According to the provisions of Clause 4, Article 5 of Circular No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance guiding the implementation of the Law on Value Added Tax (VAT) and Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government stipulating: In cases where an enterprise transfers an investment project to another enterprise, if the investment project meets the investment project conditions as prescribed by the Investment Law and is intended to serve the production, trading of goods, and services subject to VAT, then upon transfer, the transferring enterprise is not required to declare, calculate, and pay VAT. However, Circular 219 does not specify the basis for determining whether the enterprise has engaged in project transfer activities or not.
On April 1, 2024, the General Department of Taxation issued Official Letter No. 1327/TCT-CS to the Tax Department of Thanh Hoa Province guiding VAT for cases where enterprises transfer investment projects ("Official Letter 1327"). In this letter, the General Department of Taxation replied that: since the contract does not indicate a transaction as the transfer of an investment project (contract name, contents, and terms of the contract), it is not possible to clearly determine the transfer transaction between the two enterprises to apply VAT according to regulations. Therefore, in this case, the General Department of Taxation is basing its determination of the project transfer transaction on the contract, thereby determining the VAT obligations of the enterprise.
Previously, in Official Letter No. 3409/CT-TTHT dated April 15, 2016, on value-added tax policies, the Ho Chi Minh City Tax Department responded to Saigon Co.op Investment and Development Joint Stock Company regarding VAT issues when transferring a part of a project. Accordingly, the Ho Chi Minh City Tax Department determined: if the real estate project invested by the Company meets the investment project conditions as prescribed and has a Decision of the competent authority allowing the transfer of a part of the project, it falls under the case where VAT is not required to be declared and paid. Thus, the basis for determining the occurrence of project transfer activities by the enterprise is the decision of the competent authority permitting the transfer of the project.
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