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Tax evasion on rental houses on the rise
Tax evasion on rental houses has become more common and complicated in Ha Noi, especially in Tay Ho District where the business has developed rapidly.
The Tax Department in Tay Ho District reported the area was booming with many houses available for rent and a predominantly foreign clientele.
In Quang An precinct alone, nearly 800 families are renting out their houses. This type of business is mostly concentrated in two new urban areas - the Nam Thang Long-Ciputra and along the West Lake side of Quang An precinct.
By the end of last year, the total number of families leasing their houses in this area rose to 2,300, accounting for nearly 50 per cent of the individual household businesses and 80 per cent of tax payments from individual household businesses in the district.
An official from the Tay Ho District Tax Department who wanted to remain anonymous said over the past few years, the Department had taken several measures to strengthen tax administration on house rentals in the area.
However, tax collection from this kind of business was often tricky as many families tried to avoid tax by not registering for payment. Some families had deliberately made two contracts on a rental house and showed the Tax Department the one with an artificially low rent in order to pay lower tax, he said.
This practice has reportedly been carried out in collusion between house owners and tenants, he said.
To avoid paying taxes, some families have collected rental fee though banks without reporting information about tenants in an attempt to avoid scrutiny from tax authorities.
To deal with the problem, the Tay Ho District Tax Department has worked with local police to implement effective preventative measures and regularly exchanges information about tax policy with local police so they can disseminate details and encourage those who have their house up for lease to voluntarily pay tax.
The Tax Department has also provided local police with information about families leasing their houses to help police review temporary residences in the local area.
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