Circular No. 76/2014/TT-BTC dated June 16, 2014 of the Ministry of Finance guiding a number of articles of the Government’s Decree No. 45/2014/ND-CP of May 15, 2014, providing the collection of land use levy

CIRCULAR

Guiding a number of articles of the Government’s
Decree No. 45/2014/ND-CP of May 15, 2014, providing
the collection of land use levy[1]

Pursuant to the November 29, 2013 Land Law;

Pursuant to the December 16, 2002 Law on the State Budget;

Pursuant to the November 29, 2006 Law on Tax Administration and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Law on Tax Administration;

Pursuant to the June 20, 2012 Law on Price;

Pursuant to the Government’s Decree No. 45/2014/ND-CP of May 15, 2014, providing the collection of land use levy;

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining the functions, duties, 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 guiding a number of articles of the Government’s Decree No. 45/2014/ND-CP of May 15, 2014, providing the collection of land use levy as follows:

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Circular guides the determination and the order and procedures for determination, collection and payment of land use levy; land use levy exemption and reduction; owing and payment of land use levy; the transitional handling and a number of specific contents of the Government’s Decree No. 45/2014/ND-CP of May 15, 2014, providing the collection of land use levy (below referred to as Decree No. 45/2014/ND-CP).

Article 2.Subjects of application

1. Economic organizations, foreign-invested enterprises, households, individuals and overseas Vietnamese (below referred to as economic organizations, households and individuals for short) that are allocated land by the State with land use levy, permitted for change of land use purpose or have land use rights recognized by the State in the cases liable to land use levy prescribed in the Land Law and Decree No. 45/2014/ND-CP.

2. Other related agencies, organizations and individuals.

Chapter II

SPECIFIC PROVISIONS

Section 1

DETERMINATION AND COLLECTION AND PAYMENT OF LAND USE LEVY

Article 3.Determination of land use levy upon land allocation by the State with land use levy

The determination of payable land use levy upon land allocation by the State with land use levy must comply with Article 4 of Decree No. 45/2014/ND-CP; a number of contents of this Article are specifically guided as follows:

1. For economic organizations, households or individuals that are allocated land by the State with land use levy not through auction, payable land use levy shall be the land price used for land use levy calculation according to the land use purpose at the time of issuance of the land allocation decision multiplied (x) by the land use levy-liable area, in which:

1.1. The land price used for land use levy calculation:

a/ In case of land allocation by the State, if the land use levy-liable area of the land parcel or land lot is valued (calculated based on the land price in the Land Price Table) at VND 30 billion or more, for centrally run cities; VND 10 billion or more, for mountainous and highland provinces; or VND 20 billion or more, for other provinces, the land price used for land use levy calculation is the specific land price decided by the People’s Committee of the province or centrally run city (below referred to as the provincial-level People’s Committee) and determined by the direct comparison, subtraction, income-based or surplus-based method prescribed in the Government’s Decree on land price;

b/ In case of land allocation by the State, if the land use levy-liable area of the land parcel or land lot is valued (calculated based on the land price in the Land Price Table) at under VND 30 billion, for centrally run cities; under VND 10 billion, for mountainous and highland provinces; or under VND 20 billion, for other provinces, the land price used for land use levy calculation is the land price prescribed by the provincial-level People’s Committee in the Land Price table multiplied (x) by the land-price adjustment coefficient.

1.2. The land use levy-liable area is the land area liable to land use levy indicated in the land allocation decision.

2. Land use price adjustment coefficients used for determining land prices used for land use levy calculation shall be determined by provincial-level Finance Departments for each zone, road route and position corresponding to each land use purpose in conformity with the market and local socio-economic development conditions and submitted to provincial-level People’s Committees for promulgation on an annual basis after seeking opinions of provincial-level People’s Councils’ standing bodies.

In case some land areas for project implementation within the same zone or road route have land use coefficients (construction density and height) different from the average level in the zone or road route, provincial-level People’s Committees may prescribe land price adjustment coefficients higher or lower than the average level for calculating land use levy in these cases, and specify them in the decisions promulgating local land price adjustment coefficients.

Article 4.Determination of land use levy upon permission by the State for change of land use purpose for economic organizations

When changing the land use purpose, economic organizations shall pay land use levy under Clause 1, Article 5 of Decree No. 45/2014/ND-CP; a number of contents of this Clause are specifically guided as follows:

1.  In case of change of the use purpose from agricultural land or non-residential non-agricultural land leased or allocated by the State with land use levy to residential land for implementation of projects on construction of houses for sale or combined sale and lease, economic organizations shall pay land use levy as follows:

1.1. In case of land lease by the State with one-off rental payment for the entire lease period, when changing the land use purpose together with changing from land lease to land allocation, economic organizations shall pay the difference between the land use levy for the new land use purpose determined under Clause 1, Article 3 of this Circular and the one-off rental payable for the remaining land lease period at the time of issuance of the decision by a competent state agency permitting the change of land use purpose.

The one-off rental payable for the remaining land lease period mentioned at this Point shall be determined according to the following formula:

1.2. In case of land allocation by the State with land use levy, if economic organizations have paid land use levy in accordance with law before July 1, 2014, when permitted by the State to change the use purpose of such land to residential land, they shall pay the difference between the land use levy for the new land use purpose determined under Clause 1, Article 3 of this Circular and the land use levy calculated based on the price of the land type before the change for the remaining lease period at the time such change is permitted by a competent state agency.

