Does an enterprise transferring capital contribution have to pay corporate income tax?

Based on Clause 1 Article 14 Circular 78/2014/TT-BTC regulations on the scope of application of income from capital transfer are as follows:

“1. Scope of application:

Income from capital transfer of an enterprise is income earned from transferring part or all of the invested capital of an enterprise to one or more other organizations or individuals (including cases of selling the enterprise). . The time to determine income from capital transfer is the time of capital ownership transfer.

In case an enterprise sells the entire single-member limited liability company owned by an organization in the form of transferring capital attached to real estate, then declare and pay corporate income tax according to the transfer activity. real estate and declare according to the corporate income tax declaration (form No. 08) issued with this Circular.

In case an enterprise transfers capital and does not receive it in cash but receives assets or other material benefits (stocks, fund certificates...) and generates income, it must be subject to corporate income tax. The value of assets, stocks, fund certificates... is determined according to the selling price of the product on the market at the time of receiving the assets..”

Accordingly, enterprises transferring capital contributions must payCorporate income tax, enterprises receiving transferred capital contributions do not have to pay corporate income tax. Thus, your company is not subject to corporate income tax from receiving capital transfer.

Is transfer of contributed capital of an enterprise subject to value added tax?

BasePoint d Clause 8 Article 4 Circular 219/2013/TT-BTC Regulations on cases not subject to value added tax are as follows:

“d) Capital transfer includes the transfer of part or all of the capital invested in another economic organization (regardless of whether or not a new legal entity is established), transfer of securities, transfer of rights Capital contribution and other forms of capital transfer according to the provisions of law, including cases of selling an enterprise to another enterprise for production and business purposes and the purchasing enterprise inherits all rights and obligations of the selling enterprise under provisions of law.

Example 6: In April 2014, Company A contributed capital with machinery and equipment to establish Joint Stock Company B. The value of the capital contribution of Company A was received by the Council of the contributing parties. Valuable capital is 2.5 billion VND, equal to 25% of the capital of Joint Stock Company B. In November 2014, Company A sold its capital contribution in Joint Stock Company B to ABB Investment Fund for 4 billion VND. VND, the amount of VND 4 billion earned by Company A is capital transfer revenue that is not subject to VAT.”

Thus, income from capital transfer activities of enterprises is not subject to value added tax.