- Projects for building or renovating an independent housing or housing estate;
- Projects for building residential area synchronized with technical and social infrastructure in the rural areas;
- Projects for building urban areas;
- Projects using multi-purpose land which have residential land plots;
- Projects for building works for both residential and business purposes.
Accordingly, a project for building residential area in the form of only investing in technical infrastructure for the purpose of lot division for sale of grounds shall be also considered to be a residential construction project
As the result, the investor has to comply with the regulations in Clause 1 Article 19 of the aforesaid Law on housing.
Accordingly, upon transferring the condominium apartment, the EPE also has to declare and pay value added tax (VAT) and EIT in accordance with the regulations of Circular No. 219/2013/TT-BTC, Circular No. 78/2014/TT-BTC and Circular No. 151/2014/TT-BTC.
In which, it shall apply the tax rate of 10% to VAT and the tax rate of 20% to EIT
The EPE has to make value added invoice in order to hand to the buyer. In the case the EPE does not have value added invoice, it may contact with its supervisory tax authority for obtaining an unbounded invoice.
However, the parties involved in the capital contribution, investment cooperation, business cooperation, joint venture, association shall be only distributed profits (in money or shares) according to their contribution ratio in the contracts; the investor is not allowed to distribute housing products, land use rights to the parties involved in the investment cooperation (except for contribution of capital for establishment of a new legal entity).
In addition, Clause 8 Article 6 of the Law on housing No. 65/2014/QH13 also prohibits investors in residential construction projects from authorizing or assigning the parties involved in investment cooperation, joint venture, association, capital contribution or other organizations, individuals to conclude agreements on housing lease, lease purchase, sale, deposit agreements on housing-related transactions or agreement on trading of land use rights in the projects.
According to the Department of Taxation of Ha Noi city’s opinions provided in this Official letter, if the adjustment, supplement to the project’s investment objectives are carried out according to the regulations of laws, are accepted by the authorities and such adjustment, supplement ensure that the project is still the project of investment in manufacturing or trade of VATable goods/services, this activity of project transfer shall be still exempt from declaration and payment of VAT.
However, Clause 2 Article 24 of the new Law on housing prescribes: “Apartments must have closed designs and their floor areas must be conformable with construction standards & regulations”. As the result, although the new Law on housing no longer regulates the required minimum area of commercial housing, it must ensure the minimum area in accordance with the construction standards & regulations.
Currently, the Ministry of Construction is going to promulgate the Regulations on condominiums. Accordingly, first, it will allow applying the minimum area standard of 25m2 to commercial housing (equivalent to the minimum area of social housing).
With regard to works in the form of “officetel” (an office combined with the function of residence), this is a new type of real estate which has not yet regulated in laws. However, the current demand for construction of this type of works in urban centers is so popular. Therefore, the Ministry of Construction will coordinate with other Ministries, branches in additionally promulgating regulations relating the construction of this type of works.
Accordingly, in the case a company executes a project on apartment building but now it does not continue executing and transfers the project to another investor, if the company is allowed to transfer the project by the authorities and meets conditions on investment projects, it shall not declare and pay VAT. Upon making the value added invoice, the line of transfer price is the VAT - exclusive price, the lines of tax rate and VAT amount are not be declared and crossed out.
This Circular applies to agencies and entities involved in the establishment, management and use of housing and real estate market information system.
This Circular comes into force as of February 1st, 2017.
Regulations on reporting of basic information about real estate projects, reporting of construction and investment situation prescribed in Points a, b Clause 2 Article 4 and reporting of house sale, house lease, transfer of land use right and land lease prescribed in Point c Clause 2 Article 4 of the Circular No. 11/2013/TT-BXD dated July 31st, 2013; housing and real estate market statistical indicators prescribed in the Circular No. 05/2012/TT-BXD dated October 10th, 2012; regulations on reporting, statistics and aggregation of the construction industry with respect of housing and real estate market statistical indicators according to templates No.: 12/BCDP, 13a/BCDP, 13b/BCDP, 14/BCDP, 15/BCDP, 16/BCDP promulgated under the Circular No. 06/2012/TT-BXD dated October 10th, 2012 shall be null and void as of the entry into force of this Circular.