Is VAT declaration required when the enterprise not engaged in real estate business transfers land use rights in Vietnam?

Is VAT declaration required when the enterprise not engaged in real estate business transfers land use rights in Vietnam?

Pursuant to Clause 10, Article 7 of Circular 219/2013/TT-BTC, as amended by Clause 1, Article 1 of Circular 13/2023/TT-BTC, the regulation is as follows:

Taxable Price

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10. For real estate transfer activities, the VAT taxable price is determined according to the provisions of Clause 1, Article 1 of Decree No. 49/2022/ND-CP dated July 29, 2022, of the Government of Vietnam.

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Referencing Clause 1, Article 1 of Decree 49/2022/ND-CP, the regulation is as follows:

Amendment and Supplementation of Certain Articles of Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government of Vietnam Detailing and Guiding the Implementation of Certain Articles of the Law on Value-Added Tax as amended and supplemented according to Decree No. 12/2015/ND-CP, Decree No. 100/2016/ND-CP, and Decree No. 146/2017/ND-CP

1. Amend and supplement Clauses 3 and 4 of Article 4 as follows:

“3. For real estate transfer activities, the VAT taxable price is the real estate transfer price minus (-) the deductible land price for VAT calculation.

a) The deductible land price for VAT calculation is specifically defined as follows:

a.1) In the case where the land is allocated by the State for infrastructure development to build houses for sale, the deductible land price for VAT calculation includes the land levy payable to the state budget according to legal regulations on land levy and compensation and site clearance costs (if any).

a.2) In the case of auctioning land use rights, the deductible land price for VAT calculation is the auction winning land price.

a.3) In the case of renting land to build infrastructure, construct houses for sale, the deductible land price for VAT calculation is the land rent payable to the state budget according to legal regulations on land rent, water surface rent, and compensation, site clearance costs (if any).

Compensation and site clearance costs specified in point a.1 and point a.3 of this clause are the amounts of compensation and site clearance as per the plan approved by the competent state authority, deducted from the land levy, land rent payable according to legal regulations on land levy, land rent, water surface rent.

a.4) In the case where a business receives land use rights transferred from organizations, individuals, the deductible land price for VAT calculation is the land price at the time of receiving the land use rights transfer excluding infrastructure value. The business can declare, deduct the input VAT on infrastructure (if any). If the land price at the time of transfer cannot be determined, the deductible land price for VAT calculation is the land price set by the People's Committee of the province, centrally-run city at the time of contract signing.

In case businesses receive real estate transfers from organizations, individuals with determined land prices including infrastructure value as stipulated in point a Clause 3 Article 4 of Decree No. 209/2013/ND-CP (as amended, supplemented at Clause 3 Article 3 Decree No. 12/2015/ND-CP dated February 12, 2015), the deductible land price for VAT calculation is the land price at the time of transfer excluding infrastructure.

If the infrastructure value cannot be separated at the time of transfer, the deductible land price for VAT calculation is the land price set by the People's Committee of the province, centrally-run city at the time of contract signing.

a.5) In the case where a business receives capital contribution in the form of land use rights from organizations, individuals, the deductible land price for VAT calculation is the price recorded in the capital contribution contract. If the land use rights transfer price is lower than the contributed price, only the transfer price can be deducted.

a.6) In the case where a real estate business follows the build-transfer (BT) form, paid by land use rights value, the deductible land price for VAT calculation is the price at the time of BT contract signing as per legal regulation; if the price cannot be determined at the time of BT contract signing, the deductible land price is the price set by the People's Committee of the province, centrally-run city for infrastructure payment.

b) In case of construction, operation of infrastructure, construction of houses for sale, transfer, or lease, the VAT taxable price is the amount collected according to project implementation progress or payment schedule recorded in the contract minus (-) the deductible land price corresponding to the percentage (%) of the collected amount on the total contract value.

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Therefore, based on the above regulations, VAT declaration must be performed when the enterprise not engaged in real estate business transfers land use rights.

The taxable price is the real estate transfer price minus (-) the deductible land price for VAT calculation.

Is VAT declaration required when the enterprise not engaged in real estate business transfers land use rights in Vietnam? (Image from the Internet)

When is deadline of the VAT declaration for December 2024 in Vietnam?

