Circular No. 156/2014/TT-BTC dated October 23, 2014 of the Ministry of Finance amending and supplementing a number of articles of the Ministry of Finance’s Circular No. 135/2008/TT-BTC of December 31, 2008, guiding the implementation of the Government’s Decree No. 69/2008/ND-CP of May 30, 2008, on incentive policies for the socialization of educational, vocational training, healthcare, cultural, sports and environmental activities

CIRCULAR

Amending and supplementing a number of articles of the Ministry of Finance’sCircular No. 135/2008/TT-BTC of December 31, 2008, guiding the implementation of the Government’s Decree No. 69/2008/ND-CP of May 30, 2008, on incentive policies for the socialization of educational, vocational training, healthcare, cultural, sports and environmental activities[1]

Pursuant to the November 29, 2013 Land Law;

Pursuant to the Government’s Decree No. 69/2008/ND-CP of May 30, 2008, on incentive policies for the socialization of educational, vocational training, healthcare, cultural, sports and environmental activities (below referred to as Decree No. 69/2008/ND-CP);

Pursuant to the Government’s Decree No. 59/2014/ND-CP of June 16, 2014, amending and supplementing a number of articles of the Government’s Decree No. 69/2008/ND-CP of May 30, 2008, on incentive policies for the socialization of educational, vocational training, healthcare, cultural, sports and environmental activities (below referred to as Decree No. 59/2014/ND-CP);

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Public Asset Management Department,

The Minister of Finance promulgates the Circular amending and supplementing a number of articles of the Ministry of Finance’s Circular No. 135/2008/TT-BTC of December 31, 2008, guiding the implementation of Decree No. 69/2008/ND-CP (below referred to as Circular No. 135/2008/TT-BTC).

Article 1.To amend and supplement a number of articles of Circular No. 135/2008/TT-BTC:

1. To amend and supplement Clause 1, Section I, on thescope of regulation and subjects of application in Article 1 of Decree No. 69/2008/ND-CP (which was amended and supplemented under Clause 1, Article 1 of Decree No. 59/2014/ND-CP), as follows:

“1. Scope of regulation:

Fields in which socialization is encouraged include education-training, vocational training, healthcare, culture, physical training and sports, environment, and judicial assessment.”

2. To amend and supplement Section IV, guidingthelease of houses and construction of physical foundations prescribed in Article 5 of Decree No. 69/2008/ND-CP (which was amended and supplemented under Clause 2, Article 1 of Decree No. 59/2014/ND-CP), as follows:

“IV. Lease of houses and construction of physical foundations under Clause 2, Article 1 of Decree No. 59/2014/ND-CP are specifically guided as follows:

1. Socialization establishments shall be prioritized to rent infrastructure facilities and works to beused for socialization activitiesto provide products and services in the fields in which socialization is encouraged.

Based on budget capacity, the need to encourage socialization, and existing houses and infrastructure facilities, ministries, ministerial-level agencies, government-attached agencies and other central agencies (below referred to as managing ministries and sectors), and People’s Committees of provinces and centrally run cities (below referred to as provincial-level People’s Committees) shall consider and decide topartially or completely build new infrastructure facilities or works to beused for socialization activities, or to leasefor a definite termexisting houses and infrastructure facilitiesof units under their managementto socialization establishments.

2. In case a socialization establishment pays the rental in advance for infrastructure facilities or works to be used for socialization activities under Point 2, Clause 2, Article 1 of Decree No. 59/2014/ND-CP, the advanced rental amount shall be converted into a number of years or months for which the rental for infrastructure facilities or works to be used for socialization activities has been paid. Such number of years or months shall be determined by the following formula:

Of which:

- n is the number of years or monthsfor which the rental for infrastructure facilities or works to be used for socialization activities has been paid. A period of between over 15 days and under one month shall be rounded to one month.

- The payable rental in a year for infrastructure facilities or works to beused for socialization activitiesshall be determined based on the area of and rental rate (VND/m²/year) for infrastructure facilities and works to beused for socialization activitieson the principle prescribed in Clause 3 of this Section.