The land use levy of the land type before the change for the remaining land lease period mentioned at this Point shall be determined according to the following formula:

1.3. The one-off rental payable for the remaining lease period mentioned at Point 1.1 of this Clause and the land use levy of the land type before the change of the use purpose for the remaining land use period mentioned at Point 1.2 of this Clause shall be determined based on the land price at the time the change is permitted by a competent state agency, specifically:

a/ If the land price used for calculation of land use levy for the new land use purpose falls in the case of determination by the land price adjustment coefficient method, the one-off rental payable for the remaining land lease period or the land price used for calculation of land use levy for the use purpose before the change shall be also determined by the land price adjustment coefficient method at the time the change is permitted by a competent state agency;

b/ If the land price used for calculation of land use levy for the new use purpose falls in the case of determination by the direct comparison, subtraction, income- or surplus-based method, the one-off rental payable for the remaining land lease period or the land price used for calculation of land use levy for the use purpose before the change is the specific land price determined by one of the above methods at the time the change is permitted by a competent state agency.

Cases of determination of the land price used for land use levy calculation by the land price adjustment coefficient method or other methods shall be identified under Clause 1, Article 3 of this Circular.

2. In case economic organizations lawfully acquire through transfer the rights to use agricultural land within the agricultural land use quota from households and individuals; agricultural land or non-agricultural land which is allocated for a definite term (for which these land users have fulfilled their financial obligation related to land use levy) for  implementing investment projects on construction of houses for sale or combined sale and lease or projects on construction of cemeteries and graveyards, payable land use levy shall be determined as follows:

2.1. In case the land price adjustment coefficient method is used to determine land use levy upon change of land use purpose:

a/ Based on cadastral records, land prices in the Land Price Table and the land price adjustment coefficient prescribed by the provincial-level People’s Committee and the sum of money an economic organization has paid for acquiring land use rights as determined by the finance agency, within 5 working days after receiving a complete dossier with above-said relevant information, the tax office shall determine the land use levy for the new purpose of the land of the project at the time of issuance of the decision permitting the purpose change and the payable land use levy amount, after subtracting (-) the sum of money paid by the economic organization for acquiring the land use rights;

b/ The sum of money paid by the economic organization for acquiring land use rights shall be determined and converted to the time the change of the land use purpose is permitted by a competent state agency, according to the following formula:

- For transferred land being agricultural land or non-agricultural land originating from allocation by the State for a definite period for which land users have paid land use levies:

In which: The land area of which the use purpose is changed is that for which the previous land user has fulfilled the financial obligation related to land use levy.

- For transferred land being agricultural land allocated within the land use quota of households and individuals:

Based on the information about the sum of money for compensation and ground clearance of projects corresponding to the case of land recovery by the State sent by the People’s Committee of a competent level or the organization in charge of compensation and ground clearance, and the sum of money paid by the economic organization for acquiring land use rights already determined and converted according to the above formula, the finance agency shall determine the specific sum of money which the economic organization may subtract from the land use levy payable under the principle prescribed at Point d, Clause 1, Article 5 of Decree No. 45/2014/ND-CP and inform it to the tax office for collection.

The process and time of transfer of dossiers for determining the financial obligation related to land use levy between the natural resources and environment agency, tax office and finance agency must comply with the guiding circular of the Ministry of Finance and the Ministry of Natural Resources and Environment.

2.2. In case the direct comparison, subtraction, income- or surplus-based method is used to calculate land use levy upon change of land use purpose:

Based on the specific price of the land according to the new purpose and the specific price of the land before change of the use purpose of the remaining land use period decided by the provincial-level People’s Committee; based on the sum of money already paid by the economic organization for acquiring land use rights which is allowed to be subtracted from the land use levy determined by the finance agency according to the formula below and the principle prescribed at Point d, Clause 1, Article 5 of Decree No. 45/2014/ND-CP; within 5 working days after receiving a complete dossier with the above-said relevant information, the tax office shall determine and notify the payable land use levy.

- For transferred land being agricultural land or non-agricultural land originating from allocation by the State for a definite period for which land users have paid land use levy:

In which: The land area of which the use purpose is changed is that for which the previous land user has fulfilled the financial obligation related to land use levy.

- For transferred land being agricultural land allocated within the land use quota of households and individuals:

3. In case of changing the use purpose from non-residential non-agricultural land (being currently in use or acquired from others) to residential land under Clause 1 or 2 of this Article, the price of the land type before change of the use purpose is the price of the corresponding type of non-agricultural land prescribed by the Government (rural land for trading and services; non-agricultural land for production and business other than rural land for trading and services; urban land for trading and services, and non-agricultural land for production and business other than urban land for trading and services).

4. In case the remaining land use period determined according to the formula prescribed at Point 1.1 or 1.2, Clause 1 or Point 2.1, Clause 2 of this Article, is not a round number of years, it shall be converted into months; for odd numbers of days, 15 or more days shall be rounded up to one month and no land use levy shall be paid for fewer than 15 days.

