Amending regulations on VAT calculation prices when transferring real estate

Decree 49/2022/ND-CP was issued by the Government on July 29, 2022, amending and supplementing a number of articles of Decree 209/2013/ND-CP guiding the implementation of the Law on Value Added Tax.

🔰 Decree 49/2022/ND-CP amending and supplementing Clause 3, Article 4 of Decree 209/2013/ND-CP on value-added tax (VAT) prices for real estate transfer.

🔰 Accordingly, the VAT calculation price is the real estate transfer price minus (-) the deductible land price for VAT calculation.

🔰 The land price to be deducted for VAT calculation is specified as follows:

✔ In case the State is allocated land for investment in infrastructure to build houses for sale, the land price deductible for VAT calculation includes land use fees to the state budget and compensation and ground clearance. (if).

✔ In the case of an auction of land use rights, the land price deducted for VAT calculation is the auction-winning land price.

✔ In the case of land tax for using infrastructure, or building houses for sale, the land price deductible for VAT calculation is the land rent payable to the State budget for collection of land rent, water surface rent, compensation, and clearance (if any).

🔰 The compensation and ground clearance, if the above is the amount of compensation and ground clearance according to the plan approved by the competent state agency, shall be deducted from the land use fees or land rent.

✔ In case a business establishment receives a land use right transfer from an organization or individual, the land price deductible for VAT calculation is the land price at the time of receiving the land use right transfer, infrastructure value is not included.

🔰 Business establishments may declare and deduct input VAT on infrastructure (if any). (Previously, business establishments were not allowed to declare and deduct input VAT of the infrastructure included in the value of the deductible land use rights, not subject to VAT).

🔰 If the land price cannot be determined at the time of transfer, the land price deductible for VAT calculation is the land price set by the People's Committee of the province or city at the time of signing the transfer contract.

🔰 In case the value of infrastructure cannot be separated at the time of transfer, the land price deductible for VAT calculation is the land price set by the People's Committee of the province or centrally-affiliated cities specified at the time of signing the transfer contract.

✔  In case a business establishment receives a capital contribution with land use rights, the land price to be deducted for VAT calculation is the price stated in the capital contribution contract.

🔰  If the transfer price is lower than the price of the land received as a capital contribution, only the land price will be deducted according to the transfer price...

🔰  This Decree takes effect from September 12, 2022.

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