After the expiration of the above time (n)for which the rental for infrastructure facilities or works to be used for socialization activities has been paid, a competent state agency shall re-determine the rental rate after reaching agreement with the socialization establishment under regulations effective at the time of re-determination.

3. Rental rates for infrastructure facilities orworks to be used for socialization activities

3.1. Depending on geographical areas and fields in which socialization is encouraged in localities as defined by provincial-level People’s Committees under Point 2, Clause 3, Article 1 of Decree No. 59/2014/ND-CP, after reaching agreement with socialization establishments and taking into account factors encouraged for socialization in localities, managing ministries or sectors (for centrally managed units) or provincial-level People’s Committees (for locally managed units) shall decide on specific rental rates for infrastructure facilities orworks to be used for socialization activitiesunder their management within the rental rate brackets specified at Point 3.2 of this Clause.

3.2. Rental rate brackets for infrastructure facilities orworks to be used for socialization activities

The rental rate for an infrastructure facility or a work to beused for socialization activitiesshall be set based on the rental rate for a land-attached asset and land rental (if any) after subtracting the exempted or reduced amount under regulations, specifically:

a/ Land rental:

Land rental shall be determined under the Government’s Decree No. 46/2014/ND-CP of May 15, 2014, on collection of land and water surface rentals (below referred to as Decree No. 46/2014/ND-CP), after subtracting the exempted or reduced amount at the level suitable to the geographical area or field in which socialization is encouraged in the locality promulgated by the provincial-level People’s Committee under Point 2, Clause 3, Article 1 of Decree No. 59/2014/ND-CP and guided in Clause 2, Section V (Clause 3, Article 1 of this Circular).

b/ Land-attached asset rental rate (excluding land rental):

- The highest rental rate shall be determined based on the market rental rate at the time of signing a lease contract;

- The lowest rental rate shall be determined on the principle of covering the cost for the creation of the leased asset and its maintenance cost but must not be lower than the rate specified at Item c of this Point.

Particularly, the lessor and lessee shall themselves reach agreement on and specify the maintenance cost in the lease contract. In case the lessee is bound by the lease contract to pay the maintenance cost, such cost shall not be included in the rental unit rate; in case the lessor is bound by the lease contract to pay the maintenance cost, such cost shall be included in the rental unit rate.

c/ The lowest rental rate is specifically guided as follows:

- For existing infrastructure facilities and works to be used for socialization activities

In case an asset has its residual book value of zero (0) but still meets quality requirements for use and, after being re-valuated, has its residual value larger than (>) zero (0), the rental rate shall be determined as follows:

In this case, if the lease period is shorter than the use period of the re-valuated asset after re-valuation, the lease period shall be regarded as equal (=) the use period of the re-valuated asset after re-valuation.

- For newly built infrastructure facilities and works to be used for socialization activities

+ In case the lessor builds a new infrastructure facility or work to be used for socialization activities for lease:

Of which, the value of facility or work is the finalized value approved by a competent state agency in accordance with law. In case finalization has not yet been made for the facility or work, the estimated value shall be used to calculate the lowest rental rate. In the course of implementation, if seeing it necessary to adjust the size of the facility or work to meet the use demand, which will result in an increase in the approved total estimate, the lessee and lessor shall reach agreement with each other and report such to a competent state agency for consideration and decision on the increase of the rental rate for such facility or work (such must be stated in the lease contract).

+ In case the lessee pays the rental in advance for building the whole of the facility or work for lease:

+ In case the lessee pays the rental in advance for building part of the facility or work for lease:

Of which, the value of the facility or work includes the finalized value approved by a competent state agency in accordance with law for the completed part of the facility or work plus (+) the estimated value approved by a competent state agency in accordance with law for the remaining part of the facility or work. In the course of implementation, if seeing it necessary to adjust the size of the facility or work to meet the use demand, which will result in an increase in the approved total estimate, the lessee and lessor shall reach agreement with each other and report such to a competent state agency for consideration and decision on the increase of the rental rate for such facility or work (such must be stated in the lease contract).

