Circular No. 13/2023/TT-BTC: Determining VAT Taxable Price for Real Estate Transfer Activities
Latest Regulations on Determining VAT Calculation Prices for Real Estate Transfer Activities According to Circular 13/2023/TT-BTC?
According to the provisions of Clause 1, Article 1 Circular 13/2023/TT-BTC as follows:
Amend, supplement a number of articles of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance (amended and supplemented by Circular No. 26/2015/TT-BTC dated February 27, 2015, Circular No. 130/2016/TT-BTC dated August 12, 2016, of the Ministry of Finance) as follows:
1. Amend, supplement Clause 10, Article 7 as follows:
“10. For real estate transfer activities, the value-added tax calculation price is implemented according to the provisions in Clause 1, Article 1, Decree No. 49/2022/ND-CP dated July 29, 2022, of the Government of Vietnam.”
The value-added tax calculation price is determined in Clause 1, Article 1 Decree 49/2022/ND-CP as follows:
- For real estate transfer activities, the VAT calculation price is the real estate transfer price minus (-) the deductible land price for VAT calculation. Specifically, the deductible land price for VAT calculation is regulated as follows:
(1) In cases where the State allocates land for infrastructure investment to construct houses for sale, the deductible land price for VAT calculation includes the land levy payable to the state budget (excluding exempted, reduced land levy) and compensation, clearance costs prescribed by law.
(2) In cases of auctioning land use rights of the State, the deductible land price for VAT calculation is the auction-winning land price.
(3) In cases of leasing land for infrastructure investment for lease or house construction for sale, the deductible land price for VAT calculation includes land rent payable to the state budget (excluding exempted, reduced land rent) and compensation, clearance costs according to legal regulations. For leasing land to construct houses for sale, from July 1, 2014, the implementation follows the Land Law 2013.
(4) In cases where businesses receive land use rights transfers from organizations or individuals, the deductible land price for VAT calculation is the land price at the time of receiving the land use rights, including the infrastructure value (if any); businesses cannot declare, deduct input VAT for infrastructure included in the land use rights value which is not subject to VAT.
If the deductible land price excludes infrastructure value, businesses can declare, deduct input VAT for infrastructure not included in the deductible land use rights value and not subject to VAT.
In cases where the land price at the time of receiving the transfer cannot be determined, the deductible land price for VAT calculation is the land price regulated by the People's Committee of the province or central-affiliated city at the time of signing the transfer contract.
(5) In cases where real estate businesses implement the build-transfer (BT) form and are paid with land use rights value, the deductible land price for VAT calculation is the price at the time of signing the BT contract according to legal regulations; if not determined at the BT contract signing time, the deductible land price for VAT calculation is the price for paying the project decided by the provincial People's Committee according to legal regulations.
(6) In cases where businesses accept land use right contributions 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 price at the time of capital contribution, only the transfer price is deductible.
*Circular 13/2023/TT-BTC: Determining VAT calculation prices for real estate transfer activities?*
Where to Submit Tax Declaration Dossiers for Real Estate Transfer Activities?
According to the provisions in Point b, Clause 1, Article 11 Decree 126/2020/ND-CP as follows:
Place for Submitting Tax Declaration Dossiers
Taxpayers shall implement regulations on the place for submitting tax declaration dossiers according to Clause 1, Clause 2, and Clause 3, Article 45 of the Law on Tax Administration and the following provisions:
1. For taxpayers with multiple activities, businesses in multiple provincial localities as prescribed in Points a and b, Clause 4, Article 45 of the Law on Tax Administration, the place for submitting tax declaration dossiers is the tax agency where business activities occur, different from the main office location, as follows:
a) Declare VAT for investment projects in cases specified in Point d, Clause 2, Article 7 of this Decree, at the location of the investment project.
b) Declare VAT for real estate transfer activities of infrastructure investment projects, houses for transfer (including cases of collecting advance money from customers following the progress) at the location of real estate transfer activities.
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For real estate transfer activities of infrastructure investment projects, houses for transfer (including cases of collecting advance money from customers following the progress) at the location of real estate transfer activities, taxpayers submit tax declaration dossiers to the tax agency where business activities occur in a different province or city from the headquarters.
For real estate transfers not specified above, tax declaration and submitting tax declaration dossiers to the directly managing tax agency are required and allocate the payable tax amount to each province with business activities as specified in Clause 1, Article 12 Circular 80/2021/TT-BTC.
What are the Conditions for Transferring Real Estate Projects?
Based on Clause 1, Article 49 of the Law on Real Estate Business 2014 regulating the conditions for transferring a part or the entire real estate project as follows:
- The project has been approved by a competent state agency, has a detailed 1/500 plan or approved general plan.
- The transferred project, part of the project has completed compensation and clearance. For transferring the entire infrastructure construction investment project, technical infrastructure works must be completed as per the approved project's progress.
- The project does not have disputes over land use rights, is not being enforced for administrative decisions by competent state agencies.
- There is no decision to revoke the project, revoke the land by competent state agencies; if there are violations during the project implementation, the investor must comply with the sanction decisions.
Circular 13/2023/TT-BTC will take effect from April 14, 2023.
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