Công văn 34503/CT-HTr năm 2016 về chính sách thuế hoạt động chuyển nhượng bất động sản do Cục thuế thành phố Hà Nội ban hành

To:   Rhythm Precision Vietnam Co., Ltd.Address: Lot 42, Noi Bai Industrial Zone, Quang Tien, Soc Son, Hanoi;Tax code: 0101771390

In response to the Official Dispatch No. 268/CV-RPV dated October 08, 2015 of Rhythm Precision Vietnam Co., Ltd. regarding tax policies, Hanoi City Department of Taxation hereby gives guidance as follows:

- Pursuant to Clause 5 Article 10 of the Circular No. 156/2013/TT-BTC dated November 06, 2013 of the Ministry of Finance providing guidance on some Articles of the Law on Tax Administration, the Law on amendments to the Law on Tax Administration and the Government's Decree No. 83/2013/ND-CP dated July 22, 2013 introducing general regulations on tax declaration and calculation.

-  Pursuant to the Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance providing guidance for implementation of the Law on Value-added Tax and the Government’s Decree No. 209/2013/ND-CP dated December 18, 2013 prescribing VAT rates.

+ Point d Clause 8, Clause 20 Article 4 (Goods and services not subject to VAT) stipulates:

“8. Finance, banking and securities services, including:

d) Capital transfer, including transfer of a part of or the whole of capital invested in another business entity (whether a new legal entity is established or not), securities transfer, transfer of the rights to contribute capital, and other forms of capital transfer as prescribed by law, including business acquisition in which the acquirer inherits all rights and obligations of the acquired company as prescribed by law.”

“20...

Goods and services traded between foreign parties and entities in free trade zones and those traded between the entities in free trade zones…”.

+ Clause 4 Article 8 stipulates the time of determination of VAT as follows:

“Article 8. Time of determination of VAT

4. For real estate trading, construction of infrastructure facilities, and construction of houses for selling, transfer or lease, VAT shall be calculated when payment is made according to the project schedule or the payment schedule specified in the contract.   The business entity shall declare output VAT incurred in the tax period according to total collected amounts.”

-  Pursuant to Clause 2 Article 16 of the Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance providing guidance on the Government's Decree No. 51/2010/ND-CP dated May 14, 2010 and the Government's Decree No. 04/2014/ND-CP dated January 17, 2014 stipulating invoices for goods sale and service provision.

“Article 16. Issuing invoices

2. Methods for filling some specific items on an invoice

a) Item “Ngày tháng năm” (Date of invoice):

Date of a sale invoice is the date on which the ownership or the right to use goods is transferred to the buyer, whether payment has been made or not.

Date of a service invoice is the date on which the provision of service is completed, whether payment has been made or not. If prepayment for service has been made or payment is made during the provision of service, the date of invoice is the date of payment.

-  Pursuant to the Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance providing guidance on implementation of the Government’s Decree No. 218/2013/ND-CP dated December 26, 2013 providing guidance on implementation of the Law on Corporate Income Tax (coming into force from August 02, 2014 and applying to the tax period of 2014 onwards).

+ Clause 1 Article 14 stipulates incomes from capital transfer as follows:

“Article 14. Incomes from capital transfer

1. Scope of application: 

Income from capital transfer of an enterprise means the income earned from the transfer of a part or the whole of that enterprise’s investment in one or many other entities (including selling of enterprises). Time of determination of income from capital transfer is the time of transfer of capital ownership.

In case an enterprise sells an entire single-member limited liability company which it owns by transferring capital and real estate, it shall declare and pay CIT on real estate transfer and complete the CIT return (Form No. 08) enclosed herewith…

+ Article 16 stipulates taxpayers of CIT on incomes from real estate transfer as follows:

“Article 16. Taxpayers

1. Enterprises paying CIT on incomes from real estate transfer include: Enterprises in any economic sectors and fields that earn incomes from real estate transfer, and real estate enterprises earning incomes from sublease of land.

2. Incomes from real estate transfer include: incomes from transfer of land-use rights (LURs), land leasehold (including transfer of project in association with transfer of LURs or land leasehold as prescribed by law); Incomes from sublease of land by real estate enterprises as prescribed in the Land Law, regardless of availability of infrastructure and construction works on land;…;

Incomes from sublease of land by real estate enterprises do not include incomes of enterprises that only lease out houses, infrastructure or construction works on land”.

- Pursuant to Circular No. 151/2014/TT-BTC dated October 10, 2014 of the Ministry of Finance providing guidance on the Government's Decree No. 91/2014/ND-CP dated October 01, 2014 on amendments to Decrees on taxation.

+ Article 2 stipulates as follows:

Article 2. Amendments to Clause 14, Article 7 of the Circular No. 78/2014/TT-BTC

... In case the enterprise, after capital contribution, keeps transferring stakes in the form of LURs (including the case where capital is contributed before expiration of the 10-year period), the income from the transfer of stakes in the form of LUR shall be accounted for and declared as income from real estate transfer….”

Pursuant to the abovementioned regulations, Hanoi City Department of Taxation responds to your questions as follows:

1/ In case your company (an export processing enterprise) has contributed capital by LURs to establish Rhythm Kyoshin Hanoi Co., Ltd. together with Kyoshin Vietnam Co., Ltd. (that is also an export processing enterprise), and then transfers your stakes (i.e. LURs) to Kyoshin Co., Ltd., this transfer is considered capital transfer.

2/ Time of determination of income from capital transfer is the time of transfer of capital ownership, and CIT on transfer of capital in association with real estate must be declared and paid in accordance with guidance in Article 2 of the Circular No. 151/2014/TT-BTC dated October 10, 2014.

3/ Taxes shall be declared and paid as follows:

- Regarding VAT: The capital transfer by Rhythm Precision Co., Ltd. is not subject to VAT as prescribed in Point d Clause 8, Clause 20 Article 4 of the Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance;

- Regarding CIT: Rhythm Precision Co., Ltd. (an export processing enterprise) has contributed capital by LURs to establish Rhythm Kyoshin Hanoi Co., Ltd. together with Kyoshin Vietnam Co., Ltd. (that is also an export processing enterprise), and then transfers the contributed capital associated with LURs to Kyoshin Co., Ltd. Thus, Rhythm Precision Co., Ltd. must declare CIT on income from real estate transfer.

4/ Regarding invoice: When transferring capital associated with LURs, Rhythm Precision Co., Ltd. shall issue a sales invoice in accordance with Clause 2 Article 16 of the Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance.

5/ Regarding difference from revaluation of LURs:

When contributing capital by LURs in 2012, your company has recorded an increase in the contributed capital as a result from the revaluation of LURs on your company’s annual CIT declaration, and has notified the number of years that increase is aggregated with other incomes as prescribed. Until September 2015, your company has transferred the contributed capital (i.e. LURs) to Kyoshin Vietnam Co., Ltd., your company shall make declaration according to Clause 5 Article 10 of the Circular No. 156/2013/TT-BTC dated November 06, 2013 of the Ministry of Finance;

Hanoi City Department of Taxation has also sent an official dispatch to the General Department of Taxation for its opinions about your company’s questions.  Hanoi City Department of Taxation will give response to your company after receiving opinions from the General Department of Taxation if they are contrary to instructions given herein.

Kyoshin Vietnam Co., Ltd. is requested to comply with instructions herein.

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