3.3. The time of calculating rentals for infrastructure facilities or works to be used for socialization activities shall be determined as follows:

a/ In case of lease of existing infrastructure facilities or works to be used for socialization activities, the time of rental calculation is the time of signing the lease contract.

b/ In case a socialization establishment pays in advance the rental for building infrastructure facilities or works to be used for socialization activities, the time of rental calculation is the time of handover of such facilities or works to the socialization establishment for use. The contract on and rental rate for infrastructure facilities or works to be used for socialization activities shall be performed and determined at the time the socialization establishment pays the rental in advance, on the principle specified in Clause 2, Section IV (Clause 2, Article 1 of this Circular).

3.4. For centrally managed units, managing ministries or sectors shall decide on rental rates for infrastructure facilities or works to be used for socialization activities after consulting provincial-level People’s Committees (of localities where infrastructure facilities or works for lease are located). In case such units hire a licensed price appraisal organization to determine rental rates for infrastructure facilities or works to be used for socialization activities, the hiring expense shall be paid or refunded from the proceeds from the lease of such facilities or works.

4. Dossier and procedures for enjoyment of incentives in the lease of infrastructure facilities or works to be used for socialization activities

4.1. Lease of infrastructure facilities or works to be used for socialization activities which are managed by managing ministries or sectors

a/ A socialization establishment shall send a dossier of request for lease of infrastructure facilities or works to be used for socialization activities to the unit assigned to manage such facilities or works. A dossier must comprise:

- A written request (original) for lease of infrastructure facilities or works to be used for socialization activities, stating the establishment’s commitment to satisfying the Prime Minister-decided socialization criteria, scale and standards under Article 2 of Decree No. 69/2008/ND-CP;

- The operation license (certified copy), granted by a competent state agency;

- Documents proving the establishment’s financial capacity to pay in advance the rental for infrastructure facilities or works to be used for socialization activities (in case the establishment pays the rental in advance).

b/ The unit assigned to manage infrastructure facilities or works to be used for socialization activities for lease shall reach agreement with the socialization establishment on principal contents of the lease contract, such as rental rate, lease term, advanced rental amount (if any) and other relevant contents as prescribed in Clause 2, Article 1 of Decree No. 59/2014/ND-CP and guided in Clauses 1, 2 and 3 of this Section, and other relevant regulations; and report such to the managing ministry or sector.

c/ The managing ministry or sector shall consider and decide on the lease of infrastructure facilities or works to be used for socialization activities after reaching written agreement with the Ministry of Finance.

4.2. Lease of infrastructure facilities or works to be used for socialization activities which are managed by provincial-level People’s Committees

a/ A socialization establishment shall send a dossier of request for lease of infrastructure facilities or works to be used for socialization activities to the unit assigned to manage such facilities or works. A dossier must comply with Item a, Point 4.1 of this Clause.

b/ The unit assigned to manage infrastructure facilities or works to be used for socialization activities for lease shall reach agreement with the socialization establishment on principal contents of the lease contract, such as rental rate, lease term, advanced rental amount (if any) and other relevant contents as prescribed in Clause 2, Article 1 of Decree No. 59/2014/ND-CP and guided in Clauses 1, 2 and 3 of this Section, and other relevant regulations; and report such to the managing department or sector for reaching written agreement with the same-level finance agency before the managing department or sector reports the lease of infrastructure facilities or works to be used for socialization activities to the provincial-level People’s Committee for consideration and decision.

5. Lessees of infrastructure facilities or works to be used for socialization activities must satisfy the Prime Minister-decided socialization criteria, scale and standards. After completing and commissioning a project within the time limit stated in the Prime Minister-decided list of types, criteria, scale and standards in each field in which socialization is encouraged, if the lessor detects through inspection the lessee’s dissatisfaction of the Prime Minister-decided socialization criteria, scale and standards, the lessor shall cease the lease contract prematurely in accordance with the civil law; the lessee shall pay compensations for damage (if any) while the lessor needs not refund to the lessee the amount paid in advance by the lessee for the remaining lease period (such must be stated in the lease contract signed by the two parties).