Pursuant to Clause 1, Article 8 of Decree 126/2020/ND-CP, the regulation is as follows:

Types of Tax Declaration on a Monthly, Quarterly, Annual Basis, or per Tax Obligation Occurrence and Tax Finalization Declaration

1. The types of taxes and other revenues under the state budget managed by tax authorities that are subject to monthly declarations include:

a) Value-added tax, personal income tax. In cases where the taxpayer meets the criteria as specified in Article 9 of this Decree, they may opt for quarterly declaration.

b) Special consumption tax.

c) Environmental protection tax.

d) Resource tax, except for resource tax specified at point e of this clause.

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Additionally, Article 44 of the Law on Tax Administration 2019 stipulates the deadline for tax return submission as follows:

- The deadline for submitting tax returns for taxes declared monthly, quarterly is as follows:

+ No later than the 20th day of the following month after the tax obligation arises in the case of monthly declarations and submissions;

+ No later than the last day of the first month of the following quarter in the case of quarterly declarations and submissions.

- The deadline for submitting annual tax return documents is as follows:

+ No later than the last day of the third month from the end of the calendar year or fiscal year for annual tax finalization documents; no later than the last day of the first month of the calendar year or fiscal year for annual tax return documents;

+ No later than the last day of the fourth month from the end of the calendar year for personal income tax finalization documents directly filed by individuals;

+ No later than December 15 of the preceding year for the annual lump-sum tax declaration of households, business individuals, with the lump-sum tax method; in cases where the household, individual starts new business activities, the deadline for submitting the lump-sum tax declaration is no later than 10 days from the start of business.

- The deadline for submitting tax return documents for taxes declared and submitted per occurrence of tax obligation is no later than the 10th day from the occurrence of the tax obligation.

- The deadline for submitting tax return documents in the case of activity termination, contract termination, or business reorganization is no later than the 45th day from the occurrence of the event.

- In the case where taxpayers declare taxes electronically on the last day of the tax return submission deadline and the tax authority’s electronic information portal encounters a technical issue, the taxpayer submits the tax return documents, proof of electronic tax payment on the subsequent day after the tax authority’s electronic information portal resumes operation.

Therefore, it can be concluded that the deadline for submitting the value-added tax return for the tax period of December 2024 is January 20, 2025.

What is the penalty for submitting a tax return 50 days late in Vietnam?

Pursuant to the provisions of Article 13 of Decree 125/2020/ND-CP, penalties for late submission of a tax return are as follows:

(1) A warning is issued for submitting tax return documents 01 to 05 days late with mitigating circumstances.

(2) A fine ranging from 2,000,000 VND to 5,000,000 VND is imposed for submitting tax return documents 01 to 30 days late, excluding cases specified in Clause 1, Article 13 of Decree 125/2020/ND-CP.

(3) A fine ranging from 5,000,000 VND to 8,000,000 VND is imposed for submitting tax return documents 31 to 60 days late according to regulations.

(4) A fine ranging from 8,000,000 VND to 15,000,000 VND is imposed for one of the following acts:

- Submitting tax return documents 61 to 90 days late according to regulations;

- Submitting tax return documents over 90 days late but no tax is due;

- Not submitting tax return documents but no tax is due;

- Not submitting required appendices as per tax management regulations for enterprises engaged in related-party transactions along with corporate income tax finalization documents.

(5) A fine ranging from 15,000,000 VND to 25,000,000 VND is imposed for submitting tax return documents over 90 days late from the deadline for submitting tax return documents, with tax due, and the taxpayer has fully paid the tax amount, late payment interest to the state budget before the tax authority announces the decision on tax inspection, tax audit or before the tax authority compiles the minutes on the act of late submitting of tax return documents as prescribed in Clause 11, Article 143 of the Law on Tax Administration 2019.

Note: The fines listed above are imposed on organizations. The fines for individuals are 1/2 of those for organizations. For taxpayers being households, business households the penalties are applied as for individuals.

Additionally, according to the provisions at Clause 6, Article 13 of Decree 125/2020/ND-CP, the remedies for late submission of tax returns are as follows:

- Compulsory submission of the late payment tax amount to the state budget applies to the violating acts specified in Clauses 1, 2, 3, 4, and 5 of Article 13 Decree 125/2020/ND-CP if the taxpayer's late submitting of tax returns results in late tax payment;

- Compulsory submission of tax return documents and appendices with the tax return for the acts specified at Point c, d Clause 4 of Article 13 Decree 125/2020/ND-CP.

Therefore, the penalty for submitting a tax return 50 days late ranges from 5,000,000 VND to 8,000,000 VND.