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MINISTRY OF FINANCE
GENERAL DEPARTMENT OF TAXATION
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No. 680/TCT-CS
Re: VAT
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CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM
Độc lập - Tự do - Hạnh phúc
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Hanoi, February 18, 2025
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To:
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Hanoi Tax Department;
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Anh Sao Trading and Development Company Limited.
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The General Department of Taxation has received Document No. 03/Anh Sao dated April 16, 2024, and Document No. 05/Anh Sao dated August 16, 2024, from Anh Sao Trading and Development Company Limited regarding VAT. In response, the General Department of Taxation has the following comments:
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Regarding the Land Price Deductible for VAT Calculation
The determination of the land price deductible for VAT calculation in real estate business activities: (i) Before September 12, 2022, it shall be carried out according to the provisions in Point a, Clause 3, Article 4 of Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government; (ii) From September 12, 2022, it shall be carried out according to the provisions in Clause 1, Article 1 of Decree No. 49/2022/ND-CP dated July 29, 2022, amending and supplementing Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government regulating in detail and guiding the implementation of some provisions of the VAT Law as amended by Decrees No. 12/2015/ND-CP, No. 100/2016/ND-CP, and No. 146/2017/ND-CP.
Articles 48 to 53 of the 2014 Real Estate Business Law regulate the transfer of all or part of a real estate project.
Point d, Clause 3, Article 2 of Decree No. 209/2013/ND-CP dated December 18, 2023, of the Government stipulates that: Organizations and individuals transferring investment projects for the production and trading of goods and services subject to VAT for enterprises and cooperatives are not required to declare and pay VAT.
Based on the above regulations, to determine the land price deductible when calculating VAT for real estate business activities (selling houses), Anh Sao Trading and Development Company Limited needs to clarify the nature of the transfer transaction between Thái Sơn Construction Investment Joint Stock Company and Anh Sao Trading and Development Company Limited. The transaction should be determined as an investment project transfer subject to VAT exemption or a real estate project transfer under real estate business activities to apply the tax policy appropriately.
If the transaction is confirmed as a real estate business transaction, a VAT rate of 10% should be applied.
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Regarding the Determination of the Deductible Land Price for 1m² of House for Sale and the VAT Calculation for Invoice Issuance Based on Payment Progress
Before the effective date of Decree No. 49/2022/ND-CP dated July 29, 2022, and Circular No. 13/2023/TT-BTC dated February 28, 2023, of the Ministry of Finance: The determination of the deductible land price for 1m² of house for sale and the VAT calculation for issuing invoices based on the payment progress shall be carried out according to the provisions in Point a.7, Point b, Clause 10, Article 7 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance guiding the implementation of the VAT Law and Decree No. 209/2013/ND-CP of the Government.
From the effective date of Decree No. 49/2022/ND-CP and Circular No. 13/2023/TT-BTC, the VAT calculation for issuing invoices based on payment progress should follow the provisions in Clause 1, Article 1 of Circular No. 13/2023/TT-BTC.
On November 26, 2024, the National Assembly passed the VAT Law No. 48/2024/QH15. The General Department of Taxation has acknowledged the comments and forwarded Anh Sao Trading and Development Company Limited’s issues to the Department of Tax Policy Monitoring of the Ministry of Finance for further review and guidance when issuing the implementation documents for the VAT Law No. 48/2024/QH15.
The General Department of Taxation has provided these comments for the Hanoi Tax Department and Anh Sao Trading and Development Company Limited’s information.