Circular No. 216/2012/TT-BTC dated December 10, 2012 of the Ministry of Finance guiding the determination of rents for rubber tree-growing land

THE MINISTRY OF FINANCE

Circular No. 216/2012/TT-BTC of December 10, 2012, guiding the determination of rents for rubber tree-growing land

Pursuant to the November 26, 2003 Land Law;

Pursuant to the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents;

Pursuant to the Government’s Decree No. 69/2009/ND-CP of August 13, 2009, additionally providing the land use planning, land prices, land recovery, compensations, supports and resettlement;

Pursuant to the Government’s Decree No. 121/2010/ND-CP of December 30, 2010, amending and supplementing a number of articles of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the director of the Department of Public Assets Management;

The Minister of Finance promulgates the Circular to guide the determination of rents for rubber tree-growing land.

Article 1. Scope and subjects of application

1. Scope of application: This Circular guides the determination of rents for rubber tree-growing land, covering determination of land rents; land rent exemption and reduction; order and procedures for collection and payment of land rents.

2. Subjects of application:

a/ Economic organizations, households and individuals that rent land for growing rubber trees;

b/ Overseas Vietnamese and foreign organizations and individuals (including economic organizations being joint ventures between domestic investors and foreign investors) that rent land for growing rubber trees;

c/ State agencies with the function of land administration.

Article 2. Determination of land rents

1. Determination of land rents in case of renting land with annual payment of land rents (applicable to the subjects specified at Points a and b, Clause 2, Article 1 of this Circular).

Land rent for a year equals (=) the land price for land rent calculation multiplied (x) by the percentage (%) for land rent rate calculation.

a/ The percentage (%) for land rent rate calculation is 0.75% of the land price for land rent calculation and decided by the provincial-level People’s Committee.

b/ The land price for land rent calculation.

The land price for calculating rents for rubber tree-growing land is the price of land for growing perennial trees determined by the income method for each area or zone as decided by the provincial-level People’s Committee on the basis of net income from rubber tree growing in the locality. In case a project rents land in many districts, a common land price may be determined for the whole project.

2. Determination of land rents in case of renting land with lump-sum payment of land rents for the whole rent term (applicable to the subjects specified at Point b, Clause 2, Article 1 of this Circular).

The land rent paid in lump sum for the whole land rent term equals the land use levy amount payable in the case of land allocation with collection of land use levy for the same land use purpose and with the same land use duration.

The land rent term for which the rent is paid in lump sum is the land rent duration permitted by a competent authority (under a land lease decision or a land rent contract). In case of land rent exemption as provided by law, the term for which the land rent is paid in lump sum is the land rent duration permitted by a competent authority minus the duration of land rent exemption.

Article 3. Principles of adjustment of land rents

1. In case the State leases land and collects land rents annually, the land rent for each project shall be kept stable for 5 years. Upon the expiration of this period, if the land price set by the provincial-level People’s Committee fluctuates by under 20% compared to that for calculation of the land rent at the preceding time of determination of the rent rate, the land price table set by the provincial-level People’s Committee at the time of adjustment of the rent rate may apply for determining the land rent for the next period (5 years), which, however, must not be lower than the rent of the preceding period.

2. In case the land price set by the provincial-level People’s Committee fluctuates by 20% or more compared to that for calculation of the land rent at the preceding time of determination of the rent rate, the provincial-level Finance Department shall determine the land price adjustment coefficient as guided by the Ministry of Finance in Circular No. 94/2011/TT-BTC of June 29, 2011, amending and supplementing Circular No. 120/2005/TT-BTC of December 30, 2005, guiding the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents, then submit it to the provincial-level People’s Committee for decision and use as a basis for the provincial-level Finance Department (for land-renting economic organizations, overseas Vietnamese and foreign organizations and individuals) or the district-level People’s Committee (for land-renting households and individuals) to decide on the adjustment of the rent of the next period (5 years).

3. Upon the expiration of this period (5 years), if the land rent cannot be adjusted yet for an objective reason, land-renting organizations and individuals may continue to apply the land rent of the preceding period for temporarily paying the land rent for such period. Whenever a competent agency adjusts the land rent, the adjusted land rent must be fully paid.

