Circular No. 06/2010/TT-BTC guiding the determination of revenue for corporate income tax purposes in relation to golf ticket sales and membership card sales.

CIRCULAR

Guidelines for Determining Revenue Subject to Corporate Income Tax for Ticket Sales and Membership Card Sales at Golf Courses

 for golf course ticket sales and membership card sales activities

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Pursuant to the Law on Corporate Income Tax No. 14/2008/QH12 dated June 3, 2008, and the Government Decree No. 124/2008/NĐ-CP dated December 11, 2008 detailing and guiding the implementation of certain provisions of the Law on Corporate Income Tax;
Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Finance supplements guidelines for determining revenue subject to corporate income tax for ticket sales and membership card sales activities at golf courses as follows:

Article 1. Amend Point 3.9 Clause 3 Section III Part C of Circular No. 130/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance as follows:

"3.9. For golf course business operations, revenue from selling membership cards, selling tickets for playing golf, and other receipts during the tax period shall be determined as follows: a) For daily ticket and play card sales, the revenue from golf course business operations serving as the basis for calculating taxable income under the Corporate Income Tax is the amount received from ticket and card sales occurring within the tax period. b) For prepaid multi-year membership card sales, the revenue serving as the basis for calculating taxable income under the Corporate Income Tax for each year is the actual amount received from card sales divided by the number of years the card can be used. Example 1: Company Limited A1 is a golf course business operator. In 2009, the company sold a membership card to customer B1 for $36,000 (including special consumption tax but excluding value-added tax), with a service provision period of 40 years and payment made in full at the time of purchase.

In this case, when determining revenue subject to corporate income tax for the sale of golf course membership cards to customer B1, Company Limited A1 will allocate the revenue received from the sale of the card over the term of the card ($36,000 divided by 40 years equals $900 per year).

Example 2: Company Limited A2 is a golf course business operator. In 2009, the company sold a membership card to customer B2 for $36,000 (including special consumption tax but excluding value-added tax), with a service provision period of 40 years and payment terms as follows over the first five years according to the contract:

In this case, when determining revenue subject to corporate income tax for the sale of golf course membership cards to customer B2, Company Limited A2 will allocate the revenue received from the sale of the card over the term of the card ($36,000 divided by 40 years equals $900 per year).

Example 3: Company Limited A3 is a golf course business operator. In 2009, the company sold a membership card to customer B3 for $36,000 (including special consumption tax but excluding value-added tax), with a service provision period of 40 years and payment made in equal installments every five years. Specifically, as follows:

In this case, when determining revenue subject to corporate income tax for the sale of golf course membership cards to customer B3, Company Limited A3 will allocate the revenue received from the sale of the card over the term of the card ($36,000 divided by 40 years equals $900 per year)."

Article 2. Implementation and Effectiveness

1. This Circular takes effect from the date of issuance and applies from the 2009 tax period.

2. During the implementation process, if there are any difficulties, organizations and individuals are requested to report to the Ministry of Finance for timely guidance and resolution.