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blue-check How to determine value of contributed capital upon calculation of tax on incomes from capital transfer

Official letter No. 20216/CTHN-TTHT dated June 7th, 2021 of the Department of Taxation Ha Noi city regarding determination of enterprise income tax (EIT) on incomes from capital transfer
Posted: 10/6/2021 7:49:41 AM | Latest updated: 1/3/2022 8:06:02 AM (GMT+7) | LuatVietnam: 5225 | Vietlaw: 515
VietlawOnline

According to point a clause 2 Article 14 of Circular No. 78/2014/TT-BTCstatus2 , assessable income from capital transfer shall be determined according to the following formula:

Assessable income = Transfer price - Purchase price of the capital transferred - Transfer cost

In which, “the purchase price of the capital transferred” to be subtracted upon calculation of tax is the value of the contributed capital accumulated to the time of transfer or re-purchase price (in case of selling the re-purchased capital) (Article 8 of Circular No. 96/2015/TT-BTCstatus2 ).

“The value of the contributed capital accumulated to the time of transfer” is determined based on the accounting books, documents or based on the audit results from an independent audit company in case of selling capital contributed in a wholly foreign-capitalized enterprise (Article 8 of Circular No. 96/2015/TT-BTCstatus2 ).

Ms Phuong Thao (VietlawOnline.com)
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blue-check 43223/CTHN-TTHTHow to determine deductible “purchase price” upon calculating tax on capital transfer
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Published Vietlaw's Newsletter No. 515
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