On July 29, 2022, The Government issued Decree 49/2022/ND-CP modifying Decree 209/2013/ND-CP directing the Law on VAT. As a result, the following situations call for the land price permitted to be deducted for value-added tax calculation:
- Case of being assigned land by State for investment in infrastructure, construction of houses for sale, land price permitted to be deducted for value-added tax calculation includes land levy payable to state budget and cost for compensation and ground clearance as prescribed by law (If any). (Eliminate restrictions compared to the existing situation “exclusive of the exempted or reduced land levy”
- Auction for land-use right, the land price permitted to be deducted for value-added tax calculation is land price winning auction
- Case of renting land for construction of infrastructure, houses for sale, the land price permitted to be deducted for value-added tax calculation includes land levy payable to state budget and cost for compensation and ground clearance as prescribed by law (If any).
- (Eliminate restrictions exclusive of the exempted or reduced land levy)
- where business establishments are transferred the land-use right from organizations or individuals, the land price permitted to be deducted for value-added tax calculation includes land price at time of being transferred the land-use right and value for infrastructure is exclude. (Current including infrastructure value (if any))
If a business establishment accepts a donation of a land use right as capital from a group or an individual, the land price permitted to be deducted for value-added tax calculation is the amount specified in the capital contribution agreement. In case transfer price for land use rights is lower than capital contribution price, Only the land price is subtracted in accordance with the transfer price.
- In case where real estate business establishments perform in form of building – transfer (BT) and pay by value of land-use right, the land price permitted to be deducted for value-added tax calculation is price at time of concluding into BT contracts as prescribed by law.
Decree 49/2022/ND-CP takes effect from September 12, 2022.
