This article guides the procedures for contributing capital in the form of assets to establish a business.

1. Regulations on capital contribution with assets

Applying Article 34 of the Enterprise Law 2020, the assets contributed as capital are as follows:

"Article 34. Assets contributed as capital

1. Assets contributed as capital are Vietnam Dong, freely convertible foreign currency, gold, land use rights, intellectual property rights, technology, technical know-how, other assets valuable in Vietnamese Dong. Male.

2. Only individuals and organizations that are lawful owners or have lawful use rights to the property specified in Clause 1 of this Article have the right to use such property to contribute capital as prescribed by law. "

Thus, property owners with valuable assets in Vietnam Dong can be used to contribute capital to the enterprise or to establish the enterprise.

2. Valuation of assets contributed as capital

Applying Article 36 of the Enterprise Law 2020 guides the valuation of assets contributed as capital as follows:

“Article 36. Valuation of assets contributed as capital”

1. Assets contributed as capital other than Vietnam Dong, freely convertible foreign currencies or gold must be valued by members, founding shareholders or appraisal organizations and expressed in Vietnam Dong.

2. Assets contributed as capital upon enterprise establishment must be valued by founding members and shareholders on the principle of consensus or by a valuation organization. In the case of a valuation organization, the value of assets contributed as capital must be approved by more than 50% of the members and founding shareholders.

In case the assets contributed as capital are valued higher than the actual value of such assets at the time of capital contribution, founding members and shareholders jointly contribute an additional amount equal to the difference between the assessed value and the value of the assets contributed as capital. and actual value of assets contributed as capital at the end of valuation; at the same time jointly responsible for damage caused by intentionally valuing the assets contributed as capital higher than the actual value.

3. Assets contributed as capital in the course of operation shall be agreed upon by the owner, the Members' Council, for limited liability companies and partnerships, and the Board of Directors, for joint-stock companies, and capital contributors. valuation or by a valuation organization. In case the valuation organization makes a valuation, the value of assets contributed as capital must be approved by the capital contributor and owner, the Members' Council or the Board of Directors.

In case the assets contributed as capital are valued higher than the actual value of such assets at the time of capital contribution, the capital contributors, owners, members of the Members' Council, for limited liability companies and companies partnerships, members of the Board of Directors, for joint-stock companies, jointly contribute an additional amount equal to the difference between the assessed value and the actual value of the assets contributed as capital at the time of valuation completion; at the same time jointly responsible for damage caused by the intentional valuation of assets contributed as capital higher than the actual value."

3. Transfer of ownership of assets contributed as capital to the enterprise

3.1. Documents of contributed assets according to the provisions of the Enterprise Law

Applying Article 35 of the Enterprise Law 2020, guiding the transfer of ownership of assets contributed as capital as follows:

"Article 35. Transfer of ownership of assets contributed as capital

1. Members of limited liability companies, partnerships and shareholders of joint-stock companies must transfer ownership of assets contributed as capital to the companies according to the following provisions:

a) For assets with registered ownership or land use rights, the capital contributor must carry out procedures to transfer ownership of such property or land use rights to the company in accordance with law. The transfer of ownership and land use rights for assets contributed as capital no registration fee;

b) For assets without registration of ownership, the capital contribution must be made by handing over the contributed assets certified in writing, unless it is done through an account.

2. The minutes of delivery and receipt of assets contributed as capital must include the following principal details:

a) Name and address of the head office of the company;

b) Full name, contact address, number of legal papers of the individual, number of legal papers of the organization of the capital contributor;

c) Type of asset and number of asset units contributed as capital; the total value of assets contributed as capital and the proportion of the total value of such assets in the charter capital of the company;

d) Date of delivery and receipt; signature of the capital contributor or the authorized representative of the capital contributor and the legal representative of the company.

3. The capital contribution is only considered as complete payment when the lawful ownership of the assets contributed as capital has been transferred to the company.

4. The property used in the business activities of the private enterprise owner is not required to go through the procedures for transferring ownership rights to the enterprise.

