How many stars to contribute as charter capital to eligible for value-added tax refund?

How much charter capital must be contributed to qualify for a value-added tax refund? Can the company contribute capital in cash?

1. What is VAT? What is charter capital?

According to Article 2 of the 2008 Value Added Tax Law, VAT is defined as follows:

“Value added tax is a tax calculated on the added value of goods and services arising in the process from production, circulation to consumption.”

In addition to the name value added tax, there is also a way to Another common name is VAT.

According to Clause 34, Article 4 of the Law on Enterprises 2020, the definition of charter capital is as follows:

“Article 4. Explanation of terms

In this Law, the following terms are understood as follows:

…

34. charter capital is the total The value of assets contributed or committed to be contributed by company members and owners when establishing a limited liability company or partnership; is the total par value of shares sold or registered to buy when establishing a joint stock company.”

2. How much charter capital must be contributed to be eligible for VAT refund?

First, according to Clause 3, Article 1 of Circular 130/2016/TT-BTC, there are provisions as follows:

“Article 1. Amending and supplementing a number of articles 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 and Decree No. 209/2013/ND-CP dated December 18, 2013 of the Government detailing and guiding the implementation of a number of articles of the Law on Value Added Tax (amended and supplemented according to Circular No. 119/2014/TT-BTC dated August 25, 2014, Circular No. 151/2014/TT-BTC dated October 10, 2014 and Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance) as follows:

…

3. Amending and supplementing Article 18 as follows:

…

3. VAT refund for investment projects

c) Business establishments are not entitled to a value-added tax refund but can carry forward the undeducted tax amount of the investment project according to the law on investment to the next period in the following cases:

c.1) The investment project of the business establishment does not contribute the full amount of charter capital as registered according to the provisions of law. Documents requesting tax refund of investment projects are submitted from the date July 1, 2016 of a business establishment, but by the date of filing the application but has not contributed the full amount of charter capital as registered according to the provisions of law, tax refund will not be granted.”

Accordingly, you can open the Business Registration Certificate to see how much the company’s charter capital is. From there, you can base on that to contribute capital to qualify for VAT refund without having to rely on capital to implement the project.

3. Can a company contribute charter capital in cash?

According to the provisions of Article 3 of Circular 09/2015/TT-BTC guiding financial transactions of enterprises, the form of payment in capital contribution transactions is regulated as follows:

“Article 3. Form of payment in capital contribution transactions and the purchase, sale and transfer of capital contributions to other enterprises

1. Enterprises do not use cash (paper money, coins issued by the State Bank) to pay when making capital contribution transactions and buying, selling, and transferring capital contributions to other enterprises.

2. When making capital contribution transactions and buying, selling, and transferring capital contributions to other enterprises, businesses use the following forms:

a) Payment by Check;

b) Payment by payment order – money transfer;

c) Other appropriate forms of non-cash payment according to current regulations.

3. Enterprises when making capital contribution transactions and buying, selling, and transferring capital contributions to other enterprises using assets (not in assets). money) shall comply with the provisions of law on enterprises.”

Accordingly, if a business contributes capital to establish another business, it must contribute through the above forms and cannot contribute in cash. If an individual contributes capital to establish a company, it is entirely possible to contribute in cash. The party receiving the capital contribution can issue a cash receipt.