Article 5.Determination of land use levy when households and individuals are permitted by the State to change the land use purpose to residential land

Households and individuals that are permitted by competent state agencies to change the land use purpose to residential land shall pay land use levy under Clause 2, Article 5 of Decree No. 45/2014/ND-CP; a number of contents in this Clause are guided as follows:

1. For households or individuals that are leased by the State non-agricultural land (other than residential land) with one-off rental payment for the entire lease period, when changing the land use purpose to residential land at the same time with changing from land lease to land allocation, they shall pay a land use levy being the difference between the land use levy calculated based on the price of residential land minus (-) the payable one-off land rental calculated based on the price of non-agricultural land of the remaining land lease period at the time the change of land use purpose is permitted by a competent state agency prescribed at Point c, Clause 2, Article 5 of Decree No. 45/2014/ND-CP, specifically:

The one-off rental payable for the remaining lease period shall be calculated according to the formula prescribed at Point 1.1, Clause 1, Article 4 of this Circular. The land price used for calculation of one-off rental payable for the remaining lease period shall be determined by the land price adjustment coefficient method if the land use levy-liable area of the land parcel or land lot is valued (based on the land price in the Land Price Table at the time of issuance of the decision of a competent  state agency permitting the change of land use purpose) at under VND 30 billion, for centrally run cities; under VND 10 billion, for mountainous and highland provinces; or under VND 20 billion, for other provinces. If the land parcel or land lot having the land use rights of the land use levy-liable area valued higher than the above-said value level, the land price used for calculation of the one-off rental payable for the remaining lease period shall be determined by the direct comparison, subtraction, income- or surplus-based method prescribed in the Government’s Decree on land prices.

2. In case of change of the use purpose of the land acquired through transfer of land use rights from lawful land users to residential land, payable land use levy shall be determined as follows:

a/ For land originating from garden or pond land in the  same land parcel with houses in a residential area and not being recognized as residential land, the payable land use levy is equal to 50% of the difference between the land use levies calculated based on the price of residential land and based on the price of agricultural land;

b/ For land originating from agricultural land allocated within the agricultural land quota of households and individuals, the payable land use levy is the difference between the land use levies calculated based on the price of residential land and based on the price of agricultural land;

c/ For land originating from non-agricultural land with land use levy, the payable land use levy is the difference between the land use levies calculated based on the price of residential land and based on the price of non-agricultural land of the remaining land use period.

The land use levy of non-agricultural land for the remaining land use period shall be  determined according to the formula prescribed at Point 1.2, Clause 1, Article 4 of this Circular.

3. The land price used for land use levy calculation in the cases prescribed in Clauses 1 and 2 of this Article is that applicable at the time of issuance of the decision of a competent state agency permitting the change of land use purpose, specifically:

a/ For land areas within the residential land allocation quota, the land price used for calculating land use levies of the use purposes before and after the change is that prescribed in the Land Price Table corresponding to each purpose;

b/ For land areas in excess of the residential land allocation quota, the land price used for calculating land use levies of the use purposes before and after the change is that corresponding to each purpose and each case of application of a land price-determining method prescribed at Point 1.1, Clause 1, Article 3 of this Circular;

c/ In case of change of the use purpose from non-residential non-agricultural land (being used or originating from acquisition of land use rights) to residential land, the land price of the land type before the change is that of the corresponding type of non-agricultural land prescribed by the Government (rural land for trading and services; non-agricultural land for production and business other than rural land for trading and services; urban land for trading and services, and non-agricultural land for production and business other than urban land for trading and services).

Article 6.Distribution of land use levy to different users of mixed construction works comprising houses

Distribution of land use levy in the case of multi-story construction works attached to land allocated by the State to different users prescribed in Clause 3, Article 4 of Decree No. 45/2014/ND-CP shall be carried out as follows:

1. For construction works being high rises, condominiums, buildings with mixed used purposes (excluding the case specified in Clause 2 of this Article), the land use levy shall be distributed to each user according to the distribution coefficient multiplied (x) by the housing area of each user as follows:

a/ The distribution coefficient is the ratio between the land area for construction of the building and the total house area of users;

b/ If the building has a basement, 50% of the basement area shall be added to the total house area of users for calculating the distribution coefficient.

If the basement area is determined to be under common ownership of the building’s occupants, it shall be evenly distributed to them.

If the basement area is determined to be under the ownership of the investor, it shall be distributed for calculating the land use levy payable by the investor.

2. In case of state-owned houses sold to current tenants, land use levy shall be distributed in accordance with the law on sale of state-owned houses.

Article 7.Determination of residential land allocation quotas for calculation of land use levy of households and individuals when the State permits change of land use purpose or recognizes land use rights

For households or individuals that are permitted by the State to change the land use purpose or have their land use rights recognized by the State and have to pay land use levy under Articles 5, 6, 7 and 8 of Decree No. 45/2014/ND-CP; residential land areas determined to be within the quota and used for land use levy calculation are guided as follows:

1. The determination of within-quota land areas must abide by the principle that for each household (including households formed from household separation in accordance with law) or individual, the land area within the residential land allocation quota or land use rights recognition quota shall be determined only once and within one province or centrally run city.

For a household or an individual that has many land parcels within a province or centrally run city, such household or individual may have these areas of these parcels added up to determine the land area within the residential land allocation quota or land use rights recognition quota provided that the total of the selected land areas does not exceed the residential land allocation quota or land use rights recognition quota in the locality selected first.

Example 1:

Mr. A is using two land parcels; the first has an area of 60 square meters located in district X, city Z, has a house but none of the papers prescribed in Clause 1, Article 100 of the 2013 Land Law and has been stably used without any dispute since 1997; the second is agricultural land having an area of 1,640 square meters located within a residential area, and now compliant with the local land use master plan. The land use rights recognition quota in district X, city Z is 100 square meters; the land use rights recognition quota in district Y is 150 square meters. Z is a centrally run city.

In 2015, Mr. A has his land use rights to the first land parcel recognized by the State and is permitted to change the use purpose of the second land parcel to residential land. He selects the first land parcel for determining the within-quota land area.

When being granted a certificate for the first land parcel, 60 square meters of this land area is determined to be within the quota, for which Mr. A shall pay 50% of the land use levy based on the land price set in the Land Price Table.

