Tax incentive policies for social housing developers should be made consistent to encourage investment (Photo: chinhphu.vn)Hanoi (VNS/VNA) – Tax incentives for developers ofsocial housing projects for lease should be made clear and consistent toencourage private investment in the segment, according to the HCM City RealEstate Association.
The association said that there were inconsistencies amongexisting legal documents, resulting in a hesitancy to invest because it couldtake investors up to 20 years to recoup their money.
According to Decree 100/2015 about social housing developmentand management, a reduction of 70 percent in value added tax and corporateincome tax was being offered to developers of social housing projects for lease.
However, according to the Law on Value Added Tax, the maximumreduction is only 20 percent.
For example, Le Thanh Company was charged 5 percent in valueadded tax and 10 percent for corporate income tax for Le Thanh An Lac, a socialhousing project for lease in Binh Tan district, HCM City.
The General Department of Taxation said the fees were basedon the Law on Value Added Tax 2016 and the Law on Corporate Income Tax 2013,according to the association.
These inconsistencies had resulted in many developers missingout on the 70 percent break, the association said.
According to association President Le Hoang Chau, the taxbreak of 70 percent should be included in the laws on value added tax andcorporate income tax when they are next amended.
Châu said that clearer tax incentives would encourage privatedevelopers to invest in social housing projects for lease.
Currenty, developers of social housing projects for saleenjoy a reduction of 50 percent in value added tax and corporate income tax./.
VNA
