Official Dispatch No. 8336/BTC-CST of the Ministry of Finance on the implementation some provisions taking effect from 01/7/2013 at the Law amending and supplementing a number of articles of the Law on enterprise income tax (EIT) and Law amending and supplementing a number of articles of Law on value added tax (VAT)

THE MINISTRY OF FINANCE

Official Dispatch No. 8336/BTC-CST of the Ministry of Finance  on the implementation some provisions taking effect from 01/7/2013 at the Law amending and supplementing a number of articles of the Law on enterprise income tax (EIT) and Law amending and supplementing a number of articles of Law on value added tax (VAT)

On June 19, 2013, the National Assembly passed the Law amending and supplementing a number of articles of the Law on EIT and Law amending and supplementing a number of articles of Law on VAT, of which some provisions take effect on July 01, 2013.

In the present time, the Ministry of Finance is urging in coordinating with concerned agencies to submit to the Government for promulgation of Decree detailing the implementation and promulgation of Circular guiding implementation of provisions taking effect on 01/7/2013.

Pending the guiding documents, the Ministry of Finance suggests People’s Committees of central-affiliated cities and provinces to pay attention to directions for the Services of Finance, Tax Departments, and State Treasuries in their localities in carrying out the following affairs:

1. To coordinate with the concerned agencies in localities to push up propagation to organizations, enterprises, householders and individuals about two new tax laws mentioned above.

2. To organize implementation and notify to organizations and enterprises in their localities for implementation:

a) Applying VAT tax rate of 5% for contract of sale, lease, and lease for purchase of social dwelling houses as prescribed in the Law on Housing from 01/7/2013;

b) Conducting reduction of 50% for the VAT tax rates from 01/7/2013 to the end of 30/6/2014 for sale, lease, and lease for purchase of trading houses being the completed apartments with floor area less than 70 m2 and at sale price of less than 15 million VND/m2.

c) From 01/7/2013, applying EIT tax rate of 20% for enterprises, including cooperatives attaining total annual revenue not exceeding VND 20 billion. Revenue as the basis for defining enterprises fall in subjects eligible for application of the tax rate of 20% is the total revenue of the adjacent previous year.

Tax rate of 20% shall not apply to the following incomes:

- Incomes from capital transfer, transfer of right to contribute capital; income from real estate transfer (except incomes from social dwelling house investment and business for sale, lease, lease for purchase) incomes form investment project transfer, transfer of right to participate in investment projects, transfer of right to survey or mine minerals; incomes from production and business operation abroad;   

- Incomes from searching, exploration and extraction operation for petroleum and other precious scarce resource and incomes from activities of mining minerals;

- Incomes from business of services subject to excise tax as prescribed by Law on excise tax.

d) Applying EIT tax rate of 10% for income part of enterprises from sale, lease, lease for purchase of social dwelling houses arising from 1/7/2013.

Social dwelling houses mean houses being invested in construction by State or organizations and individuals of all economic sectors and satisfying the criteria about dwelling house, sale price, rent price, subjects and conditions to be purchased, rented, rented for purchase of social dwelling houses as prescribed by law on dwelling houses. 

Specific guidance for implementation shall comply with provisions of the Government and guides of the Ministry of Finance.

The Ministry of Finance suggests People’s Committees of central-affiliated cities and provinces to pay attention to direction of implementation.

For the Minister of Finance

Deputy Minister

Vu Thi Mai