6. Line ministries and provincial-level People’s Committees shall facilitate the carrying out of administrative procedures, construction licensing and other relevant procedures for socialization establishments to build or repair works to be used for socialization activities under local master plans.

7. In case a unit uses the proceeds from the lease of infrastructure facilities or works used for socialization activities or the value of assets invested on land for capital contribution, joint venture or cooperation for implementation of socialization projects, it shall make a plan and have it approved by the managing ministry or sector after reaching agreement with the Ministry of Finance (for centrally managed units) or with the provincial-level People’s Committee (for locally managed units) in accordance with the law on state asset management and use and Point 5, Clause 2, Article 1 of Decree No. 59/2014/ND-CP, specifically as follows:

a/ In case the unit uses the proceeds from the lease of infrastructure facilities or works used for socialization activities for capital contribution, joint venture or cooperation to/with a socialization establishment, the rental under the lease contract shall be regarded as the unit’s capital amount contributed to this socialization establishment as a result of such capital contribution, joint venture or cooperation.

b/ In case the unit uses assets invested on land, business advantages, brand advantages, commercial advantages and other relevant advantages for capital contribution, joint venture or cooperation to set up a socialization establishment meeting the conditions specified in Article 2 of Decree No. 69/2008/ND-CP, the value of such assets and advantages shall be agreed by the two parties and stated in the capital contribution contract, joint venture contract or cooperation contract but must not be lower than the market value of these assets or advantages. In the course of valuation of assets and advantages for capital contribution, the unit may hire a licensed price appraisal organization to value assets and advantages.

8. The units defined in Clauses 1, 3, 4 and 7 of this Section are capable public non-business units that may use assets for lease or for capital contribution, joint venture or cooperation in accordance with regulations on state asset management and use and autonomy mechanisms applicable to public non-business units in specific fields, and documents amending and supplementing these regulations.”

3. To amend and supplement Section V on land allocation and lease prescribed in Article 6 of Decree No. 69/2008/ND-CP (which was amended and supplemented under Clause 3, Article 1 of Decree No. 59/2014/ND-CP), as follows:

“V. Land lease prescribed in Clause 3, Article 1 of Decree No. 59/2014/ND-CP is guided as follows:

1. Land rental incentives

A socialization establishment shall be leased by the State cleared land for construction of works to be used for socialization activities and enjoy land rental exemption for the entire lease term, except the case prescribed in Clause 2 of this Section.

The amount of compensation and ground clearance for land leased for construction of works to be used for socialization activities shall be handled under Clause 5 of this Section.

2. For socialization establishments that use land in urban centers, provincial-level People’s Committees shall base themselves on local practical conditions and the list of fields and geographical areas in which socialization is encouraged in localities to issue levels of land rental exemption or reduction in each field or geographical area after consulting the standing bodies of provincial-level People’s Councils on the following principles:

2.1. Highest level: Land rental exemption shall be granted for the whole project duration in the term of land lease by the State.

2.2. Lowest level: not lower than the incentive level applicable to incentive-eligible projects in accordance with the investment law under Article 19 of Decree No. 46/2014/ND-CP.

2.3. Projects with land lease term extended as permitted by a competent state agency are not eligible for land-related incentives under this Section.

2.4. Within six (6) months after the effective date of Decree No. 59/2014/ND-CP, based on the fields and geographical areas in which socialization is encouraged in localities, provincial-level People’s Committees shall promulgate and publicize regulations on land exemption and reduction for socialization establishments that use land in urban centers after consulting the standing bodies of provincial-level People’s Councils.