Article 4. Land rent in case of auction of the rights to use rented land

1. In case of auction of the rights to use land rented with annual rent payment, the land rent is the auction-winning bid. The reserve price of the auction must be determined under Clause 2, Article 3 of the Ministry of Finance’s Circular No. 48/2012/TT-BTC of March 16, 2012, guiding the determination of reserve prices and financial regime applicable to the auction of land use rights for land allocation with the collection of land use levy or for land lease, and amending and supplementing documents (if any).

The land rent in this case is kept stable for 10 years. Upon the expiration of this period, the land price must be adjusted for calculation of the land rent on the following principle:

a/ In case the land price set and announced by the provincial-level People’s Committee at the time of adjustment fluctuates by under 20% compared to the auction-winning land price or the land price for calculation of the rent of the preceding period, the land price table set by the provincial-level People’s Committee at the time of adjustment of the rent may apply for determining the rent for the next period (10 years) on the principle that the land rent of such period does not exceed by 30% the auction-winning land rent or the land rent of the preceding period.

b/ In case the land price set and announced by the provincial-level People’s Committee at the time of adjustment fluctuates by 20% or more compared to the auction-winning land price or the land price for calculation of the rent of the preceding period, the provincial-level Finance Department shall determine the land price adjustment coefficient as guided by the Ministry of Finance in Circular No. 94/2011/TT-BTC of June 29, 2011, then submit it to the provincial-level People’s Committee for decision and use as a basis for the provincial-level Finance Department (for land-renting economic organizations, overseas Vietnamese and foreign organizations and individuals) or the district-level People’s Committee (for land-renting households and individuals) to decide on the adjustment of the rent of the next period (10 years) on the principle that the land rent of such period does not exceed by 30% the auction-winning land rent or the land rent of the preceding period.

2. In case of auction of the rights to use land rented with lump-sum rent payment for the whole rent term, the land rent is the auction-winning bid. The payable rent amount equals the auction-winning bid (auction-winning price at which the land is allocated) multiplied (x) by the rented land area. The payable land rent amount corresponds to the payable land use levy in the case of auction of the rights to use land allocated with land use levy collection.

The reserve price for auction of the rights to use rented land is determined under the guidance in Clause 2, Article 3 of the Ministry of Finance’s Circular No. 48/2012/TT-BTC of March 16, 2012, and amending and supplementing documents (if any).

Article 5. Deduction of compensations for ground clearance

1. In case land renters have advanced compensations and supports for resettlement and funds for organization of compensation for ground clearance in accordance with the Government’s Decree No. 197/2004/ND-CP of December 3, 2004, on compensations and supports for resettlement upon land recovery by the State, Decree No. 84/2007/ND-CP of May 25, 2007, additionally providing the grant of land use rights certificate, recovery of land, exercise of land use rights, order and procedures for payment of compensations and supports for resettlement upon land recovery by the State and settlement of land-related complaints (before the effective date of the Government’s Decree No. 69/2009/ND-CP of August 13, 2009, additionally providing land use planning, land prices, land recovery, compensations, supports and resettlement), they will have such compensations and supports deducted from their payable land rents according to approved plans, with the deductions not exceeding the payable land rents.

2. In case land renters have advanced compensations and supports for resettlement and funds for organization of compensation for ground clearance in accordance with the Government’s Decree No. 69/2009/ND-CP of August 13, 2009, they will have such advanced amounts refunded by the state budget by deducting the whole advanced amounts from the payable land rents according to approved plans, with the deductions not exceeding the payable land rents.

3. In case land renters who are currently leased land by the State and pay annual land rents have deducted compensations for ground clearance according to approved plans under the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents, they may continue to deduct compensations for ground clearance under such Decree (deductions are allocated to annually payable land rents).

