HCMC: 'Two-price' real estate deals raise tax evasion alarms

The People's Procuracy of Ho Chi Minh City has issued a critical recommendation to the city's tax department, highlighting a pervasive issue of property underreporting aimed at evading taxes. This move underscores a growing concern within Vietnamese legal and financial authorities regarding the integrity of real estate transactions and their impact on state revenue.

Statistics reveal a disturbing trend: approximately 27% of civil cases related to land and property transfers involve parties colluding to declare significantly lower prices on official documents than what is actually exchanged. This practice not only reduces personal income tax and registration fees but also leads to substantial losses for the state budget, as detailed in the procuracy's findings.

Examples cited by the procuracy paint a stark picture of the scale of this evasion. One case in Binh Duong (formerly part of HCMC) saw a transaction declared at 3.5 billion VND, while the actual price was a staggering 14.5 billion VND – an 11 billion VND difference. Another instance in Thu Duc City involved a property declared at a mere 200 million VND, yet its real value was 3.4 billion VND, a 17-fold discrepancy. Such vast differences suggest a systemic problem that undermines fair market practices and tax compliance.

The procuracy's recommendation for specialized inspections and data mining from court rulings aims to curb this illicit activity. By cross-referencing official filings with judicial records and market data, authorities hope to identify and penalize those who deliberately misrepresent property values. This proactive approach is essential to maintain transparency in the real estate market and ensure equitable tax collection, reflecting a commitment to upholding the rule of law and safeguarding national economic interests.