6 cases where land price is deducted to calculate VAT
Government Decree 49/2022/ND-CP dated July 29, 2022 makes amendments based on Decree 209/2013/ND-CP, guiding the VAT Law and officially takes effect from September 12. In the article below, Smart Solutions For Business Company Limited (S4B Vietnam) will update 6 cases where land prices are deducted to calculate value added tax from September 12 according to Decree 49/2022/ND-CP.
Case 1. The State allocates land to invest in infrastructure and build houses for sale
When the State allocates land to invest in infrastructure to build houses for sale, the land price is deducted to calculate value-added tax, including land use fees payable to the state budget according to the law on pre-historic collection, land use and compensation and site clearance (if any).
Case 2. Auction of land use rights
In the case of auctioning land use rights, readers need to clearly understand that the land price deducted to calculate value added tax is the winning land price at the auction, according to Decree 49/2022/ND-CP.
Can I ask about the cases where land prices are deducted to calculate value added tax in 2024?
Case 3. Renting land to build infrastructure and houses for sale
In case of renting land to build infrastructure or build houses for sale, the land price deducted to calculate value added tax includes: land rent payable to the state budget according to the law on rent collection, land, water surface rental and compensation and site clearance (if any).
For compensation and site clearance specified in Points a.1 and a.3 in Article 1, amending and supplementing clauses 3 and 4 is the compensation and site clearance amount according to the approved plan. Competent state agencies approve and are deducted from land use fees and land rents payable according to legal regulations on land use fees, land rents, and water surface rents.
Case 4. Business establishments transfer land use rights of individuals and organizations
For business establishments that receive land use rights from individuals or organizations, the land price deducted to calculate value added tax will be the land price at the time of land use rights transfer, excluding value. the infrastructure. Business establishments can declare and deduct input value-added tax on infrastructure (if any). When the land price cannot be determined at the time of transfer, the land price to be deducted to calculate value added tax is the land price set by the People’s Committee of the province or centrally run city at the time of signing the transfer contract.
From today, in what cases will land prices be deducted to calculate VAT?
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For business establishments that receive real estate transfers from organizations and individuals, the land price including the value of infrastructure has been determined as prescribed in Point a, Clause 3, Article 4 of Decree No. 209/2013/ND -CP (amended and supplemented in Clause 3, Article 3 of Decree No. 12/2015/ND-CP dated February 12, 2015), the land price deducted to calculate value added tax is the land price at the time accepts transfer and does not include infrastructure.
In case the value of infrastructure cannot be separated at the time of transfer, the land price deducted to calculate value added tax is the land price prescribed by the People’s Committee of the province or centrally run city at the time of transfer.
Case 5. Business establishments receive capital contributions in the form of land use rights from individuals and organizations
In cases where a business establishment receives capital contribution using land use rights from individuals or organizations, the land price deducted to calculate value-added tax is the cost stated in the capital contribution contract. In case the transfer price of land use rights is lower than the price of land contributed as capital, the land price can only be deducted according to the transfer price.
Case 6. Real estate business establishments implement the build-transfer-payment method
In the final case, a real estate business establishment operates in the form of build-transfer (BT) and pays with the value of land use rights, then the land price deducted to calculate value-added tax is the price at the time of payment. BT contract signing point according to the provisions of law. If at the time of signing the BT contract the price has not been determined, the land price to be deducted is the land price decided by the People’s Committee of the province or centrally run city to pay for the project.
Construction and business of infrastructure, construction of houses for sale, transfer or lease, the value-added tax calculation price is the amount collected according to the project implementation progress or the payment collection schedule stated in the contract minus (-) the land price is deducted corresponding to the percentage of money collected on the total contract value.
Above are 6 cases where land prices are deducted to calculate value added tax from September 12 according to Decree 49/2022/ND-CP. Hopefully Smart Solutions For Business Company Limited (S4B Vietnam) brings useful information to readers. If you have any questions or need advice or answers related to VAT and taxes, please contact us.
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