5. The payment for all foreign investors' activities of buying, selling, transferring shares and contributed capital, receiving dividends and remitting profits abroad must be made through accounts in accordance with regulations. provisions of the law on foreign exchange management, except for the case of payment by assets and other non-cash forms.”

3.2. Documents of contributed assets according to tax law regulations

In case individuals, non-business organizations contribute capital with assets to limited liability companies or joint stock companies

Apply Clause 13, Article 14 of Circular 219/2013 / TT-BTC. In case a non-business individual or organization contributes capital with assets to a limited liability company or a joint-stock company, the documents applicable to the assets contributed as capital are:

• Capital contribution certificate
• Property delivery minutes.

If the contributed property is newly purchased, unused property and has a legal invoice accepted by the delivery and receipt council, the value of the contributed capital is determined according to the value stated on the invoice, including VAT. ; The party receiving the capital contribution may ｄｅｃｌａｒｅ and deduct VAT stated on the asset purchase invoice of the capital contributor.

Where a business organization contributes capital with assets to establish an enterprise

Apply Clause 7, Article 5 of Circular 219/2013 / TT-BTC. Assets contributed as capital to an enterprise must include:

• Business production capital contribution minutes
• Joint venture or association contract;
• The asset valuation record issued by the Capital Contribution Council of the capital contributors (or the valuation document of an organization with valuation function in accordance with law),
• Attach a set of records on the origin of the property.

4. Tax issues when contributing capital with assets

4.1. Value added tax

Application of Clause 7, Article 5 of Circular 219/2013 / TT-BTC: Business establishments are not required to ｄｅｃｌａｒｅ and pay value-added tax when Contribute capital with assets to establish a business.

The capital contribution must comply with the procedures specified at this Point as guided above.

Capital contribution by property is not required to be issued with an invoice under the guidance in Official Letter No. 3422 / TCT-CS dated September 06, 09 of the General Department of Taxation.

Official Letter 3422_TCT-CS Tax policy on assets contributed as capital

4.2. Value added tax

Differences for asset revaluation upon capital contribution are calculated into other income for corporate income tax calculation according to the following instructions:

14. Difference due to reassessment of assets according to the provisions of law for capital contribution, to transfer of assets upon division, separation, consolidation, merger or conversion of enterprises (except for the case of equitization, reorganization and renewal of enterprises with 100% state capital), specifically determined as follows:

a) Increase or decrease difference due to reassessment of assets is the difference between the revaluation value and the residual value of assets recorded in accounting books and lump-sum calculation to other income (for difference increase) or decrease other income (for reduced difference) in the tax period when determining taxable income of corporate income tax at the enterprise with revalued assets.

b) The difference increases or decreases due to reassessment of land use right value to: contribute capital (to which the enterprise receiving the value of land use rights shall be gradually distributed the land value into deductible expenses), transferred when dividing , splitting, consolidating, merging, transforming type of business, contributing capital to investment projects to build houses and infrastructure for sale, for lump-sum sale to other income (for increased difference) or deduction of revenue other income (for reduced difference) in the tax period when determining taxable income of enterprise income at enterprises having reassessed land use rights.

Particularly, the increased difference due to reassessment of land use right value to contribute capital to enterprises to form fixed assets for production and business, enterprises receiving the value of land use rights are not amortized and must not be amortized. to gradually allocate land value to deductible expenses, this difference shall be gradually calculated into other income of re-evaluated enterprises with land use rights for a period not exceeding 10 years starting from the year of value of rights. land use is contributed as capital. Enterprises must notify the number of years they will allocate to other income when submitting dossiers of CIT finalization of the year they start to ｄｅｃｌａｒｅ this income (the year when land use right value is reassessed capital contribution).

In case the enterprise continues to transfer contributed capital with the value of the land use right after contributing capital (including the case of transferring contributed capital 10 years before the time limit), the income from the transfer of contributed capital is equal to the value of land use rights to calculate and ｄｅｃｌａｒｅ and pay tax according to real estate transfer income.