On March 29th, 2021, Dong Nai Tax Department issued Official Letter No. 3286/CT-TTHT, whereby:
In case that the Company subleases the factory to another company and the lessee does not enter any power supply contract with the Power Company. If the Power Company signs a contract with the Lessor, and issue invoices under the name and tax code of the Lessor then:
When recovering the paid fees by the Lessor to the Power Company, the Lessor needs to issue an invoice to the Lessee with the fixed price and tax rate for VAT that the electricity supplier has stated on the invoice issued to the Lessor to let the Lessee record the electricity bill into the enterprise’s expenses. The invoice must clearly state the content of the electricity bill recovery.
For these electricity charges, the Lessor is not required to declare VAT under the provisions of Clause 7, Article 5, Circular No. 219/2013/TT-BTC dated December 31st, 2013 of the Ministry of Finance, and it shall not be recognized as deductible expenses when determining the taxable income of CIT due to its irrelevant to the production and business activities of the Lessor.
