VAT refund regulation in case of project transfer

- Point d Clause 3 Article 2 of the Government's Decree No. 209/2013 / ND-CP dated December 18, 2013 detailing and guiding the implementation of a number of Articles of the Law on Value-Added Tax:

"Article 2. Taxpayers ...

3. Cases not subject to value added tax declaration and payment: ...

d) Organizations and individuals that transfer investment projects to produce and trade in goods and / or services subject to value added tax to enterprises and cooperatives. ... ˮ

- Clause 4 Article 4 of Circular No. 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value-Added Tax and Decree No. 209/2013 / ND-CP dated December 18 / 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Value-Added Tax stipulating:

Article 5. Cases not subject to VAT declaration and payment

...4. Organizations and individuals that transfer investment projects to produce and trade in goods and services subject to value added tax to enterprises and cooperatives

Example 18: Joint-stock company P executes an investment project to build an industrial alcohol factory. By March 2014, the investment project was 90% completed compared to the design project and the investment value was VND 26 billion. Due to financial difficulties, Joint Stock Company P decided to transfer the entire project being invested to Joint Stock Company X at a transfer price of VND 28 billion. Joint-stock company X receives the transfer of the above investment project to continue industrial alcohol production. Joint-stock company P is not required to declare and pay VAT on the project value transferred to joint-stock company X.

Based on the above provisions and guidelines, in case Company A transfers the whole project of investment component to build "Trade Center" to Company B if it is determined to transfer the investment project according to in accordance with the provisions of law for the production and trading of goods and services subject to value-added tax, they are not required to declare and calculate value-added tax according to the provisions at Point d, Clause 3, Article 2 of the Decree. Decree No. 209/2013 / ND-CP dated December 18, 2013 of the Government and Clause 4 Article 5 of Circular 219/2013 / TT-BTC dated December 31, 2013 of the Ministry of Finance.

If it is determined that the property is transferred, VAT declaration and calculation must be made according to regulations.