On October 7, 2019, Hanoi Tax Department issued Official Letter No. 76589/CT-TTHT. Whereby:
In case the Company is headquartered in Hanoi (the Company does not establish affiliated units in other provinces) directly signs a contract with the investor on the construction of factory in other province and city (including construction items, sale and installation of equipment and construction supervision), and the contract value including VAT is from VND 1 billion or more, the Company is responsible to declare and pay extra-provincial VAT of the factory-building contract for the total value (VAT excluded) of the hand-over construction. This amount of VAT shall be paid to the managing tax office in that province or city according to the provisions of Clause 1, Article 2, Circular No. 26/2015/TT-BTC dated February 27, 2015, issued by the Ministry of Finance.
In case the Company signs a contract to hire a sub-contractor (the location of the headquarter of the Company is different from the province or city where the construction works are located) to perform a number of construction items, installation and supply of goods for factory construction in other province or city, such sub-contractor shall declare and pay extra-provincial VAT to the managing tax office in that province or city according to current regulations.
The amount of tax paid (according to the tax payment receipt) on the revenue from construction, installation, extra-provincial sales, transfer of real estate can be deducted from the VAT payable according to the VAT declaration of the tax payer at their head office.
