DECREE

AMENDMENTS TO DECREE NO. 209/2013/ND-CP DATED DECEMBER 18, 2013 OF THE GOVERNMENT OF VIETNAM ELABORATING AND GUIDING THE IMPLEMENTATION OF CERTAIN ARTICLES OF THE LAW ON VALUE-ADDED TAX AMENDED BY DECREE NO. 12/2015/ND-CP, DECREE NO. 100/2016/ND-CP, AND DECREE NO. 146/2017/ND-CP

Pursuant to the Law on Organization of the Government of Vietnam dated June 19, 2015; the Law on Amendments to the Law on Organization of the Government of Vietnam and the Law on Organization of the Local Government of Vietnam dated November 22, 2019;

Pursuant to the Law on Value-Added Tax dated June 3, 2008; the Law on Amendments to the Law on Value-Added Tax dated June 19, 2013;

Pursuant to the Law on Amendments to laws on taxation dated November 26, 2014;

Pursuant to the Law on Amendments to the Law on Value-Added Tax, Law on Excise Tax, and Law on Tax Administration dated April 6, 2016;

At the request of the Minister of Finance of Vietnam;

The Government of Vietnam hereby promulgates the Decree on Amendments to Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government of Vietnam elaborating and guiding the implementation of certain Articles of the Law on Value-Added Tax amended by Decree No. 12/2015/ND-CP, Decree No. 100/2016/ND-CP, and Decree No. 146/2017/ND-CP.

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1. Amendments to Clause 3 and Clause 4 of Article 4:

“3. Regarding real estate transfer, the value-added taxable price is the real-estate transfer price minus (-) the land price deducted for value-added tax calculation.

a) The land price deducted for value-added tax calculation is specified as follows:

a.1) 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).

a.2) In the case of auctions for land use rights, the land price deducted for value-added tax calculation is the auction-winning land price.

a.3) 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.

a.4) 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 No. 209/2013/ND-CP (amended by Clause 3 Article 3 of Decree No. 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.

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a.5) 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.

a.6) 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.

b) In the case of constructing or trading infrastructure and constructing houses for sale, transfer, or lease, the value-added taxable price is the sum collected according to the project execution or the collection schedule prescribed in the contract minus (-) the land price deducted corresponding to the % of the sum collected over the total value of the contract.

4. Taxable prices for electricity production of the Vietnam Electricity:

a) Regarding electricity of hydroelectric companies that are keep-business-account units dependent on the Vietnam Electricity or Power Generation Corporations, the value-added taxable price for determining the value-added tax amount to be paid in the locality where the hydropower plant is located is 35% of the average retail price of electricity, excluding value-added tax, according to regulations of laws on hydroelectricity and laws on price.

b) Regarding electricity of thermoelectric companies that are keep-business-account units dependent on the Vietnam Electricity or Power Generation Corporations, the value-added taxable price for determining the value-added tax amount to be paid in the locality where the thermal power station is located is the selling price of electricity to customers stated on invoices according to contracts of purchase and sale of electricity applicable to each thermal power station.

If there are no contracts of purchase and sale of electricity applicable to each thermal power station, the value-added taxable price is the average retail price of electricity, excluding value-added tax, according to regulations of laws on electricity, and laws on price.

c) Regarding electricity of electricity production companies (excluding hydroelectricity and thermoelectricity) that are keep-business-account units dependent on the Vietnam Electricity or Power Generation Corporations, the value-added taxable price for determining the value-added tax amount to be paid in the locality where the electricity production plant is located is the selling price of electricity, excluding value-added tax, imposed by competent state agencies on each type of power generation.

If the selling price of electricity is yet to be imposed by competent state agencies on each type of power generation prescribed in this Point, the value-added taxable price is the average retail price of electricity, excluding value-added tax, according to regulations of laws on electricity and laws on price."

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“3. Business activities and business households that fail to implement or insufficiently implement regulations on accounting, invoices, and receipts according to regulations of the law shall pay value-added tax according to regulations on flat tax prescribed in Article 51 of the Law on Tax Administration."

3. Amendments to Clause 2 Article 10:

“2. Business establishments eligible for tax refund regarding investment projects:

a) Business establishments that have registered for business and value-added tax payment according to the tax credit method (including newly established business establishments from investment projects), have new investment projects (including investment projects divided into several investment phases or investment categories) according to regulations of the Law on Investment in areas of the same or different provinces and cities where their headquarters are located (except for cases prescribed in Point c of this Clause, investment projects on construction of houses for sale, and investment projects that do not create fixed assets) that are in the investment phase or projects on prospection and projects to search, prospect, and develop oil and gas fields that are in the investment phase, and have the input value-added tax of goods and services incurred during the cumulative investment phase that have not been fully deducted from at least 300 million VND, shall be eligible for the value-added tax refund.

