Chapter V
INCOME FROM REAL ESTATE TRANSFER
Article 16. Taxable objects
1. Enterprises subject to tax on income from real estate transfer include: enterprises from all economic sectors and business lines earning income from real estate transfer, real estate companies earning income from land lease.
2. Income from real estate transfer includes: income from the transfer of the right to use or to rent land (including the transfer of the project attached to the transfer of the right to use, rent land as prescribed by law); income from the lease of land granted by real estate companies as prescribed by law provisions on land, regardless of the existence of the infrastructures or constructions attached to the land; income from the transfer of houses and constructions attached to the land, including the property attached to such houses or constructions if the value of the property is not separated when transferring, whether or not the right to use or to rent land is transferred; the income from the transfer of property attached to land, income from the transfer of the house tenancy or ownership.
Income from the lease of land granted by real estate companies, except for the case such enterprises only lease out the houses, infrastructures, or constructions on the land.
Article 17. Basis for tax calculation
Basis for calculating the tax on income from real estate transfer is the chargeable income and the tax rate
The chargeable income equals (=) the taxable income minus (-) the loss during the real estate transfer in the previous years (if any).
1. Taxable income.
The taxable income from real estate transfer is calculated by the revenue from the real estate transfer minus the cost price of the real estate and the deductible expenses on the real estate transfer.
a) Revenue from real estate transfer.
a.1. The revenue from real estate transfer is calculated based on the actual prices of real estate transfer under the real estate sale or transfer contract in accordance with law (including the surcharges, if any).
If the price of transferring the right to use land under the real estate sale or transfer contract is lower than the land price set by People’s Committees of central-affiliated cities and provinces (hereinafter referred to as provincial People’s Committees) at the contract-signing time, the land price set by provincial People’s Committees at the contract-signing time shall apply.
- The time for calculating the tax-calculation revenue is the time when the seller hands over the real estate to the buyer, whether or not the buyer has registered their property ownership, land tenancy at competent State agencies.
- For enterprises being allocated land by, or renting land from, the State to execute projects of investment in infrastructure or houses to transfer or to lease out, that receive deposits from their customers in all forms, the time for calculating the revenue for calculating tentative enterprise income tax is the time of collecting money from their customers. In particular:
+ If the enterprise takes deposits from their customers and can calculate the cost corresponding to the recorded revenue (including the predictive value of the unfinished construction item estimate proportional to the recorded income), the enterprise shall declare and pay tentative enterprise income tax according to the income without cost.
+ If the enterprise takes deposits from their customers and can calculate the cost corresponding to the revenue, the enterprise shall declare and pay enterprise income tax at 1% on the income collected, and such income must not be included in the income for calculating enterprise income tax in the year.
+ The enterprise shall recalculate the enterprise income tax amount payable when handing over the real estate. If the paid tentative enterprise income tax is lower than the enterprise income tax amount payable, the enterprise must pay the tax arrears to the State budget. If the paid tentative enterprise income tax is higher than the enterprise income tax amount payable, the enterprise may deduct the excessive tax amount from the enterprise income tax amount payable of the succeeding period, or get back the excessive tax amount.
a.2. The revenue for calculating taxable income in the following cases is calculated as follows:
- The taxable income of an enterprise that leases out land is the rent paid by the lessee by installments according to the lease contract. If the lessee pays in advance for many years, the revenue for calculating taxable income shall be distributed to the number of years being paid in advance, or calculated according to the revenue from lump-sum payment. The selection of revenue from lump-sum payment is only determined after the enterprise has fulfilled every financial responsibility with the State, ensuring the duties with the lessee until the land lease period expires.
If an enterprise enjoying enterprise income tax incentives selects the method for determining revenue for calculating taxable income being the total rent paid in advance for many years by the lessee, the enterprise income tax amount eligible for tax exemption or tax reduction shall be determined based on the total enterprise income tax amount of the years being paid in advance divided by (:) the number of years being paid in advance by the lessee.
If before 2012, an enterprise leases out land (paid in advance for many years) and has determined the revenue for tax calculation by distributed to the number of years being paid in advance, and the land lease period is still unexpired in 2012, such enterprise may determine the revenue for tax calculation distributed annually or the revenue from lump-sum payment for the remaining years in the land lease period.
- When a credit institutions receives the tenancy value put up as collateral for assuring the duty fulfillment, if the land tenancy put up as collateral is transferred, the revenue for calculating taxable income is the transfer price of the land tenancy agreed by the parties.
- When the land tenancy being property distrained for judgment enforcement is transferred, the revenue for calculating taxable income is the transfer price of the land tenancy agreed by the litigants, or determined by the Valuation council.
The revenue determination in the cases in Point a.2 must comply with the principles specified in Point a.1.
b) Expenses on real estate transfer
b.1. Principles of expense calculation:
- The expenses deducted for calculating the taxable income from real estate transfer in a tax period must be proportional to the revenue for calculating taxable income.
- If an investment project is completed and transferred in stages, the general expenses on the entire project, the expense of each completed stage distributed by the area (m2) of land transferred to calculate the taxable income from the land transferred, including: the expenses on internal traffic; tree area, investment in water supply and drainage; transformer station; compensation for property on land; compensation, support, and resettlement, expenses on the organization of land clearance and compensation approved by competent authorities not being deducted from the land levy and land rent according to the policy on the collection of land levy and land rent payable to the State budget, and other investment in land related to the transfer of the right to use or to rent land.
The distribution of the expenses above is calculated as follows:
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The expense distributed to the land transferred
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=
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The total cost of infrastructure
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x
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The amount of land transferred
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The total amount of land allocated to the project (excluding the public land area as prescribed by law provisions on land)
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If part of the project area not being transferred is used for other business activities, the general expenses above are also distributed to such area for monitoring, accounting, declaring and paying enterprise income tax on other business activities.