Mr. A later carries out the procedures and is permitted to change the use purpose of the second land parcel to residential land, the land use levy shall be determined as follows:

- The remaining within-quota area transferred from the first land parcel is 40 square meters (= 100 square meters – 60 square meters), the land price in the Land Price Table shall be used for calculating the land use levy for these 40 square meters.

- The over-quota area is 1,600 square meters (= 1,640 square meters – 40 square meters). Presume that the land price of the second land parcel is VND 20,000,000/square meter according to the Land Price Table of city Z, the value of the second land parcel calculated based on the over-quota land area (and the land price in the Land Price Table) is:

1.600 square meters x VND 20,000,000/square meters = VND 32,000,000,000

Since the over-quota land area is valued at more than VND 30 billion, the land use levy for the new purpose of the over-quota land area shall be calculated based on the specific land price determined by the direct comparison, subtraction, income- or surplus-based method as decided by the provincial-level People’s Committee.

2. For households and individuals that co-own the land use rights to one land parcel, the area within the residential land allocation quota shall be determined as follows:

a/ If the households or individuals are permitted by a competent state agency to divide the land parcel to each household, the within-quota area for land use levy calculation shall be calculated according to each divided land parcel when carrying out the procedures for the grant of certificates and on the principle that each household or individual to which the land parcel is divided may have the land area within the residential land allocation quota or residential land use rights recognition quota determined only once and within one province or centrally run city as prescribed at Point a, Clause 3, Article 3 of Decree No. 45/2014/ND-CP;

b/ If the households or individuals do not divide or are not permitted by a competent state agency to divide the land parcel, the within-quota residential land area shall be calculated according to the standards for determining the quota of the household or individual appointed to be the representative of the co-owners to carry out the procedures for the grant of a certificate.

Example 2:

Mr. A, Mr. B and Mrs. C are bequeathed by their parents a land parcel of 210 square meters in district X, province Y, which has none of the papers prescribed in Clause 1, Article 100 of the 2013 Land Law, has a house and had been stably used from October 15, 1993 to before July 1, 2004, without any dispute and in conformity with the local land use master plan. Mr. A and Mr. B have no within-quota land areas determined yet for land use levy calculation; Mrs. C has had one within-quota land area determined with regard to another land parcel. The land use quota in district X is 100 square meters. In 2016, the above land parcel is permitted by a competent state agency to be granted a certificate. The land use levy shall be determined as follows:

- In case Mr. A, Mr. B and Mrs. C agree to and complete the division of the land parcel into three, each 70 square meters, then:

+ Mr. A and Mr. B shall be granted certificates for their divided land areas of 70 square meters each which are determined to be within-quota land areas; and they shall pay 50% of the land use levy calculated based on the land price set in the Land Price Table promulgated by the provincial-level People’s Committee for their land parcels for which certificates are granted.

+ The land parcel of 70 square meters of Mrs. C shall be determined to be over quota, for which she shall pay 100% of the land use levy calculated based on the land price set in the Land Price Table multiplied (x) by the land price adjustment coefficient.

- In case Mr. A, Mr. B and Mrs. C appoint Mr. B as their representative to carry out the procedures of application for a certificate for the whole land parcel of 210 square meters (if they are not permitted to divide the parcel), 50% of the land use levy for the area of 100 square meters within the local residential land recognition quota calculated based on the land price in the Land Price Table; and 100% of the land use levy calculated based on the land price in the Land Price Table multiplied (x) by the local land price adjustment coefficient for the over-quota area of 110 square meters, shall be paid.

3. For households and individuals that have inherited land use rights without having to pay land use levy; acquired lawful land use rights without having to pay land use levy, or have valid papers on land use rights and now have their certificates renewed, they shall not be considered having the within-quota land area already determined once for land use levy calculation as prescribed at Point a, Clause 3, Article 3 of Decree No. 45/2014/ND-CP.

Example 3:

In 2012, Mr. A was bequeathed by his parents a land parcel of 250 square meters, for which a certificate had been granted and a land use levy had been paid. Therefore, Mr. A had to carry out only the procedures for change of the name in the certificate without having to pay any land use levy. In addition, Mr. A has had no within-quota land area determined for land use levy calculation for any land parcel.

In 2015, Mr. A carries out the procedures to ask for permission to change the use purpose of an agricultural land area of 200 square meters originating from allocation by the State in 2004 in accordance with the land law, to residential land and obtains the permission from a competent state agency. Then Mr. A will have the within-quota land area determined before determining the land price used for land use levy calculation upon change of the use purpose of the above land parcel.

4. Based on the cadastral information cards supplied by the natural resources and environment agency, which clearly indicates the within-quota and over-quota land areas prescribed at Point a, Clause 3, Article 3 of Decree No. 45/2014/ND-CP, tax offices shall calculate and notify payable land use levy to households and individuals.

5. The aggregation of land parcels for determining the quota for land use levy calculation prescribed in Clause 1 of this Article may be applied to the cases in which households and individuals are permitted to change the land use purpose and have land use rights recognized from July 1, 2014. In case households and individuals are granted certificates before July 1, 2014, for land parcels selected for quota determination, and these land parcels are smaller than the recognition quota or land allocation quota in their locality; after July 1, 2014, if these households or individuals submit dossiers of application for certificates for second land parcels, the remaining within-quota areas of the first selected land parcels may be added to the second land parcels for determining within-quota and over-quota areas for land use levy calculation.