4. From March 1, 2011 (the effective date of the Government’s Decree No. 121/2010/ND-CP of December 30, 2010, amending and supplementing a number of articles of Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents), persons who are leased land by the State and pay annual land rents and make compensations for ground clearance shall deduct compensations for ground clearance in accordance with Clause 5, Article 2 of Decree No. 121/2010/ND-CP and Article 3 of the Ministry of Finance’s Circular No. 94/2011/TT-BTC of June 29, 2011, specifically as follows:

Money amounts advanced (if any) as compensations and supports for resettlement and funds for organization of compensation and ground clearance according to approved plans which may be deducted from payable land rents may be converted into a period of time, for which the land rent must be paid as determined for the first period and annual land rents have been fully paid.

Article 6. Levels and principles of land rent exemption and reduction

1. Persons who rent land for growing rubber trees are eligible for land rent exemption or reduction in accordance with the following provisions:

a/ Land rent exemption and reduction as provided in Articles 14 and 15 of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005 (amended and supplemented in Clause 10, Article 2 of the Government’s Decree No. 121/2010/ND-CP of December 30, 2010);

b/ Policies to encourage enterprises to invest in agriculture and rural areas provided in the Government’s Decree No. 61/2010/ND-CP of June 4, 2010, providing policies to encourage enterprises to invest in agriculture and rural areas, and amending and supplementing documents (if any);

c/ Policies on employment of ethnic minority people lawfully residing in the Central Highlands provinces provided in the Prime Minister’s Decision No. 75/2010/QD-TTg of November 29, 2010, on supports for organizations and units employing ethnic minority people lawfully residing in the Central Highlands provinces, and amending and supplementing documents (if any).

2. The principles of land rent exemption and reduction are prescribed in Article 13 of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land and water surface rents (amended and supplemented in Clause 9, Article 2 of the Government’s Decree No. 121/2010/ND-CP of December 30, 2010) and guided in Section VI of the Ministry of Finance’s Circular No. 141/2007/TT-BTC of December 30, 2007, amending and supplementing Circular No. 120/2005/TT-BTC of December 30, 2005, guiding the Government’s Decree No. 142/2005/ND-CP.

Article 7. Order and procedures for and competence to decide on land rent exemption and reduction

1. Order, procedures and dossiers for land rent exemption and reduction

a/ The order and procedures for land rent exemption and reduction comply with Tax Administration Law No. 78/2006/QH11 of November 29, 2006, of the National Assembly of the Socialist Republic of Vietnam, and amendments and supplements (if any) to Tax Administration Law, the Ministry of Finance’s Circular No. 28/2011/TT-BTC of February 28, 2011, guiding a number of articles of the Tax Administration Law, and guiding the implementation of the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, and Decree No. 106/2010/ND-CP of October 28, 2010, and documents (if any) amending and supplementing this Circular.

b/ A dossier for land rent exemption or reduction complies with Clause 6, Article 39 of the Ministry of Finance’s Circular No. 28/2011/TT-BTC of February 28, 2011, and comprises:

- An application (the original) for land rent exemption or reduction, specifying the rented land area, rent term, exemption or reduction reason(s) and duration.

- The land rent declaration (the original), made according to a set form.

- A competent agency’s decision on land lease and decision on the shift from land allocation without land use levy collection to land lease; and the land rent contract (certified copy).

- The investment certificate (investment license) or business registration certificate (certified copy).

- The investment project approved by a competent authority (except for subjects other than investment projects) (certified copy).

c/ In addition to the above documents, for some cases of land rent exemption and reduction, the following specific documents also are required:

- For rent exemption for rubber tree-growing land for the period of fundamental construction of rubber tree plantations:

+ A project approved by a competent state agency in accordance with the investment law, clearly stating the period of fundamental construction of rubber tree plantations. Particularly for land rented by households or individuals for growing rubber trees, a project approved by the provincial-level People’s Committee or a functional agency authorized by the provincial-level People’s Committee (certified copy).

+ A written certification (the original) of the actual land area under rubber trees is each year during the period of fundamental construction, which is made under regulations of the provincial-level People’s Committee.

- For rent exemption for rubber tree-growing land in accordance with the investment law: Documents on investment incentives, including land rent incentive, such as investment incentive certificate, investment license and investment certificate granted by competent state agencies (certified copies).

