Ha Noi's rental market is experiencing rapid growth; particularly in the expat rental sector. — Photo vnexpress.net

HA NOI (Biz Hub)— The Department of Tax in Ha Noi will tighten its collection of landlord tax payments until the end of the year in an effort to crack down on tax evasion.

According to the municipal tax department, Ha Noi's rental market was experiencing rapid growth; particularly in the expat rental sector.

However, tax collection on rentals remained difficult, with reports of tax evasions occurring across the city.

Director of Tay Ho District's Tax Department Nguyen Huu Hung said that before 2009, a tax rate of 22.56 per cent was applied to rent.

From 2009, he further said, landlords were required to pay a value added tax (VAT) and personal income tax at progressive rates; prompting landlords to find ways to pay less tax on rental properties.

In an effort to reduce the number of tax evasions, the Ha Noi Tax Department will work with municipal police to inspect rental properties in each district with the temporary residence registry.

The tax department has said the lack of rental contracts between landlords and tenants will make the fight against tax evasion even more challenging.

Actual rental rates remain hard to verify due to payments made in cash without bills, the department said, adding that currently, there was no regulation on compulsory payments via the banking system. — VNS