(Chinhphu.vn) – Time of determining taxable turnover is the time when the seller hands over the real estate to the buyer, regardless of whether the buyer has registered property ownership, land use rights, and established land use right at competent State authorities.

Through the receiving and answering system to recommendations of businesses, the Thanh Nam Investment and Trade Development Co., Ltd (in Hanoi) would like to request functional agencies to guide the time for determining taxable turnover for activities of real estate transfer.

The real estate project of Thanh Nam Investment and Trade Development Co., Ltd is a mixed building which has been tested and put into use. The apartments have not been sold, the Company has a sales policy that customers only need to pay 30% of the apartment value to be handed over to the customer to move in, the remaining amount will be gradually closed in the following years. The company is entitled to retain ownership until the customer completes financial obligations and liquidates of  the sale and purchase contract of the apartment

The company would like to ask, the time of determining taxable turnover of real estate transfer is the year of handing over to the customer or at the year of ownership transfer when the customer fulfills the financial obligations?

Besides, when handing over the apartment, between the Company and the customer, there are issues of disputes related to the area of ​​the apartment, the two parties have not proceeded to the liquidate of the sale and purchase contract. Therefore, the Company must hire a measuring unit and negotiate with the customer to adjust the purchase contract price. This takes 1-3 months for each apartment. However, the unit and customers still agree to sign the handover minutes of the apartment (the technical standard apartment) so that customers can move in.

So, the time to determine the taxable turnover of real estate transfer is the year of handing over the apartment or is the next year (when the dispute is resolved and signing the liquidation contract)?

Regarding this issue, The General Department of Taxation - Ministry of Finance has the following opinions:

Clause 1, Article 5 of the Decree No. 209/2013 / ND-CP dated December 18, 2013 stipulates: “The time for determining value-added tax on goods is the time of transferring goods ownership or use right to purchasers, regardless of whether money has been collected or not.”.

n Clause 7, Article 7 of the Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of VAT law and the Decree No. 209/2013 / ND-CP dated December 18, 2013 The Government shall detail and guide the implementation of a number of articles of the Law on VAT, which stipulate the tax calculation prices as follows:

 “For goods sold by installment or deferred payment, the price is calculated on the lump sum selling price without VAT of such goods, excluding installment and deferred payment interest”.

According to Clause 3, Article 20 of the Circular No. 39/2014 / TT-BTC, “In case the invoice has been made and delivered to the buyer, delivered the goods, provided the service, the seller and the buyer have declared the tax, then discovered the error, the seller and the buyer must make a written record or written agreement stating the error, and the seller makes an invoice to correct the error. The invoice clearly specifies the adjustment (increase or decrease) of the quantity of goods, the selling price, the VAT rate ..., the VAT amount for the invoice number ...,Notations... Based on the adjusted invoices, sellers and buyers declare adjustment of sales, purchase, output and input taxes. Adjusted invoices are not allowed record negative numbers (-) ".

Time to determine taxable turnover

Item a, Clause 3, Article 8 of the Decree No. 218/2013 / ND-CP dated December 26, 2013 of the Government stipulates:

“3. The revenue to calculate the assessable income for several cases specified as follows:

a) For goods sold by installment payment determined by the selling price paid once, not including payment of interest by installments or deferred payment”.

Clause 2, Article 14 of the Decree No. 218/2013 / ND-CP dated December 26, 2013 of the Government stipulates: “The time to determine revenue to calculate the assessable income is the time to hand over the real estate;”.

According to Clause 1, Article 17 of the Circular No. 78/2014 / TT-BTC dated June 18, 2014 of the Ministry of Finance: "Time of determining taxable turnover is the time when the seller hands over the real estate to the purchaser, regardless of whether the buyer has registered property ownership, land use right and established land use right. at the competent State agency ”.

Thus, the tax calculation for the transfer of real estate has been stipulated in the current legal documents on tax mentioned above. It is recommended that Thanh Nam Investment and Trading Development Co., Ltd. contact the tax office directly managing and providing all relevant documents for instructions to comply with regulations.