Available in Vietnam: Circular 13/2023/TT-BTC on amendments to regulations on value-added tax

On February 28, 2023, the Minister of Finance of Vietnam issued Circular 13/2023/TT-BTC guiding Decree 49/2022/ND-CP amending Decree 209/2013/ND-CP guiding the Law on VAT amended according to Decree 12/2015/ND-CP, 100/2016/ND-CP and 146/2017/ND-CP and amending Circular 80/2021/TT-BTC.

Available in Vietnam: Circular 13/2023/TT-BTC on amendments to regulations on value-added tax (Internet image)

According to Circular 13/2023/TT-BTC, amending a number of regulations on value-added tax, specifically:

1. Amendments to regulations on value-added tax in Vietnam

Article 1 of Circular 13/2023/TT-BTC stipulating the amendment to regulations on value-added tax in some cases as follows:

- Regarding real estate transfer, the taxable price shall be determined in accordance with regulations in Clause 1 Article 1 of Decree 49/2022/ND-CP.

-  Taxable prices for electricity generation by the Vietnam Electricity (EVN) shall comply with regulations in Clause 1 Article 1 of Government’s Decree 49/2022/ND-CP.

- Business establishments eligible for VAT refund regarding investment projects shall comply with regulations in Clause 3 Article 1 of Decree 49/2022/ND-CP.

2. Value-added taxable price of real estate transfer activities in Vietnam 

Clause 1, Article 1 of Circular 13/2023/TT-BTC stipulating that regarding real estate transfer, the taxable price shall be determined in accordance with regulations in Clause 1 Article 1 of Decree 49/2022/ND-CP.

Thus, for real estate transfers, the value-added tax calculation price is the real estate transfer price minus the land price deducted for value-added tax calculation.

The land price deducted for value-added tax calculation in Vietnam is specified as follows:

- In the case of receiving land assigned by the State to invest in the infrastructure and construct houses for selling, the land price that is deducted for value-added tax calculation, including the land use fees subject to transfer to the state budget according to regulations of laws on the collection of the land use fee, compensation, and site clearance amount (if any).

- In the case of auctions for land use rights, the land price deducted for value-added tax calculation is the auction-winning land price.

- In the case of renting land for the construction of infrastructure and houses for selling, the land price deducted for value-added tax calculation is the rental subject to transfer to the state budget according to laws on the collection of the land rental, water surface rental, compensation, and site clearance amount (if any)

The compensation and site clearance amount prescribed in Point a.1 and Pont a.3 of this Clause is the compensation and site clearance amount according to the plan approved by the competent state agency and deducted in the land use price or land rental subject to payment according to regulations on the collection of the land use price, land rental, and water surface rental.

- In case business establishments receive the transferred land use rights from organizations and individuals, the land price deducted for value-added tax calculation is the land price at the time of receiving such transferred land use rights, excluding the infrastructure value. Business establishments may declare and deduct the input value-added tax of infrastructure (if any).

In case of inability to determine the land price at the time of receiving the transfer, the land deducted for value-added tax calculation is the land price imposed by the People's Committee of the province or centrally affiliated city at the time of concluding the transfer contract.

In case business establishments that receive the transferred real estate of organizations and individuals have determined the land price including the infrastructure value according to regulations prescribed in Clause 3 Article 4 of Decree 209/2013/ND-CP (amended by Clause 3 Article 3 of Decree 12/2015/ND-CP dated February 12, 2015), the land price deducted for value-added tax calculation is the land price at the time of receiving the transfer, excluding the infrastructure.

In case of inability to separate the infrastructure value at the time of receiving the transfer, the land price deducted for value-added tax calculation is the land price imposed by the People's Committee of the province or centrally affiliated city at the time of concluding the transfer contract.

- In case business establishments receive land use rights from organizations and individuals as capital, the land price deducted for value-added tax calculation is the price prescribed in the capital contribution contract.

In case the transfer price of land use right is lower than the capital contribution price, the land price deducted shall follow the transfer price.

- In case real estate business establishments implement according to the form of building-transfer (BT) and pay by the value of land use right, the land price deducted for value-added tax calculation is the price at the time of concluding the BT contract according to the law;

If the price is undetermined at the time of concluding the BT contract, the deductible land price is the land price imposed by the People’s Committee of the province or centrally affiliated city for payment of works.

Circular 13/2023/TT-BTC takes effect from April 14, 2023.

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