When shall the sale of off-plan social housing be implemented in Vietnam?
When shall the sale of off-plan social housing be implemented in Vietnam?
Based on the provisions of point a, clause 1, Article 89 of the Housing Law 2023, off-plan social housing can only be sold when the following conditions are met:
- There must be a social housing construction investment project file, technical housing design approved, and a construction permit if a construction permit is required;
- The construction of the building's foundation must have been completed in accordance with construction laws and infrastructure for traffic, water supply, drainage, residential electricity, and public lighting within the area being sold must be completed according to the detailed construction planning, design documents, and project schedule that have been approved;
- The mortgage of social housing by the investor must be discharged unless the buyer, lease purchaser, and mortgage holder agree not to discharge it;
- A written notification from the provincial housing management agency confirming the eligibility of the housing for sale or lease purchase is required, except for social housing built with public investment funds.
What is the VAT rate for off-plan social housing in Vietnam? (Image from Internet)
What is the VAT rate for off-plan social housing in Vietnam?
According to clause 2, Article 8 of the Value Added Tax Law 2008 (amended by clause 3 of Article 1 in the Amendment Law on Value Added Tax 2013 and amended by clauses 2 and 3, Article 3 of the Amendment Law on Various Tax Laws 2014), a VAT rate of 5% applies to goods and services as follows:
Tax Rate
...
2. A VAT rate of 5% applies to the following goods and services:
...
l) Medical equipment, instruments, cotton, and medical sanitary pads; preventive and therapeutic drugs; pharmaceutical products, medicinal materials as raw materials for the production of preventive and therapeutic drugs;
m) Teaching and learning tools, including models, pictures, boards, chalk, rulers, compasses, and specialized equipment and instruments for teaching, scientific research, and experiments;
n) Cultural, exhibition, sports activities; performing arts, film production; importation, distribution, and film screening;
o) Children's toys; all kinds of books, except for those prescribed in clause 15 of Article 5 of this Law;
p) Scientific and technology services according to the Law on Science and Technology.
q) Sale, lease, and lease-purchase of social housing as stipulated in the Housing Law.
3. A VAT rate of 10% applies to goods and services not specified in clauses 1 and 2 of this Article.
Thus, the sale of off-plan social housing is subject to a 5% VAT rate.
When is the VAT for activities related to the sale of off-plan social housing calculated in Vietnam?
The time for calculating VAT is stipulated in Article 8 of Circular 219/2013/TT-BTC as follows:
Timing for Determining VAT
1. For the sale of goods, it is the time of transfer of ownership or use rights of the goods to the buyer, regardless of whether the payment has been received.
2. For service provision, it is the time of completion of service provision or the time of service provision invoice issuance, regardless of whether payment has been received.
For telecommunication services, it is the time of final data reconciliation for telecom connection charges according to economic contracts between telecom service facilities, but no later than 2 months from the month the telecom connection charges are incurred.
3. For electricity supply, water supply, the time is when the consumption index on the meter is recorded for billing.
4. For real estate business activities, infrastructure construction, or house construction for sale, transfer, or lease, it is the time of payment according to the project implementation progress or as stated in the contract. The business entity must declare the output VAT generated in the period based on the collected amount.
5. For construction and installation, including shipbuilding, it is the time of acceptance, handover of the projects, project components, construction volumes, and installation completion, regardless of whether the payment has been received.
6. For imported goods, it is the time of customs declaration registration.
Thus, the time for calculating VAT for activities related to the sale of off-plan social housing is the time of payment according to the project implementation progress or the payment progress stated in the contract.
The business entity must declare the output VAT generated in the period based on the collected amount.
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