Example 4:

Mr. A is using 2 land parcels. The first has an area of 70 square meters located in district X, province K; has a house and none of the papers prescribed in Clause 1, Article 50 of the 2003 Land Law; has been stably used without any dispute since 1997. The second has an area of 120 square meters located in district Y, province K, which is agricultural land located within a residential area, and now compliant with the local land use master plan.

In 2012, Mr. A had his rights to use the first land parcel recognized by the State. The land use rights recognition quota in district X, province K is 100 square meters. When being granted a certificate for the first land parcel, the whole area of 70 square meters was determined to be within-quota residential land.

In 2015, Mr. A continues to carry out the procedures and is permitted to change the use purpose of the second land parcel to residential land, the payable land use levy shall be determined as follows:

- The remaining within-quota area of the first land parcel allowed to be transferred to the second land parcel is 30 square meters (= 100 square meters - 70 square meters) and the land price in the Land Price Table may be applied to this area for land use levy calculation.

- The over-quota area of 90 square meters (= 120 square meters – 30 square meters) is subject to the land price in the Land Price Table multiplied (x) by the land price adjustment coefficient for land use levy calculation.

Article 8.Determination of land use levy upon recognition of land use rights (grant of certificates) for households and individuals with regard to residential land allocatedultra viresbefore July 1, 2004

The determination of land use levy upon recognition of land use rights (grant of certificates) for households and individuals for residential land allocatedultra viresbefore July 1, 2004, must comply with Article 8 of Decree No. 45/2014/ND-CP; a number of contents of this Article are guided as follows:

Papers proving the payment of money to agencies or organizations for land use upon determination of land use levy prescribed at Point a or b, Clause 1, Article 8 of Decree No. 45/2014/ND-CP, include:

1. Invoices, receipts and bills of money for land use and compensation money under Decision No. 186/HDBT of May 31, 1990, of the Ministers’ Council on compensation for damage to agricultural land or forested land due to change to other use purposes.

2. Invoices, receipts and bills of money under the Ministry of Finance’s Circular No. 60/TC-TCT of July 16, 1993, guiding the management of proceeds from the sale of state-owned houses, and the grant of land use rights for construction of houses and other works.

3. Invoices, receipts and bills or other papers proving the payment of money for land use, issued by the People’s Committee of a certain level or by the agency or organization that allocated landultra vires.

Article 9.Sequence of determination, collection and payment of land use levy

1. For economic organizations

a/ In case the land price adjustment coefficient method is applied to determine land use levy: Based on the land price adjustment coefficient and the Land Price Table promulgated by the provincial-level People’s Committee; the sum of money for compensation, support and resettlement or the sum of money for acquiring land use rights which is allowed to be subtracted from the land use levy (if any) as determined by the finance agency; within 5 working days after receiving the cadastral records from the natural resources and environment agency, the tax office shall determine and notify the land use levy to economic organizations;

b/ In case the direct comparison, subtraction, income- or surplus-based method is applied to calculate land use levy: Within 5 working days after receiving full cadastral records from the natural resources and environment agency; the land price used for land use levy calculation decided by the provincial-level People’s Committee; the sum of money for compensation, support and resettlement or the sum of money for acquiring land use rights which is allowed to be subtracted from the land use levy (if any) as determined by the finance agency; the tax office shall determine and notify the land use levy to economic organizations.

The tax office shall compile dossiers to monitor the collection and payment of land use levy with regard to economic organizations according to the form provided in Appendix 05 to this Circular.

2. For households and individuals:

a/ In case they are allocated new residential land by the State, permitted to change the land use purpose to residential land or have land use rights recognized by the State (being granted with certificates) and the land price used for land use levy calculation is determined by the land price adjustment coefficient method:

Households and individuals shall submit dossiers of application for certificates or of request for permission to change the land use purpose to the land use rights registration office or natural resources and environment agency (if there is no land use rights registration agency yet).

Based on cadastral records sent by the land use rights registration office or natural resources and environment agency, within 5 working days after receiving a complete dossier, the tax office shall base itself on the Land Price Table, the land price adjustment coefficient prescribed by the provincial-level People’s Committee and the land use levy-liable land area to determine the payable land use levy and notify it to the household or individual concerned.

In case there are insufficient grounds for determining the payable land use levy, within 3 working days after receiving the dossier, the tax office shall notify in writing the land use rights registration office or natural resources and environment agency for supplementing the dossier.

b/ In case of land allocation, change of land use purpose or recognition of land use rights in which land prices used for land use levy calculation are determined by the income-based, surplus-based, subtraction or comparison method, based on cadastral records sent by the natural resources and environment agency and specific land prices decided by provincial-level People’s Committees, tax offices shall notify payable land use levies to households and individuals concerned.

Tax offices shall compile dossiers to monitor the collection and payment of land use levy with regard to households and individuals according to the form provided in Appendix 05 to this Circular.

3. The process and time of transfer of dossiers between the land use rights registration office, the natural resources and environment agency and the finance agency in determining the land price for calculating, collecting and paying land use levy prescribed in Clauses 1 and 2 of this Article must comply with the guidance of the Ministry of Finance and the Ministry of Natural Resources and Environment.

