Decree No. 92/2013/ND-CP dated August 13, 2013 of the Government detailing a number of articles, which take effect on July 1, 2013, of the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax and the Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax

THE GOVERNMENT

Decree No. 92/2013/ND-CP of August 13, 2013, detailing a number of articles, which take effect on July 1, 2013, of the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax and the Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 29, 2006 Law on Tax Administration, and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Law on Tax Administration;

Pursuant to the June 3, 2008 Law on Value-Added Tax, and the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax;

Pursuant to the June 3, 2008 Law on Enterprise Income Tax, and the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax;

At the proposal of the Minister of Finance,

The Government promulgates the Decree to detail a number of articles, which take effect on July 1, 2013, of the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax, and the Law Amending and Supplementing a Number of Articles of the Law on Value-Added Tax.

Article 1. Scope of regulation

This Decree details Clause 3, Article 1, and Clauses 2 and 3, Article 2 of the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax, and Point 2, Clause 6, and Point 2b, Clause 7, Article 1 of the June 19, 2013 Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax.

Article 2. To apply the enterprise income tax rate of 20% for enterprises that have an annual total turnover not exceeding VND 20 billion as prescribed at Point 2, Clause 6, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax

1. To apply the income tax rate of 20% from July 1, 2013, for enterprises established under Vietnamese law, including cooperatives and income-generating non-business units that have an annual total turnover not exceeding VND 20 billion.

Annual total turnover serving as a basis for identifying an enterprise subject to the tax rate of 20% prescribed in this Clause is the enterprise’s total turnover from goods sale or service provision in the preceding year.

In case the total period of production or business operation of an enterprise since its establishment to the end of 2012 enterprise income tax period is less than 12 months, or its tax period exceeds 12 months under regulations, or it was newly established in the first six months of 2013,  the turnover to serve as a basis for determining that it is subject to the tax rate of 20% as prescribed in this Clause is its monthly average turnover in 2012, or in the first six months of 2013, which must not exceed VND 1.67 billion.

2. The tax rate of 20% prescribed in Clause 1 of this Article is not applicable to the following incomes:

a/ Incomes from capital transfer, transfer of the capital contribution right; incomes from transfer of real estate (except incomes from social housing investment and trading under Article 3 of this Decree), incomes from transfer of investment projects, transfer of the right to participate in investment projects, transfer of the right to explore and exploit minerals; and incomes from production and business activities outside Vietnam;

b/ Incomes from prospecting, exploration and exploitation of oil and gas and other precious and rare natural resources and incomes from mineral mining;

c/ Incomes from provision of services liable to excise tax in accordance with the Law on Excise Tax.

Article 3. To apply the enterprise income tax rate of 10% for incomes from social housing investment and trading under Point 2b, Clause 7, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax

1. Enterprises engaged in social housing investment and trading may apply the tax rate of 10% for their incomes from sale or lease of social houses or putting of these houses for rent-purchase, earned from July 1, 2013, regardless of the time of signing contracts for social housing sale, lease or rent-purchase.

Social houses referred to in this Clause are residential houses constructed by the State, organizations, or individuals of all economic sectors and satisfy the criteria on housing, selling price, rent rate or rent-purchase price, subjects eligible and conditions for purchase, rent or rent-purchase of social houses in accordance with the law on housing.

Incomes from social housing investment and trading subject to the tax rate of 10% prescribed in this Clause are incomes from sale, lease or putting of social houses for rent-purchase earned from July 1, 2013; in case an enterprise is unable to account separately incomes from sale, lease or putting of social houses for rent-purchase earned from July 1, 2013, incomes subject to the tax rate of 10% are determined by the ratio between the enterprise’s turnover from sale, lease or putting of social houses for rent-purchase and its total turnover in the same period.

2. Enterprises eligible for tax incentives provided in Clause 1 of this Article are those which implement regulations on accounting, invoices and documents and pay tax according to declarations.

Article 4. To apply the tax rate of 5% for sale, lease and putting of social houses for rent-purchase as prescribed in Clause 3, Article 1 and give a 50% reduction of the value-added tax rate for sale, lease and putting of commercial houses for rent-purchase as prescribed in Clause 3, Article 2 of the Law Amending and Supplementing a Number of Articles of the Value-Added Tax, as follows:

1. To apply the value-added tax rate of 5% from July 1, 2013, for sale, lease and putting of social houses for rent-purchase.

Social houses referred to in this Clause are residential houses defined in Clause 1, Article 3 of this Decree.

In case of sale, lease and putting of social houses for rent-purchase, the tax rate of 5% will be applied under social house sale or rent-purchase contracts which are signed from July 1, 2013 on, to sums of money paid from July 1, 2013 on, for the contracts signed before that date.

For rent of social houses, the tax rate of 5% will be applied based on the time of rent collection under contracts (including rent collection for many periods) from July 1, 2013 on. In case enterprises have not received the rents since July 1, 2013, the tax rate will be applied based on the time of invoice issuance.

2. To give a 50% reduction of the value-added tax rate from July 1, 2013, to the end of June 30, 2014, for sale, lease and putting for rent-purchase of commercial houses which are complete apartments and have a floor area of under 70 square meters and sale price of under VND 15 million per square meter each.

Commercial houses being complete apartments mentioned in this Clause are apartments completed and tested before acceptance according to the investor’s design and can be used for residence right after hand-over; an apartment for lease must have a floor area of under 70 square meters and a value equal to that of an apartment of the same type with a sale price of VND 15 million per square meter.

The taxable sale price, rent-purchase price or rent rate of a commercial house must be clearly stated in the contract; for case of sale or putting for rent-purchase, sale price or rent-purchase price inclusive of value-added tax of 10% and work maintenance charge as prescribed must be stated. For commercial houses sold by mode of installment or deferred payment, the taxable sale price is the lump-sum sale price inclusive of value-added tax of 10% and maintenance charge but exclusive of the installment or deferred payment interest and other interests;

The 50% reduction of value-added tax rate for commercial house sale or rent-purchase contracts which are signed before July 1, 2013, and those signed from July 1, 2007, to the end of June 30, 2014, will be applicable to sums of money paid from July 1, 2007, to the end of June 30, 2014.

The 50% reduction of value-added tax rate for lease of commercial houses is calculated on rent amount paid for each period under lease contacts signed from July 1, 2013, to the end of June 30, 2014 (including advance rent payment for many years). In case enterprises lease houses from July 1, 2013, to the end of June 30, 2014, but receive no rent, the 50% reduction of value-added tax rate will be given for the rent amount paid from July 1, 2013, to the end of June 30, 2014.

Article 5. Effect

This Decree takes effect on the date of its signing.

Article 6. Implementation responsibilities

1. The Ministry of Finance shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG