(Chinhphu.vn) – The LIFE Construction Co., ltd is based in Hanoi, has no branches or representative offices in other provinces. The company has construction in Hai Phong Industrial Zone, is subject to 0% VAT rate. Through the Receiving System, responding to enterprises' recommendations, the Company would like to ask, does the company have to pay current taxes?

In addition, the LIFE Construction Co., Ltd constructed in Bac Ninh, signed a contract to re-assign some items to subcontractors (subcontractors also work outside the province). So, is LIFE Company Co., Ltd entitled to require subcontractors to pay current taxes on the workload they perform?

The Bac Ninh Tax Department requires the LIFE Company Co., Ltd to pay current tax (about VND 100 million). However, the LIFE Company still has about VND 5 billion of VAT of the subcontractor for construction of the project in the Export Processing Zone in Hai Phong which has not been finalized. Currently the company is in trouble,so, what does the Company need to do to get a deferment or a deduction of the tax payable?

Regarding this issue, The Ministry of Finance has the following opinions:

Pursuant to the guidance in Article 9 of the Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the VAT Law and Decree No. 209/2013 / ND-CP dated December 18, 2013 2013 of the Government detailing and guiding the implementation of a number of articles of the VAT Law:

The LIFE Construction Co., ltd (headquartered in Hanoi City, declaring and paying VAT by tax deduction method) has construction activities for enterprises in the non-tariff area (0% VAT rate is applicable). In provinces and cities directly under the Central Government (the Company does not have a branch in this province or city) other than the head office, the Company does not have to declare and pay VAT for this current construction activity.

Pay current taxes when assigning works to subcontractors

In case The LIFE Construction Co., Ltdhas a construction contract in Bac Ninh Province (the Company does not have a branch in this province), the contract is agreed by the investor to pay the entire value of the project to the Company and the Company. issues VAT invoices for the whole project; then the Company has a contract to re-assign some work items to the subcontractor for implementation, the Company declares and pays VAT for this current construction activity in Bac Ninh Province in accordance with the regulations for the whole price. Value of handover works without VAT.

In case the The LIFE Construction Co., Ltdhas not paid this current tax amount, the Company will be charged late for the unpaid amount as prescribed.

In case the LIFE Company has an input VAT amount not yet fully deducted and eligible for VAT refund, the Company shall prepare a tax refund request file and submit it to the directly managed tax authority (in Hanoi City) for being considered for settlement of tax refund according to regulations, the refunded VAT amount (if any) shall be offset against the payable VAT amount of current construction activities in Bac Ninh Province according to the Law on Tax Administration from the date the tax agency issues a decision on tax refund and clearing of State budget revenues.