Article 10.Land use levy collection upon change of detailed construction master plans

1. For economic organizations that are allocated land not through auction of land use rights or permitted to change the land use purpose for implementing investment projects and have fulfilled the financial obligation related to land use levy, and are later permitted by a competent state agency to change detailed construction master plans resulting in the change of the land use coefficient (construction density and height of works), these cases shall be handled as follows:

1.1. If economic organizations propose and a competent state agency permits the change of detailed construction master plans (construction density and height of works) resulting in a higher land use coefficient, they shall additionally pay land use levy on the principles that:

a/ In case the land price used for land use levy calculation is determined by the direct comparison, subtraction, income-or surplus-based method, economic organizations shall pay the difference between the land use levies calculated based on the land prices determined by one of the above methods of the detailed construction master plan before and after the adjustment at the time the master plan is permitted by a competent state agency to be changed;

b/ In case the land price used for land use levy calculation is determined by the land price adjustment coefficient method, economic organizations shall pay the difference between the land use levies calculated based on the land prices determined by the land price adjustment coefficient method of the detailed construction master plan before and after the adjustment at the time the change of the master plan is permitted by a competent state agency.

1.2. If, due to management requirements, the State adjusts the detailed construction master plan resulting in a lower land use coefficient (construction density and height) resulting in a lower land use levy, economic organizations shall be refunded the land use levy equal to the difference between the land use levies calculated based on the detailed master plan before and after the adjustment at the time the adjustment of the master plan is permitted by a competent state agency. The difference shall be determined under Point 1.1 of this Clause.

The refund of land use levy prescribed in this Clause may be made either directly or by offsetting against the financial obligation of economic organizations to the State in accordance with the laws on the state budget and tax administration.

2. For economic organizations that are allocated land through auction of land use rights for implementing investment projects and have fulfilled the financial obligation related to land use levy, and propose to change detailed construction master plans resulting in the change of the land use coefficient (construction density and height), they shall determined and pay additional land use levy (if any) on the principles prescribed in Clause 1 of this Article; specifically:

a/ In case the reserve price of the land use rights auction is determined by the direct comparison, subtraction, income-based or surplus-based method, economic organizations shall pay the difference between the land use levies calculated based on the land prices determined by one of the above methods of the detailed construction master plan before and after the adjustment at the time the change of the master plan is permitted by a competent state agency;

b/ In case the reserve price of the land use rights auction is determined by the land price adjustment coefficient method, based on the Land Price Table, the land price adjustment coefficient and the adjustment principle of this coefficient prescribed by the provincial-level People’s Committee, economic organizations shall pay the difference between the land use levies calculated based on the land prices determined by the land price adjustment coefficient method corresponding to the construction master plans before and after the adjustment at the time the change of the master plan is permitted by a competent state agency.

3. Determination of land use levy in the case of change of detailed construction planning items for the cases of land allocation, change of land use purpose and fulfillment of the financial obligation before July 1, 2014.

a/ For the cases of calculation and payment of land use levy under the policy on land use levy in which the determined land prices were based on the detailed construction planning items of the projects (land use coefficient, construction density and height), when these planning items of the projects are permitted by a competent state agency to be changed, land use levy shall be re-determined and the difference (if any) shall be collected in accordance with the law applicable at the time the change of planning items is decided by competent authorities;

b/ For the cases of calculation and payment of land use levy under the policy on land use levy in which the determined land prices were not based on the detailed construction planning items of the projects, when these planning items of the projects are permitted by a competent state agency to be changed, it is not required to determine and collect the difference (if any) in land use levy.

Article 11.Settlement of compensation and ground clearance money

The settlement of compensation and ground clearance money must comply with Article 15 of Decree No. 45/2014/ND-CP; a number of contents of this Article are specifically guided as follows:

1. For the case of land allocation not through auction, compensation and ground clearance expenses shall be refunded by the state budget in accordance with the law on the state budget.

2. For the case of land allocation through auction, compensation and ground clearance expenses shall be refunded to the state budget by persons who are allocated land. This sum of money may be subtracted by land users from the payable land use levy (if any) or included in the project’s investment capital (if land users do not have to pay land use levy).

3. For the case of voluntary advance payment of compensation and ground clearance money under Clause 2, Article 15 of Decree No. 45/2014/ND-CP, the finance agency shall make mutual ceasing of the compensation and ground clearance money allowed to be subtracted from the payable land use levy in accordance with the law on the state budget.

Article 12.Owing of land use levy and payment of owed land use levy

Households and individuals that are permitted to change the land use purpose or granted certificates and have to pay land use levy under this Decree and households and individuals that are allocated by the State for resettlement land and meet financial difficulties and wish to owe land use levy, may owe payable land use levy under Article 16 of Decree No. 45/2014/ND-CP; a number of contents of this Article are specifically guided as follows:

1. Procedures for owing and payment of land use levy

a/ Households and individuals that are eligible to owe land use levy under Article 16 of Decree No. 45/2014/ND-CP shall make a written request enclosed with a dossier of application for a certificate or a dossier of request for change of land use purpose or a dossier of allocation of resettlement land; or make a written request for owing upon receipt of the notice of payable land use levy and submit it to the land use rights registration office or the district-level Natural Resources and Environment Division (if there is no land use rights registration office yet) of the district-level People’s Committee of the locality where the land is located;

b/ Based on cadastral records, which comprise the written request of a household or an individual for land use levy owing, sent by the land use rights registration office (or the district-level Natural Resources and Environment Division), the tax office shall determine the payable land use levy of the household or individual under regulations and make a dossier to monitor the land use levy (a register to monitor owed land use levy specifying within-quota and over-quota land areas); and at the same time send the information about the payable land use levy to the land use rights registration office or the district-level Natural Resources and Environment Division;

c/ Based on the land use levy determined by the tax office, the land use rights registration office (or the district-level Natural Resources and Environment Division) shall submit its proposal to the district-level People’s Committee for grant of a certificate to the household or individual, which clearly indicates the owed land use levy amount. In case a household or an individual makes a written request for owing the land use levy only after receiving a notice of land use levy payment, the district-level People’s Committee grants a certificate to the household or individual which indicates the owed land use levy, the land use rights registration office shall send the information about the land use levy owing to the tax office of the same level for making a register to monitor the owing and payment of land use levy under regulations.

