According to Circular No. 219/2013/TT-BTC of the Ministry of Finance, Mr. Chau's company needs to determine the value of land use rights at the time of transfer to calculate the deductible land price when determining the VAT calculation price.

However, the company is not a real estate developer, so there is no data on the land price that the investor has paid to the State; construction floor area of ​​the entire apartment complex; common area in the apartment building.

Mr. Chau asked, how is the land price deducted to calculate the VAT calculation price determined when the investor has not determined the land use right value at the time of transfer?

How is the land price deducted to calculate the VAT calculation price determined when the company does not have enough data to calculate the deductible land price according to the guidance in Circular No. 219/2013/TT-BTC?

Can the company use the land price list set by the People's Committee of the province or centrally run city at the time of signing the transfer contract to determine the deductible land price when determining the VAT calculation price for the apartment building? If yes, how to apply the coefficient?

District 1 Tax Department, Ho Chi Minh City responded to this problem as follows:

Pursuant to Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on VAT and Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government regulating detailing and guiding the implementation of a number of articles of the Law on VAT stipulating:

In Clause 6, Article 4, subjects are not subject to VAT: "6. Transfer of land use rights".

In Clause 10, Article 7 stipulates the VAT calculation price:

"10. For real estate transfer activities, the taxable price is the real estate transfer price minus (-) the land price deductible for VAT calculation.

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

… a.4) 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 receipt of the land use right transfer, including land price infrastructure value (if any); Business establishments are not allowed to declare and deduct input VAT on infrastructure already included in the deductible land use right value, which is not subject to VAT.

If the deductible land price does not include the value of the infrastructure, the business establishment may declare and deduct input VAT on the infrastructure that has not been included in the deductible land use right value and is not subject to VAT.

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

… a.7) In case of building multi-storey houses with many households and apartments for sale, the deductible land price calculated for 1m2 of house for sale is determined by the deductible land price according to regulations from a.1 to a.6 above divides (:) the number of m2 of construction floor excluding common areas such as corridors, stairs, basements, underground construction works".

Pursuant to Decision No. 02/2020/QD-UBND dated January 16, 2020 of the People's Committee of Ho Chi Minh City on promulgating regulations on prices of all types of land in Ho Chi Minh City in the period of 2020-2024; Guidance No. 4114/HDLCQ-STNMT-STC-SXD-CT dated May 28, 2020 on the application of the price list of all types of land issued together with Decision No. 02/2020/QD-UBND issued by the Department of Natural Resources and Environment – Department of Finance – Department of Construction – Tax Department of Ho Chi Minh City issued, in case the business receives real estate transfer from an individual and the transfer is in accordance with the provisions of law, if the land price cannot be determined at the time At the transfer point, when the enterprise transfers real estate, the land price deducted 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.

It is recommended that enterprises base themselves on the above provisions to determine the land price to be paid when calculating VAT.

District 1 Tax Sub-Department shall notify Mr. Nguyen Chau and request taxpayers based on the actual situation to compare with the provisions of law to comply with regulations. If there is any unclear content, please contact the District 1 Tax Department directly (Propaganda Team - Taxpayer Support) for guidance.

According to the Government Newspaper