Calculation of tax when transferring rights of using lease land

Thu, 16 Feb 2017 11:01:43 AM GMT + 7    Print   Email   Share:

Hong Yuan Hai Phong Vietnam Machinery manufacturing Co., Ltd. would like to propose a guideline on policies for VAT to transfer rights of using lease land and assets on the land leased by processing enterprises


For this issue, Hai Phong Tax Department have answers as follows:

Pursuant to Clause 10 of Article 7 of Circular No. 219/2013 / TT-BTC of the Ministry of Finance dated 31/12/2013 that prescribes taxable price for the transfer of real estate, taxable price is the price of transfer property minus land prices subtracted for VAT calculation as follows: "... a.3) In case leasing land for infrastructure investment with purposes for rent, building houses for sales, land price is subtracted to calculate the value added tax is the land tax that has to pay state budget (excluding exempted or reduced leasing land) and the cost of compensation and site clearance are in accordance with the law. In the case of leasing land for building houses to sales, since the date of 01.07.2014, it shall be carried out according to the Law on Land in 2013 ... ";

Pursuant to Article 11 of Circular No. 219/2013 / TT-BTC of the Ministry of Finance dated 31/12/2013 that regulates on the VAT rate to 10%;

Pursuant to Clause 3 of Article 13 of Circular No. 39/2014 / TT-BTC dated 03/31/2014 of the Ministry of Finance that prescribes the tax authorities provide the single invoices for sales of  goods and services defined as follows "... Organizations, households and individuals which need using single invoices must apply for these (form 3.4 Appendix 3 attached to this Circular). Based on the application for single invoices and attached purchase documents, the tax authorities have the responsibility to guide the taxpayers to determine the amount of payable tax under the provisions of the Law on tax. In case of provision of the single VAT, the payable VAT is the VAT amount indicated on the single VAT invoices.

Follow the instructions in Official Letter No. 5892 / TCT-CS dated 30/12/2014 of the General Department of Taxation on invoices and VAT.

Since the rules and guidelines described above, if the Company is the processing enterprises leasing land from Do Son Joint Venture Industrial Zone (money of leasing land is paid one time for the whole renting time), until 12 / 5/2015 the company signed a contract to transfer rights of using leasing land and assets related to land for Vietnam Honbase Industrial Co Ltd. (as local firms), this operation is not serving the business purpose of processing enterprise, thus they are subject to applicable VAT with rate of 10%. The taxable price is the total revenue from the transfer activities to minus the  amount of payable leasing land to the state budget for the rest leasing time (if any).

Company declares and pays VAT by declaration form No. 01 / VAT (issued Circular No. 26/2015 / TT-BTC dated 02/27/2015 of the Ministry of Finance) and the tax authorities to issue single VAT invoices as provided in clause 3 of Article 13 of Circular No. 39/2014 / TT-BTC dated 31/03/2014 of the Ministry of Finance.

  • By : Thu Hằng /Online Newspaper of the Government / Translator: HaiYen-Bizic


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