On April 12, 2024, the General Department of Taxation issued Official Letter No. 1517/TCT-CS regarding depreciation of fixed assets and income from real estate transfer.
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Regarding depreciation for fixed assets
According to legal regulations, if a business purchases an apartment for leasing purposes, and if there are no documents proving ownership by the business as per legal requirements, then it does not qualify to calculate the depreciation of the apartment as deductible expenses when determining taxable corporate income. The portion of depreciation exceeding the current regulations of the Ministry of Finance on the management, use, and depreciation of fixed assets will not be deducted when determining taxable income. The duration of fixed asset depreciation is carried out according to the regulations in clause 1, Article 10 of Circular No. 45/2013/TT-BTC dated April 25, 2013, by the Ministry of Finance.
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Regarding tax payment for income from real estate transfer activities
Based on legal regulations, if a business profits from real estate transfer activities, it must account separately to declare and pay corporate income tax at a rate of 22% (from January 1, 2016, a tax rate of 20% applies), and it cannot offset losses from other production and business activities (including apartment leasing operations).