2.5. Once every three (3) years, provincial-level People’s Committees shall review, modify and supplement lists of fields and geographical areas in which socialization is encouraged in localities as appropriate, for use as a basis for amendment and supplementation of regulations on land exemption and reduction for socialization establishments that use land in urban centers; then promulgate and publicize these regulations after consulting the standing bodies of provincial-level People’s Councils.

After review, if seeing that a socialization establishment no longer satisfies the conditions for enjoying incentives according to the list of fields and geographical areas in which socialization is encouraged because such list is modified and supplemented by the provincial-level People’s Committee, but still operates under the conditions and criteria at the time the provincial-level People’s Committee approves the land rental incentives the establishment is currently enjoying, the provincial-level People’s Committee may still permit the establishment to enjoy the approved incentives for the remaining duration of projects.

3. The amount paid by an investor for acquiring land use rights for implementation of investment projects under Point 3, Clause 3, Article 1 of Decree No. 59/2014/ND-CP shall be determined based on the land price depending on the use purpose of the acquired land at the time a competent state agency permits the change of land use purpose, but must not exceed the compensation and support amount in case of land recovery by the State in accordance with law. Such paid amount shall be:

a/ Included in the project’s investment expenses, in case the investor is eligible for land rental exemption for the whole project duration;

b/ Cleared against (-) the payable land rental, in case the investor chooses one-off rental payment for the entire lease period and is required to pay the whole or part of land rental, provided that the cleared amount must not exceed the payable rental. The investor may include in the project’s investment expenses the positive difference (if any) between the amount for acquiring land use rights and the amount cleared against the payable land rental in accordance with law;

c/ Converted into a period for which land rental has been paid, in case the investor chooses annual rental payment and is required to pay land rental under regulations; the converted period must not exceed the period for which land rental must be paid under the project. The amount not yet converted (if any) shall be included in the project’s investment expenses in accordance with law.

The determination of land prices based on the use purposes before and after the change of land use purpose for inclusion of the land rental and amount paid by the investor for acquiring land use rights in the payable land rental must comply with Decree No. 46/2014/ND-CP and guiding documents.

4. Land rental exemption or reduction under Points 1, 2 and 4, Clause 3, Article 1 of Decree No. 59/2014/ND-CP is prescribed as follows:

4.1. A socialization establishment that has a socialization project approved by a competent state agency in accordance with law and is leased land by the State for the implementation of such project which satisfies the Prime Minister-decided socialization types, scale and standards may enjoy land-related incentives under Decree No. 59/2014/ND-CP from the time a competent state agency issues the land lease decision or decision permitting the change of land use purpose. The tax agency shall issue a decision on land rental exemption or reduction under Decree No. 59/2014/ND-CP and this Circular at the time of issuance of the land lease decision or decision permitting the change of land use purpose.

4.2. After the project is completed and commissioned, if a competent state agency detects through inspection the socialization establishment’s dissatisfaction of the Prime Minister-decided socialization criteria, scale and standards as committed, such establishment shall pay the exempted or reduced land rental according to the land policy and price applicable at the time it enjoys land-related incentives under Point 4.1 of this Clause and pay a late-payment interest on land rental for the period for which the establishment already enjoys rental exemption or reduction, which is calculated based on the exempted or reduced land rental in accordance with the law on tax administration.

4.3. After the project is completed and commissioned, if a competent state agency detects through inspection the socialization establishment’s dissatisfaction of the Prime Minister-decided list of socialization types, scale and standards because such list is modified, supplemented or replaced, or during the establishment’s operation, the administrative boundaries are changed or non-urban areas are upgraded into urban areas in the project area, but the establishment still meets the prescribed criteria and conditions at the time the competent authority approves land rental incentives, such establishment may further enjoy the approved incentives.

4.4. Based on the local practical conditions and types of socialization projects, provincial-level People’s Committees shall assign managing tax agencies to collaborate with specialized management agencies in charge of the fields in which socialization is encouraged and related agencies in examining and identifying the socialization establishments’ satisfaction of the Prime Minister-decided socialization criteria, scale and standards under Article 2 of Decree No. 69/2008/ND-CP.

