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blue-check Regarding PIT on compensation for contract liquidation

Official letter No. 21927/CTHN-TTHT dated June 18th, 2021 of the Department of Taxation of Ha Noi city regarding compensation upon liquidation of contract
Posted: 23/6/2021 3:07:39 PM | Latest updated: 2/8/2021 1:37:51 PM (GMT+7) | LuatVietnam: 5235 | Vietlaw: 520
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According to opinions of the Department of Taxation of Ha Noi city, in case a housing investor, because of objective reason, has to liquidate a contract of apartment sale before handing over the apartment to client and incurs compensation as agreed in the contract, the expenditure on compensation shall be accounted into deductible expenses upon determination of income liable to enterprise income tax if the conditions at Article 4 of Circular No. 96/2015/TT-BTCstatus2 are met.

The client shall not be subject to personal income tax (PIT) with regard to the compensation because it is entitled to PIT exemption according to point n clause 3 Article 12 of Circular No. 92/2015/TT-BTCstatus2 .

Ms Phuong Thao (VietlawOnline.com)
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Published Vietlaw's Newsletter No. 520
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