Circular No. 2926/TC/TCT stipulates the documents and taxes applicable to assets transferred or contributed by enterprises. This document determines that no VAT and corporate income tax shall be levied in the aforementioned cases, while also providing specific guidance on the use of documents.
Scope of application
Provincial Tax Departments; enterprises
Key points
- Enterprises are not subject to VAT and corporate income tax when contributing capital with assets or transferring assets among affiliated units (Article 22 of the Enterprise Law).
- Documents for contributed assets include certificates of contribution, asset transfer receipts, asset valuation reports, and asset transfers; if the value of fixed assets does not match market conditions, the unit must determine a reasonable value (Point 2 a).
- Assets that require registration of ownership or land use rights contributions must issue invoices with values equal to the contribution value as recorded in the Board of Directors' minutes; no stamp duty shall be levied (Point 2 b).
- In cases where private enterprise business assets do not need to go through procedures for transferring ownership to the enterprise (Point 2 b).
- Cases involving asset transfers among units prior to the issuance and tax declaration under this circular do not require adjustments (Point 3).
🌐 Social impact of this document
- Reducing tax burdens on enterprises when contributing capital or transferring assets.
- Requiring accurate determination of fixed asset values, avoiding discrepancies with market conditions.
- Simplifying administrative procedures for certain types of business assets of private enterprises.
❓ Frequently asked questions
Is an enterprise subject to VAT when contributing capital with assets?
No, according to Article 22 of the Enterprise Law and Circular No. 2926/TC/TCT.
What are the necessary documents for determining the original value of fixed assets?
These include certificates of contribution, asset transfer receipts, asset valuation reports, and asset transfers (Point 2 a).
Must invoices be issued when contributing assets that require registration of ownership?
Invoices must be issued with values equal to the contribution value as recorded in the Board of Directors' minutes (Point 2 b).
Do private enterprise business assets need to transfer ownership?
No, these assets do not need to go through procedures for transferring ownership to the enterprise (Point 2 b).
Are adjustments required for asset transfers prior to the issuance and tax declaration under this circular?
No, such cases do not require adjustments (Point 3).
Full text
LETTER
OF THE MINISTRY OF FINANCE NO. 2926 TC/TCT DATE MARCH 14, 2005
REGARDING DOCUMENTATION AND TAXES FOR TRANSFERRED ASSETS,
CAPITAL CONTRIBUTIONS...
Dear: Provincial Tax Bureaus
The Ministry of Finance has received letters from several provincial tax offices and units regarding issues related to invoices, documentation, and taxes for cases involving capital contributions with assets to establish a business, asset transfers between member units within a business; division, merger in the case of splitting, separating, merging, consolidating, or changing the name of a business. Regarding this issue, The Ministry of Finance has the following opinion: Based on
the provisions of Article 22 of the Enterprise Law and Point 4, Clause II Management, Use, and Depreciation of Fixed Assets issued with Decision No. 206/2003/QĐ-BTC dated [date missing] by the Minister of Finance: 1. For assets contributed to establish a business, asset transfers between member units within a business; division, merger in the case of splitting, separating, merging, consolidating, or changing the name of a business are not subject to VAT and corporate income tax. 2. Documentation for capital contributions is as follows:
a) In cases where assets contributed do not require registration of ownership rights, there must be a certificate of contribution, asset transfer record, asset valuation report, and asset transfer document. These documents are considered legal documentation to determine the original value of fixed assets and depreciation according to regulations. If the value of fixed assets self-assessed by the unit does not match the actual market price of similar or comparable fixed assets, the unit must reassess a reasonable value for the fixed assets; if the value still does not align with the market price, the tax authority has the right to request the unit to reassess the value through the local Valuation Committee or an appraisal organization according to legal provisions.
b) For assets requiring registration of ownership rights or land use value contributions, invoices must be issued, and in the invoice, the asset value should match the contribution value as recorded by the Board of Directors; the VAT line is crossed out.
This invoice serves as a basis for transferring ownership at the competent authority.
In this case, contributed assets do not need to pay stamp duty. For assets requiring registration of ownership rights or land use value used as business assets by private enterprises, then there is no need to process transfer of ownership rights for the enterprise.
3. Cases involving asset transfers between units before this letter was issued and invoices have been issued and taxes declared do not require adjustment.The Ministry of Finance
hereby informs provincial tax bureaus under central administration to be aware and guide enterprises to implement accordingly. shall not be amended.does not require adjustment.
Ministry of Finance roughshall notify the Tax Departments of provinces and centrally governed cities for their information and to guide enterprises in implementation.
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