4.5. Examination and identification under Points 4.2, 4.3 and 4.4 of this Clause shall be conducted as follows:

a/ After completing and commissioning a project within the time limit specified in the Prime Minister-issued list of types, criteria, scale and standards in each field in which socialization is encouraged, the investor shall send a written notice of the project completion and commissioning, enclosed with relevant dossiers and documents, to his/her/its managing tax agency for examining his/her/its eligibility for land rental exemption or reduction;

b/ Within 30 days after receiving the investor’s notice, the managing tax agency shall collaborate with the specialized management agency and related agencies in examining and identifying the socialization establishment’s satisfaction of socialization criteria, scale and standards prescribed by the Prime Minister. In case the socialization establishment fails to satisfy the prescribed criteria, scale and standards, the tax agency shall report such to the provincial-level People’s Committee for consideration and handling under Point 4.2 or 4.3 of this Clause; in case the socialization establishment satisfies the prescribed criteria, scale and standards, the tax agency shall give certification and issue a notice to the establishment and additionally include such notice in the land rental exemption or reduction dossier.

4.6. Dossier, order and procedures for land rental exemption or reduction are specified as follows:

a/ Dossier for land rental exemption or reduction

- The dossier for land rental exemption or reduction must comply with the law on tax administration;

- The written commitment to satisfying the Prime Minister-decided socialization criteria, scale and standards as prescribed in Article 2 of Decree No. 69/2008/ND-CP.

b/ The order, procedures and competence to decide on land rental exemption or reduction must comply with Article 21 of Decree No. 46/2014/ND-CP and Article 15 of the Ministry of Finance’s Circular No. 77/2014/TT-BTC of June 16, 2014, guiding the implementation of Decree No. 46/2014/ND-CP (below referred to as Circular No. 77/2014/TT-BTC).

The land rental exemption or reduction decision must state the reason for exemption or reduction; land lease term; exemption or reduction duration and exempted or reduced land rental amount; and must additionally state: “In case the land lessee has to refund to the state budget the exempted or reduced land rental amount under Item b, Point 4, Clause 3, Article 1 of Decree No. 59/2014/ND-CP or improperly uses the land but does not fall into the case subject to land recovery under the land law, he/she/it shall pay the exempted or reduced land rental amount according to the land policy and price applicable at the time he/she/it enjoys incentives (for the case specified at Item b, Point 4, Clause 3, Article 1 of Decree No. 59/2014/ND-CP), the land rental in the period he/she improperly uses the land according to the land policy and price applicable at the time of issuance of the land lease decision, and a late-payment interest on the exempted or reduced land rental amount or the payable additional land rental amount in accordance with the law on tax administration.”

5. The compensation and ground clearance amount paid in advance by the State or voluntarily paid in advance by a socialization establishment shall be handled under Point 5, Clause 3, Article 1 of Decree No. 59/2014/ND-CP and Article 6 of Circular No. 77/2014/TT-BTC.

6. In case a socialization establishment that is leased land by the State with one-off rental payment for the entire lease term is exempted from land rental for the entire lease term or exempted from land rental for a number of years but wishes to pay land rental for the remaining land lease period without enjoying incentives under Point 6, Clause 3, Article 1 of Decree No. 59/2014/ND-CP, the payable land rental shall be determined according to the land policy and price applicable at the time such payment is approved by a competent state agency. The socialization establishment has the right to rent land for the remaining land use period corresponding to the form of land lease with one-off rental payment for the entire lease term in accordance with the land law.

In this case, the remaining compensation and ground clearance expense (if any) paid in advance or remitted into the state budget by the investor under a plan approved by a competent state agency (not yet distributed into the project’s investment expenses by the arithmetic average method) shall be cleared against the payable land rental but must not exceed the payable land rental amount for the remaining land lease period of the investment project; the value of land use rights shall be included in the value of assets of the investment project and the investor has the rights and obligations like economic organizations that are leased land by the State for the remaining land use period in accordance with the land law.