2. Payment of owed land use levy:

a/ When paying the owed land use levy, a household or an individual shall come to the tax office to declare the payment according to the form provided in Appendix 03 to this Circular; the tax office shall base itself on the monitoring register to carry out the payment procedures for households and individuals.

In case after 5 years from the date of owing written on the certificate, a household or an individual can pay the owed amount or within 5 years it/she/he fails to fully pay the owed amount, the still owed land use levy amount for each of the within-quota and over-quota areas shall be converted into a percentage (%) of unfulfilled financial obligation and the household or individuals shall pay land use levy for these land areas as follows:

Payable land use levy = owed land use levy amount divided by (:) total land use levy amount calculated based on the land price at the time of grant of the certificate multiplied by (x) the land use levy re-determined based on the land price at the time of payment of the owed amount.

b/ After the land user has fully paid the owed amount, based on the monitoring register, the tax office shall give certification according to the form provided in Appendix No. 04 to this Circular for the land user to come to the land use rights registration office (or the district-level Natural Resources and Environment Division) to carry out the procedures for deleting the owed land use levy amount from the certificate.

3. Households and individuals that are allowed to owe land use levy shall fully pay the owed amount when transferring their land parcels. If permitted to transfer part of a land parcel, based on the dossier of permission for the land parcel division, the tax office shall determine the land use levy amount corresponding to the transferred land area. For inherited land use rights for which the estate leaver has not yet paid the owed land use levy amount, the inheritor shall pay the owed amount in accordance with the inheritance law.

Section 2

LAND USE LEVY EXEMPTION OR REDUCTION

Article 13.Land use levy exemption

Land use levy exemption must comply with Article 11 of Decree No. 45/2014/ND-CP; a number of contents of this Article are specifically guided as follows:

1. Land use levy exemption for land areas within the residential land allocation quota in cases in which the State allocates land to, permits change of land use purpose or recognizes land use rights for, people with meritorious services to the revolution must comply with the law on people with meritorious services. Land use levy exemption for people with meritorious services to the revolution may be effected only when there are decisions of competent state agencies permitting the land use levy exemption in accordance with the law on people with meritorious services.

2. Poor households and ethnic minority households eligible for land use levy exemption are those having permanent residence registrations in areas with extremely difficult socio-economic conditions or in border areas or on islands in the law-prescribed list of areas with extremely difficult socio-economic conditions, border areas and islands.

3.  Those who are allocated new land under relocation projects due to natural disasters are entitled to land use levy exemption when they receive no compensations for land in the places from which they relocate (places of departure).

Article 13.Land use levy reduction

Land use levy reduction must comply with Article 12 of Decree No. 45/2014/ND-CP; a number of contents of this Article are specifically guided as follows:

1. Poor households and ethnic minority households outside areas with extremely difficult socio-economic conditions on the list of areas with extremely difficult socio-economic conditions, border areas and islands and other than those eligible for land use levy exemption specified in Clause 2, Article 11 of Decree No. 45/2014/ND-CP, when allocated land by a competent state agency, having their land use rights recognized (being granted with certificates) for the first time or permitted to change the use purpose of agricultural land or (non-residential) non-agricultural land to residential land, are entitled to 50% reduction of land use levy for land areas within the allocation quota. Poor households and ethnic minority households eligible for land use levy reduction are those having permanent residence registrations in localities where land areas are located for which certificates are granted, to which use rights are recognized, or of which the use purpose is permitted to be changed.

2. Land use levy reduction for people with meritorious services to the revolution as prescribed in Clause 2, Article 12 of Decree No. 45/2014/ND-CP may be effected only when there are decisions of competent state agencies permitting the land use levy reduction in accordance with the law on people with meritorious services (provincial-level People’s Committees or authorized or delegated agencies).

Article 15.Dossiers of request for land use levy exemption or reduction and places of receipt

1. A dossier of request for land use levy exemption or reduction must comprise:

1.1. A written request for land use levy exemption or reduction, specifying the area and reason for exemption or reduction;

1.2. Papers proving the eligibility for land use levy exemption or reduction (certified copies), specifically:

a/ Papers related to the status of eligibility for land use levy exemption or reduction as guided in Clause 1, Article 13 and Clause 2, Article 14 of this Circular, for people with meritorious services to the revolution;

b/ Certification by a competent agency of poor household under regulations of the Ministry of Labor, War Invalids and Social Affairs, for members of poor households;

c/ The permanent residence registration or certification of the commune-level People’s Committee, for ethnic minority households in areas with difficult or extremely difficult socio-economic conditions;

d/ Written approval of a competent state agency of the project and decision on land use levy exemption, for social housing projects in accordance with the law on social housing;

dd/ Certification of a competent agency of no compensation and support for relocation, for land for construction of houses for people who have to relocate due to natural disasters.

1.3. Papers related to the land parcel (if any).

2. A land user shall submit a dossier of request for land use levy exemption or reduction as follows:

a/  For economic organizations: Within 15 working days after receiving the decision on land allocation or permitting the change of the land use purpose, the economic organization shall submit a dossier of request for land use levy exemption or reduction to the tax office of the locality where the land is located;

b/ For households and individuals: Dossiers of request for land use levy exemption or reduction shall be submitted together with dossiers of application for certificates or of request for permission to change the land use purpose to the land use rights registration office or natural resources and environment agency.

