Decree No. 92/2013/ND-CP detailing the implementation of certain provisions of the Law Amending and Supplementing Several Provisions of the Law on Corporate Income Tax and the Law Amending and Supplementing Several Provisions of the Law on Value Added Tax, which took effect from July 1, 2013.

DECREE

Providing detailed implementation of certain provisions effective from July 1, 2013 of The Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Taxand The Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax

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Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on Tax Administration dated November 29, 2006 and the Law Amending and Supplementing Certain Provisions of the Law on Tax Administration dated November 20, 2012;

The Law on Value Added Tax dated June 3, 2008 and the Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax dated June 19, 2013;

Based on the Law on Corporate Income Tax dated June 3, 2008 and the Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax dated June 19, 2013;

At the proposal of the Minister of Finance,

The Government promulgates this Decree providing detailed implementation of certain provisions effective from July 1, 2013 of The Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax and The Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax.

Article 1. Scope of Regulation

This Decree provides detailed implementation of Clause 3 Article 1, Clause 2, Clause 3 Article 2 of The Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax dated June 19, 2013 and Point 2 Clause 6, Point 2b Clause 7 Article 1 of The Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax dated June 19, 2013.

Article 2. Application of a corporate income tax rate of 20% for enterprises with annual total revenue not exceeding 20 billion VND as provided for in Point 2 Clause 6 Article 1 of The Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax

1. Enterprises established in accordance with Vietnamese law, including cooperatives and units under state budget that have annual total revenue not exceeding 20 billion VND shall apply a tax rate of 20% starting from July 1, 2013.

The annual total revenue serving as the basis for determining enterprises eligible for application of the 20% tax rate as stipulated herein is the total revenue from selling goods and providing services of the enterprise in the immediately preceding year.

In cases where enterprises have a total operating period from establishment to the end of the corporate income tax calculation period in 2012 less than 12 months or more than 12 months according to regulations, or newly established within the first six months of 2013, the revenue serving as the basis for determining enterprises eligible for application of the 20% tax rate as stipulated herein is the average monthly revenue of 2012 or the average of the months in 2013 up to June 30, 2013, not exceeding 1.67 billion VND.

2. The 20% tax rate prescribed in Paragraph 1 of this Article shall not apply to the following income:

a) Income from capital transfer, income from capital contribution rights transfer; income from real estate transfer (excluding income from social housing investment-business activities as stipulated in Article 3 of this Decree), income from project transfer, income from project participation rights transfer, income from mineral exploration and exploitation rights transfer; income from production and business activities outside Vietnam;

b) Income from oil and gas exploration, exploitation, rare resource exploitation activities, and income from mineral exploitation activities;

c) Income from business services subject to special consumption tax as provided for in the Special Consumption Tax Law.

Article 3. Application of a corporate income tax rate of 10% for income from social housing investment-business activities as provided for in Point 2b Clause 7 Article 1 of The Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax

1. Enterprises engaged in social housing investment-business activities shall apply a tax rate of 10% for income from selling, leasing, and lease-purchase of social housing arising from July 1, 2013, regardless of the contract signing date for selling, leasing, or lease-purchase of social housing.

Social housing as stipulated herein is housing constructed by the State or economic entities and individuals belonging to various economic sectors, meeting criteria regarding housing standards, sale prices, rental prices, lease-purchase prices, target groups, and conditions for purchasing, renting, and lease-purchasing social housing as prescribed by laws on housing.

Income from social housing investment-business activities subject to a 10% tax rate as stipulated herein is income from selling, leasing, and lease-purchase arising from July 1, 2013; in cases where enterprises cannot separately account for income from selling, leasing, and lease-purchase of social housing arising from July 1, 2013, the income subject to a 10% tax rate shall be determined based on the ratio between revenue from selling, leasing, and lease-purchase of social housing and the total revenue of the enterprise during the corresponding period.

2. Enterprises eligible for tax benefits prescribed in Paragraph 1 of this Article are those implementing accounting systems, invoices, and documents and declaring taxes accordingly.

Article 4. Apply a tax rate of 5% for the sale, lease, or lease-purchase of social housing as stipulated in Clause 3, Article 1, and reduce the value-added tax rate by 50% for the sale, lease, or lease-purchase of commercial housing as stipulated in Clause 3, Article 2 of the Law amending and supplementing certain provisions of the Value-Added Tax Law as follows:

1. Apply a value-added tax rate of 5% from July 1, 2013, for the sale, lease, or lease-purchase of social housing.

Social housing referred to in this clause is housing as defined in Clause 1, Article 3 of this Decree.

In cases of selling, lease-purchasing social housing, the 5% tax rate shall be applied according to the sales, lease-purchase contracts signed from July 1, 2013, and shall apply to the payment amount from July 1, 2013, of contracts signed before July 1, 2013.

In cases of leasing social housing, the 5% tax rate shall be applied based on the time of receiving payment according to the contract (including cases of collecting rent in advance for multiple periods) from July 1, 2013. If a business has not received rental income from July 1, 2013, then it shall be applied according to the issuance date of the invoice.

2. Reduce the value-added tax rate by 50% from July 1, 2013, to June 30, 2014, for the sale, lease, or lease-purchase of commercial housing that is fully completed with a floor area under 70 square meters and a selling price under 15 million VND per square meter.

Commercial housing that is fully completed as defined in this clause is a unit that has been completed and accepted according to the design of the developer and can be used immediately upon handover; for leased units, they must meet the condition of having an area under 70 square meters and a value equivalent to a similar unit sold at less than 15 million VND per square meter.

The selling price, lease-purchase price, and rental price of commercial housing shall be clearly stated in the contract; for cases of sale or lease-purchase, the price includes a 10% value-added tax and maintenance fees as prescribed. For commercial housing sold through installment or deferred payment methods, the selling price is the lump-sum selling price including a 10% value-added tax and maintenance fees but excluding installment interest, deferred payment interest, and other interest.

The reduction of 50% in the value-added tax rate for sales, lease-purchase contracts of commercial housing signed before July 1, 2013, and contracts signed during the period from July 1, 2013, to June 30, 2014, shall apply to payments made during the period from July 1, 2013, to June 30, 2014.

The reduction of 50% in the value-added tax rate for leasing commercial housing shall be calculated based on the rental payments made in each period according to the lease contract from July 1, 2013, to June 30, 2014 (including cases of paying rent in advance for multiple years). If a business leases housing from July 1, 2013, to June 30, 2014, and has not yet received rental income, the reduction of 50% in the value-added tax rate shall be applied to the rental payments from July 1, 2013, to June 30, 2014.

Article 5. Effective Date

This Decree takes effect from the date of signature.

Article 6. Responsibility for Implementation

1. The Ministry of Finance shall provide guidance on implementing this Decree.

2. Ministers, Heads of Ministries equivalent to ministries, Heads of government agencies, Chairmen of provincial People's Committees, municipal People's Committees directly under the central government, and organizations and individuals are responsible for implementing this Decree./.