Business establishments that declare separate value-added tax for investment projects and have to compensate for the input value-added tax of investment projects with the value-added tax subject to payment of current business production activities (if any). After the compensation, if the cumulative input value-added tax of investment projects has not been deducted for at least 300 million VND, such business establishments shall be eligible for the value-added tax refund.

In case investment projects of business establishments have been inspected and audited by competent state agencies, tax agencies may use the results of such inspection or audit to decide on the value-added tax refund.

b) Business establishments of conditional business lines shall be eligible for the value-added tax refund for investment projects as prescribed in Point a of this Clause if their investment projects fall into the following cases:

b.1) Investment projects in the investment stage and have been granted licenses to engage in conditional business lines by competent state agencies according to regulations of laws on investment and specialized laws under one of the following forms: Licenses, certificates, or documents on verification and approval.

b.2) Investment projects in the investment stage that are yet to be required to apply for licenses to engage in conditional business lines issued by competent state agencies according to regulations of laws on investment and specialized laws under one of the following forms: Licenses, certificates, or documents on verification and approval.

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c) Business establishments that are ineligible for the value-added tax refund may be permitted to transfer the tax that has yet to be deducted from investment projects according to laws on investment to the next period in the following cases:

c.1) Investment projects that do not satisfy the business criteria according to the Law on Investment, regulations prescribed in Point a Clause 1 Article 13 of the Law on Value-Added Tax amended by the Law on Amendments to the Law on Value-Added Tax, the Law on Excise Tax, and the Law on Tax Administration of business establishments of conditional business lines that have not been granted licenses to engage in conditional business lines by competent state agencies by one of the following forms: Licenses, certificates, or documents on verification and approval or such business establishments have yet to satisfy the criteria for engaging in conditional business lines without the requirements for written verification or approval according to laws on investment (except for cases prescribed in Point b of this Clause).

Investment projects that do not satisfy the business criteria during their operation according to regulations prescribed in Point a Clause 1 Article 13 of the Law on Value-Added Tax amended by the Law on Amendments to the Law on Value-Added Tax, the Law on Excise Tax, and the Law on Tax Administration of business establishments of conditional business lines that have one of their licenses to engage in conditional business lines revoked during operation such as licenses, certificates, or documents on verification and approval; or during their operation, if such business establishments fail to satisfy the criteria for investment in conditional business lines according to laws on investment, the time of non-refundable value-added tax shall be from the time such business establishments have one of the mentioned documents revoked or the time when competent state agencies inspect and detect such business establishments fail to satisfy the criteria for investment in conditional business lines.

c.2) Investment projects on the utilization of natural resources and minerals licensed from July 1, 2016 or investment projects on the production of goods and products with the total value of natural resources and minerals plus energy costs account for 51% of the finished product price according to the investment project, except for projects to search and prospect oil and gas fields as prescribed in Point a of this Clause.

The identification of natural resources, minerals, and their values and the time of determination of the prices of natural resources, minerals, and energy costs shall comply with Clause 11 Article 3 of this Decree."

Article 2. Entry into force and implementation responsibilities

1. This Decree comes into force as of September 12, 2022.

2. Regulations on the value-added tax refund for investment projects of business establishments of conditional business lines prescribed in Clause 3 Article 1 of this Decree shall be applicable from the effective date of Decree No. 100/2016/ND-CP dated July 1, 2016 of the Government of Vietnam.

In case business establishments have their value-added tax of investment projects revoked according to Point c Clause 2 Article 10 of Decree No. 209/2013/ND-CP (amended by Clause 6 Article 1 of Decree No. 100/2016/ND-CP), tax agencies shall adjust the value-added tax, deferral amount, and fines for administrative violations of tax (if any). The offsetting and refund of overpayment shall comply with regulations of laws on tax administration.

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4. The Minister of Finance shall guide the implementation of this Decree.

5. Ministers, Directors of ministerial agencies, Directors of Government’s affiliates, Chairmen of the People’s Committees of provinces, centrally affiliated cities, and relevant organizations, individuals shall implement this Decree.

ON BEHALF OF THE GOVERNMENT
PP. PRIME MINISTER
DEPUTY PRIME MINISTER




Le Minh Khai