In case an enterprise invests in infrastructural construction for many years and only calculate the value of the infrastructure after all the constructions is done, when calculating the expenses on real estate transfer regarding the land area transferred, the enterprise may temporarily distribute the expenses on investment in infrastructure arising proportionally to the land area transferred using the formula above, and extract the expenses on infrastructure corresponding to the recorded revenue when calculating taxable income. After completing the construction investment, the enterprise shall calculate and adjust the expenses on infrastructure temporarily distributed and extracted for the area transferred consistently with the total value of infrastructure. If the paid tax is higher than the income tax on real estate transfer payable, the enterprise may deduct the excessive tax amount from the tax amount payable of the succeeding period, or get back the excessive tax amount; if the tax is not completely paid, the enterprise must pay the tax arrears as prescribed.
b.2. The deductible expenses on real estate transfer include:
- The cost price of the land transferred conformable to the land tenancy origin. In particular:
+ For the land allocated by the State subject to land levy and land rent, the cost price is the land levy or land rent paid to the State budget;
+ For the land tenancy transferred from other organizations and individuals, the cost price is based on the contract and valid payment receipts when receiving the right to use or to rent land; If the contract or valid payment receipts are not available, the cost price shall be calculated based on the price set by provincial People’s Committees at the time of receiving real estate transfer.
+ For land from capital contribution, the cost price is the value of the right to use or to rent land according to the property valuation record when contributing;
+ When an enterprise swaps the construction for the State-owned land, the cost price is calculated based on the value of the construction swapped, except otherwise prescribed by competent State agencies.
+ The cost price is the auction winning price if the right to use or to rent land is put up for auction;
+ When the land of an enterprise is inherited under civil laws, or given, donated, of which the cost price is not able to be calculated, is shall be determined based on the prices of the kinds of land set by provincial People’s Committees based on the Price bracket table of kinds of land made by the Government at the time of inheriting, giving, or donating.
+ When the land of an enterprise is inherited, given, or donated before 1994, the cost price shall be determined based on the prices of the kinds of land set by provincial People’s Committees in 1994 based on the Price bracket table of kinds of land in the Government's Decree No. 87/CP on August 17, 1994.
+ For land put up as collateral, land being distrained property for judgment enforcement, the cost price of land is calculated depending on each specific case as guided above.
- The compensation for damage to land.
- The compensation for damage to crops.
- The compensation, support and resettlement and expenses on the organization of compensation, support and resettlement as prescribed by law.
If the expenses on compensation, support, resettlement, and the expenses on the organization of compensation, support, resettlement stated above have no invoice, then make a List specifying: the names, addresses of the receivers, the compensation and support amount, their signatures. The list must be certified by the local authorities where the land is given compensation and support in accordance with law provisions on compensation, support, and resettlement when the State withdrawing land.
- The fees and charges as prescribed by law provisions related to land tenancy grant.
- The expenses on land renovation and leveling
- The expenses on infrastructural construction such as traffic roads, electricity, water supply and drainage, post and telecommunications…
- The value of infrastructure and constructions on the land.
- Other expenses related to the real estate transferred.
If an enterprise carries on various business lines, the expenses must be separately calculated. If the expenses cannot be separately calculated, the general expense shall be distributed based on the ratio of revenue from real estate transfer to the total revenue of the enterprise.
The expenses paid by the State or other capital sources must not be included in the expenses on real estate transfer.
2. The enterprise income tax rate on real estate transfer is 25%.
3. Calculating the enterprise income tax amount payable:
The enterprise income tax in the tax period on the real estate transfer equals the chargeable income from real estate transfer multiplied by (x) 25%.
The income from real estate transfer must be separately determined to declare and pay tax. The preferential tax rate, the tax exemption or reduction period as prescribed in Chapter VI of this Circular do not apply to the income from real estate transfer.
If the real estate transfer makes a loss, such loss must not be offset against the income from other production and business activities, but shall be transferred to the taxable income from the real estate transfer in the succeeding years (if any). The loss transfer period must not be longer than 5 consecutive years as from the year succeeding the loss-making year.
The tax declaration and payment dossiers, the income tax payment receipts on the income from real estate transfer in the locality where the real estate is transferred are the basis for tax settlement procedures at the locality where the head office is situated.
4. When a credit institution receives the real estate value being collateral for assuring the duty fulfillment, the credit institution must declare and pay tax on the income from real estate transfer to the State budget when it is allowed to transfer real estate as prescribed by law. If real estate being collateral is up for auction, the money collected must be paid as prescribed by the Government’s provision on collateral of credit institutions, then declare and pay tax as prescribed. After the amount above are paid, the remaining money shall be refunded to the organizations that put up their real estate as collateral.
When a credit institution is allowed to transfer real estate put up as collateral as prescribed by law to recover their capital, if the cost price of the real estate is not determined, it shall equal (=) the loan payable under the real estate collateral contract plus (+) the outstanding loan interest up to the time of real estate collateral liquidation under the credit contract plus (+) the expenses arising during the real estate transfer with valid receipts and invoices.
5. If real estate being collateral is up for auction by the judgment enforcement agency, the money collected must comply with the Government’s Decree on distraining and putting up land tenancy for auction for judgment enforcement. The organization authorized to hold real estate auctions must declare and deduct the tax on income from real estate transfer paid to the State budget. Specify the tax declaration and payment for the collateral sale for judgment enforcement.
When the judgment enforcement agency transfers the real estate being judgment enforcement property, if its cost price is not determined, the cost price shall equal (=) the debt payable under the Court’s judgment plus (+) the expenses arising during the real estate transfer with valid receipts and invoices.
Tìm kiếm
Thông tư 123/2012/TT-BTC (Bản Word)