorization for the purchase and sale of apartments does not cause the transfer of assets, which are apartments, from the seller to the authorized person. In essence, the purchase and sale is still a transaction between the buyer and the seller.
The authorized person is only an entity that "carries out the purchase or sale on behalf of the buyer or seller" or only acts on behalf of the buyer or seller, but does not establish ownership of the apartment for himself.
At the same time, according to the Law on Personal Income Tax and detailed guidance and regulations, individuals will have to pay personal income tax if they have income from buying and selling apartments.
The tax rate in the case of buying and selling apartments is 2% of the transfer or sale value stated in the apartment sale and purchase contract or according to the price prescribed by the Provincial People's Committee.
Thus, it can be affirmed that authorization does not generate income, therefore if the parties authorize the purchase and sale of apartments, they do not have to pay personal income tax.