- For rent exemption for rubber tree-growing land in accordance with the Government’s Decree No. 61/2010/ND-CP of June 4, 2010: Investment incentive certificate (the original) granted by the provincial-level People’s Committee for an agricultural project eligible for special investment incentives, investment incentives or investment promotion provided in the Ministry of Planning and Investment’s Circular No. 06/2011/TT-BKHDT of April 6, 2011, guiding the dossier, order and procedures for certification of additional investment incentives and supports for enterprises investing in agriculture and rural areas under the Government’s Decree No. 61/2010/ND-CP of June 4, 2010.

- For rent exemption for rubber tree-growing land in accordance with the Prime Minister’s Decision No. 75/2010/QD-TTg of November 29, 2010, a land rent exemption or reduction dossier complies with the Ministry of Finance’s Circular No. 203/2011/TT-BTC of December 30, 2011, guiding provision of supports for organizations and units employing ethnic minority people lawfully residing in the Central Highlands provinces, and documents (if any) amending and supplementing this Circular.

- For land rent exemption or reduction decided by the Prime Minister at the request of a minister, the head of a ministerial-level agency or government-attached agency or the chairperson of a provincial-level People’s Committee, the dossier must have the Prime Minister’s decision (certified copy).

- For land rent reduction for victims of natural disasters, fires or force majeure events:

+ Figures of the actual yield of the preceding year in the unit’s financial finalization statement (certified copy).

+ A written record of the situation and level of damage caused by a natural disaster, fire or force majeure event, certified by the commune-level People’s Committee or a related state management agency (the original).

d/ Submission of land rent exemption or reduction dossiers

Land renters shall submit their land rent exemption or reduction dossiers at the same time with the declaration and payment of land rents at land use rights registry offices or local natural resources and environment agencies. In case the land rent exemption or reduction is requested not simultaneously with the declaration and payment of land rents, the land rent exemption or reduction dossier shall be submitted to the tax agency directly managing the collection.

2. Competence to decide on land rent exemption and reduction

The tax agency shall base itself on the above exemption or reduction dossier enclosed with a cadastral dossier (if land rent exemption or reduction is requested simultaneously with declaration and payment of the rent) or the rent exemption or reduction dossier (if land rent exemption or reduction is requested not simultaneously with the declaration and payment of rent) to determine the payable land rent and the exempted or reduced land rent.

Directors of provincial-level Tax Departments may decide on land or water surface rent exemption or reduction for land-renting economic organizations, foreign organizations and individuals, and overseas Vietnamese.

Directors of district-level Tax Departments may decide on land or water surface rent exemption or reduction for land-renting households and individuals.

Particularly for land rent exemption during the period of fundamental construction of rubber tree plantations: Tax agencies shall give temporary land rent exemption for the years of fundamental construction (except the year of completion); upon completion of the fundamental construction of rubber tree plantations, the tax agency shall issue an official decision on land rent exemption for such period.

Article 8. Order of determination, collection and payment of land rents

The order of determination, collection and payment of land rents complies with Articles 17 and 19 of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005; Clause 11, Article 2 of the Government’s Decree No. 121/2010/ND-CP of December 30, 2010; and the Law on Tax Administration and guiding documents.

Article 9. Settlement of existing problems

For land rented with annual land rent payment for which land rent contracts have been signed, stable land rents have been determined for a five-year period and land rent incentives are enjoyed during the incentive period in accordance with the law on collection of land rents, upon the expiration of this period or the period of incentive enjoyment, land rents prescribed in this Circular will be applied.

Article 10. Organization of implementation

1. Provincial-level People’s Committees shall direct financial and tax agencies and treasury offices to coordinate with local related agencies in determining payable, exempted and reduced land rents, and collecting land rents for rubber tree-growing land areas under the guidance in this Circular and the land and water surface rent collection policies;

2. This Circular takes effect on February 1, 2013.

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

For the Minister of Finance
Deputy Minister
NGUYEN HUU CHI