7. In case two or more investors jointly choose the same location for implementation of a socialization project, the investor that best satisfies the criteria on scale, quality and efficiency in accordance with the bidding and land laws shall be selected.

8. A socialization establishment that uses lawfully leased land shall be granted a certificate of land use rights and ownership of houses and other land-attached assets (below referred to as certificate). The order and procedures for lease of land and grant of certificates must comply with the land law.

9. Socialization establishments shall use land for proper purposes under planning and the land law. Upon the expiration of the land lease term, a socialization establishment that no longer wishes to use land or is dissolved or moves to another place shall return the leased land to the State. A socialization establishment that improperly uses land shall be handled as follows:

a/ In case a competent state agency detects that the socialization establishment uses land improperly for the first time, such establishment shall be sanctioned for land-related administrative violations and shall remit into the state budget:

- The land rental amount in the period it uses land improperly, calculated according to the land policy and price applicable at the time of issuance of the land lease decision.

- A late-payment interest on the land rental amount in the period it uses land improperly in accordance with the law on tax administration.

b/ After being sanctioned for land-related administrative violations, if the socialization establishment continues using land improperly, the State shall recover land and shall neither refund the paid land rental amount for the remaining land lease period (if any) nor pay compensation for the value of assets of the project attached to the recovered land.

10. Inclusion of the value of land use rights in the value of assets of investment projects and land-related rights of socialization establishments:

a/ When being leased land by the State with one-off rental payment for the entire lease term and exempted from land rental for the whole project duration or when being leased land with annual rental payment, a socialization establishment may not include the value of land use rights in the value of assets of the investment project and may neither exchange, transfer, donate or lease land use rights nor inherit, mortgage, guarantee or contribute leased land use rights as capital.

b/ When being leased land by the State with one-off rental payment for the entire lease term and exempted from land rental for a number of years, a socialization establishment may include the value of land use rights based on the paid land rental amount in the value of assets of the investment project, and may transfer, donate or lease the right to rent land; or inherit, mortgage or contribute leased land use rights as capital the value of land use rights corresponding to the payable land rental amount for the period for which the establishment has to pay land rental. The socialization establishment may exercise the above rights from the time it remits land rental into the state budget.

11. Transfer of socialization projects:

a/ During the implementation of a project, if, for an objective reason, a socialization establishment cannot continue implementing the project on the land leased by the State, it may transfer such project in accordance with the real estate business and land laws if such transfer is approved in writing by a competent state agency. The transferee shall commit to continuing to implement the project strictly according to the objectives and land use purposes of the project and may continue to enjoy land-related incentives applicable to the transfer or under the socialization policy for the remaining land lease period, counting from the date of transfer.

b/ The two parties shall agree on the value of the transferred project, covering:

- Land-attached assets, in case the project is eligible for land rental exemption or subject to annual rental payment;

- Land-attached assets and the whole value of land use rights, in case the project is subject to one-off rental payment for the entire lease term (not eligible for land rental exemption or reduction);

- Land-attached assets and the partial value of land use rights corresponding to the land rental amount already remitted into the state budget, in case the project is eligible for one-off rental payment for the entire lease term.

c/ Land lease procedures between the old and new investors upon transfer of a socialization project must comply with the land law.”

4. To amend Point e, Clause 5, Section XIII, on responsibilities of provincial-level People’s Committees defined in Article 18 of Decree No. 69/2008/ND-CP (which was amended and supplemented under Clause 4, Article 1 of Decree No. 59/2014/ND-CP), as follows:

“e/ Issue specific levels of land rental exemption and reduction in each field and geographical area in which socialization is encouraged in their localities after consulting the standing bodies of provincial-level People’s Councils.

Direct provincial-level Tax Departments to collaborate with provincial-level Planning and Investment Departments, Finance Departments, Natural Resources and Environment and related departments specialized in socialization activities in supervising the implementation of socialization projects, based on the conditions and criteria approved by a competent agency. If detecting socialization establishments’ dissatisfaction of the approved conditions and criteria, report such to provincial-level People’s Committees for consideration and decision to abolish the incentives in accordance with law.”

