Công văn số 13610 TC/CST ngày 22/11/2004 của Bộ Tài chính về việc thuế GTGT và thuế TNDN đối với doanh nghiệp di chuyển địa điểm kinh doanh theo quy hoạch

To: Provincial/municipal Tax Departments

The Finance Ministry has received official letters from some enterprises asking for guidance on value added tax and business income tax applicable to enterprises relocating their production/business establishments under planning of competent state agencies upon ground clearance and compensation involving the liquidation, sale or transfer of assets. Concerning this matter, the Finance Ministry provides guidance as follows:

1. On value added tax

Enterprises, which, upon relocation of their production/business establishments under planning of competent state agencies, liquidate, sell or transfer assets subject to value added tax, shall have to calculate, declare and pay this tax according to guidance in the Finance Ministry’s Circular No. 120/2003/TT-BTC of December 12, 2003 guiding the implementation of the Government’s Decree No. 158/2003/ND-CP of December 10, 2003 which details the implementation of the Value Added Tax Law.

2. On business income tax

When relocating their establishments under planning of competent state agencies, if enterprises are supported with relocation funding by the State and get compensations for assets on land, the remaining value of these supports and compensations, after subtracting the relevant expenses (if any), shall not be subject to business income tax but shall be accounted into enterprises’ profits from other activities, then transferred to capital construction investment sources. Where the value of support funding and compensations is lower than the value of relevant expenses, enterprises shall be entitled to account the deficit as a loss.

Where an income arises from the transfer of land use rights or land renting rights as a result of relocation of enterprises under planning, they shall comply with Point 3, Section II, Part C of the Finance Ministry’s Circular No. 128/2003/TT-BTC of December 22, 2003 guiding the implementation of the Government’s Decree No. 164/2003/ND-CP of December 22, 2003, which details the implementation of the Business Income Tax Law.

The Finance Ministry hereby notifies the aforesaid guidance to provincial/municipal Tax Departments for knowledge and implementation.

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