Guidance on declaring corporate income tax from real estate transfer activities for business cooperation contracts

According to current regulations, enterprises that sign a business cooperation contract but do not establish a separate legal entity and divide business results by profits after corporate income tax from real estate transfer activities , the parties to the business cooperation contract must appoint one party as a representative. responsible for declaring and paying corporate income tax on behalf of the parties participating in the business cooperation contract.

Pursuant to Article 4 of Circular No. 105/2020/TT-BTC dated December 3, 2020 of the Ministry of Finance guiding tax registration; Clause 2, Article 7 of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government regulating tax declaration dossiers; Article 5 of Circular No. 78/2014/TT-BTC dated June 18, 2014 of the Ministry of Finance regulating revenue; Article 17 of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance regulating tax declaration, tax calculation, tax finalization, allocation and payment of corporate income tax.

Accordingly, the party appointed as representative is responsible for issuing invoices, recording revenue, expenses and declaring and paying corporate income tax for the remaining parties . The party appointed as representative must declare taxes separately for the business cooperation contract compared to the enterprise 's obligations according to the provisions of the law on tax administration.

Real estate transfer activities are subject to tax allocation.

The amount of corporate income tax payable to each province where real estate transfer activities are conducted is provisionally paid quarterly and finalized equal to (=) the revenue for calculating corporate income tax of real estate transfer activities in each province multiplied (x) by 1% .

* Regarding quarterly tax declaration and provisional tax payment:

Representative enterprises do not have to submit quarterly tax declarations but must determine the amount of provisional tax to be paid quarterly according to regulations to pay corporate income tax to the state budget for each province where real estate transfer activities take place.

* About tax settlement:

The representative enterprise declares and settles corporate income tax for all real estate transfer activities of the business cooperation contract according to form No. 03/TNDN, determines the amount of corporate income tax payable for each province according to the provisions in the appendix of the table of allocation of corporate income tax payable for localities where the revenue from real estate transfer activities is enjoyed according to form No. 03-8A/TNDN issued with Appendix II of Circular 80 /2021/TT-BTC for the direct tax authority; pays money to the state budget for each province where real estate transfer activities are carried out according to the provisions of Clause 4, Article 12 of Circular No. 80 /2021/TT-BTC .

The amount of tax provisionally paid during the year in the provinces (excluding the amount of tax provisionally paid for revenue from implementing infrastructure investment projects, houses for transfer or lease-purchase, with prepayments from customers according to progress, but this revenue has not been included in the revenue for calculating corporate income tax in the year) is deducted from the amount of corporate income tax payable from real estate transfer activities of each province on form No. 03-8A/TNDN issued with Appendix II of Circular No. 80/2021/TT-BTC . If not fully deducted, it will continue to be deducted from the amount of corporate income tax payable from real estate transfer activities according to the final settlement at the head office on form No. 03/TNDN issued with Appendix II of Circular No. 80/2021/TT-BTC .

In case the amount of tax provisionally paid quarterly is less than the amount of tax payable according to the tax settlement on the tax settlement declaration at the head office on form No. 03/TNDN issued with Appendix II of Circular No. 80/2021/TT-BTC , the taxpayer must pay the remaining tax to the locality where the head office is located. In case the amount of tax provisionally paid quarterly is greater than the amount of tax payable according to the tax settlement, it is determined as an excess tax and handled according to the provisions of Article 60 of the Law on Tax Administration and Article 25 of Circular No. 80/2021/TT-BTC .

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