5. To amend and supplement a number of provisions in Section XIV, on organization of implementation, as follows:

“XIV. Organization of implementation

1. In case socialization establishments that are allocated land, leased land or handed cleared residential land or urban land by the State between the effective date of Decree No. 69/2008/ND-CP and the effective date of Decree No. 59/2014/ND-CP, and satisfy the Prime Minister-decided conditions for enjoyment of incentive policies for socialization development as prescribed in Article 2 of Decree No. 69/2008/ND-CP, but provincial-level People’s Committees have not yet issued regulations on land rental exemption and reduction under Clause 1, Article 6 of Decree No. 69/2008/ND-CP, so state agencies cannot determine payable land rentals for projects, these establishments shall enjoy land rental exemption or reduction levels prescribed in Decree No. 59/2014/ND-CP as follows:

a/ Socialization establishments that use residential land in rural areas may enjoy land rental exemption or reduction levels prescribed at Point 1, Clause 3, Article 1 of Decree No. 59/2014/ND-CP.

b/ Socialization establishments that use urban land may enjoy land rental exemption or reduction levels prescribed at Point 2, Clause 3, Article 1 of Decree No. 59/2014/ND-CP.

c/ Socialization establishments that had been allocated land by the State but are eligible for land rental exemption or reduction and had paid the land rental amount not eligible for reduction (if any) under regulations on socialization promotion before the effective date of Decree No. 59/2014/ND-CP may continue to use the land for the remaining land lease period without having to change to land lease; if changing to land lease, they are not required to pay land rental for the period for which they have been allocated land. After the expiration of the land use term, if such term is extended by a competent state agency after July 1, 2014, these establishments shall change to land lease under regulations on land rental collection at the time of extension.

2. Socialization establishments that are allocated or leased cleared land by the State for building socialization works from the effective date of Decree No. 69/2008/ND-CP to before the effective date of Decree No. 59/2014/ND-CP and are not required by the State to pay compensation and ground clearance amounts need not pay such amounts to the State.

3. Since July 1, 2014, the lease of land and handling of compensation and ground clearance amounts for socialization projects must comply with the 2013 Land Law and Point 5, Clause 3, Article 1 of Decree No. 59/2014/ND-CP, and shall be guided as follows:

a/ Non-public establishments engaged in the fields specified in Article 1 of this Circular that are established under the Government’s Decree No. 73/1999/ND-CP of August 19, 1999, and Decree No. 53/2006/ND-CP of May 25, 2006, and fully meet the conditions for enjoying incentive policies for socialization development as prescribed in this Circular shall make registration with licensing agencies and managing tax agencies in order to enjoy the incentives guided in this Circular;

b/ Non-public establishments engaged in the fields specified in Article 1 of this Circular that are established under the Government’s Decree No. 73/1999/ND-CP of August 19, 1999, and Decree No. 53/2006/ND-CP of May 25, 2006, and do not fully meet the conditions for enjoying incentive policies for socialization development as prescribed in this Circular shall cease to enjoy such incentives;

c/ Organizations and individuals established and operating under the Enterprise Law that have independent projects in the fields in which socialization is encouraged on the Prime Minister-prescribed list shall make registration with licensing agencies and managing tax agencies in order to be considered for enjoying the incentives guided in this Circular.”

Article 2.Effect

1. This Circular takes effect on December 15, 2014.

2. Cases that arise since August 1, 2014 must comply with Decree No. 59/2014/ND-CP and this Circular.

3. To annul Clause 3, Section III, and Point b, Clause 5, Section XIII, of Circular No. 135/2008/TT-BTC.

Any problems or difficulties arising in the course of implementation should be promptly reported to the Ministry of Finance for consideration and settlement.-

For the Minister of Finance
Deputy Minister
NGUYEN HUU CHI