Article 16.Order and procedures for land use levy exemption or reduction

Based on the dossiers of request for land use levy exemption or reduction from economic organizations or the natural resources and environment agency, within 15 working days, the tax office shall determine and issue a decision on land use levy exemption or reduction, specifically as follows:

1. For cases of determination of land prices by the direct comparison, subtraction, income- or surplus-based method, the tax office shall determine the exempted or reduced land use levy amount to be the land use levy-liable area multiplied (x) by the land price in the Land Price Table multiplied (x) by the land price adjustment coefficient, and write the exempted or reduced amount in the decision on land use levy exemption or reduction, and also write in the decision these sentences: “In case the economic organization transfers the use rights to the land area for which it has enjoyed land use levy exemption or reduction, it shall pay the exempted or reduced land use levy amount to the State; the land use levy written in this Decision shall be re-calculated in accordance with the law effective at the time of transfer.”

2. For cases of determination of land prices for land use levy calculation are those in the Land Price Table multiplied (x) by the land price adjustment coefficient, the tax office shall determine the exempted or reduced land use levy amount to be the land use levy-liable area multiplied (x) by the land price in the Land Price Table multiplied (x) by the land price adjustment coefficient and write the exempted or reduced land use levy amount in the decision on land use levy exemption or reduction.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 17.Transitional handling of some issues arising when the Circular takes effect

1. In case provincial-level People’s Committees have not yet issued the land price adjustment coefficients under Decree No. 45/2014/ND-CP and the guidance in this Circular, the land price adjustment coefficients of 2014 already issued under the Ministry of Finance’s Circular. No. 92/2011/TT-BTC of April 29, 2011, continue to be used through December 31, 2014, for determining land prices for land use levy calculation.

2. For dossiers of request for determination of the financial obligation related to land use levy already received by competent state agencies before July 1, 2014, these agencies shall settle them.

3. For dossiers of request for determination of the financial obligation related to land use levy submitted by households and individuals to the land use rights registration offices or natural resources and environment agencies or district-level People’s Committees or transferred to tax offices before July 1, 2014, these agencies shall settle them according to the land policies and prices applicable at the time of receipt of complete and valid dossiers.

For dossiers of request for determination of the financial obligation related to land use levy submitted by economic organizations to the land use rights registration offices or natural resources and environment agencies or district-level People’s Committees or transferred to tax offices or finance agencies before July 1, 2014, these agencies shall settle them according to the land policies and prices applicable at the time of issuance of decisions on land allocation or permission to change the land use purpose or at the time of actual handover of land in accordance with the law on the collection of land use levy applicable before July 1, 2014.

4. For housing projects and new-urban center projects with decisions of competent state agencies permitting the collection and payment of land use levy under the Government’s Resolution No. 33/2008/NQ-CP of December 31, 2008, and the guidance in the Ministry of Finance’s Circular No. 192/2009/TT-BTC of October 1, 2009, guiding the pilot payment of land use levy for new-urban center projects, housing projects and industrial park infrastructure projects prescribed in Resolution No. 33/2008/NQ-CP before July 1, 2014, they may continue to implement these regulations. From July 1, 2014 on, for housing projects and new-urban center projects for which land prices and land use levies are not determined under the Government’s Resolution No. 33/2008/NQ-CP of December 31, 2008, their land use levies shall be determined, collected and paid under Decree No. 45/2014/ND-CP and the guidance in this Circular.

5. For households and individuals that are permitted by competent state agencies to change the land use purpose or have their land use rights recognized (being granted with certificates) on or after July 1, 2014, they shall pay land use levy at the time of issuance of decisions on permission for change of land use purpose or recognition of land use rights by competent state agencies.

In case households or individuals have submitted valid dossiers of request for permission to change land use purpose or of application for certificates but competent state agencies fail to promptly issue decisions on permission for change of land use purpose or recognition of land use rights, their financial obligation related to land use levy shall be determined according to the land policy and prices applicable at the time of the expiration of the time limit for competent state agencies to issue such decisions prescribed in the Joint Circular of the Ministry of Finance and the Ministry of Natural Resources and Environment guiding the transfer of dossiers of land users for performing the financial obligations related to land use levy and land rental.

Article 18.Implementation responsibility

1. Provincial-level People’s Committees shall:

a/ Direct finance agencies to formulate in coordination with related local agencies land price adjustment coefficients for application from January 1, 2015, at the latest;

b/ Direct finance, tax and natural resources and environment agencies and state treasuries to coordinate with other related local agencies in determining and collecting land use levy under the guidance in this Circular;

c/ Examine and handle wrongdoings or complaints and denunciations according to their competence prescribed by law;

d/ Establish a process of coordination among local functional agencies in the transfer of dossiers and determination of the financial obligations related to land use levy prescribed in this Circular in compliance with relevant documents and local practical conditions, specifying the time limits and responsibilities of each agency, unit or land user for land use levy declaration, determination, collection and payment.

2. The General Department of Taxation shall direct the determination, collection and payment of land use levy according to the administrative reform procedures; direct the consideration of and decision on land use levy exemption and reduction under Decree No. 45/2014/ND-CP and the guidance in this Circular.

3. State treasuries shall direct the collection of land use levies according to the state budget revenue collection process and agreements with the tax offices in order to facilitate the payment of land use levies for land users into the state budget.

Article 19.Effect

1. This Circular takes effect on August 1, 2014.

2. Land use levy-liable cases arising from July 1, 2014, must comply with the Government’s Decree No. 45/2014/ND-CP of May 15, 2014, on the collection of land use levy and the guidance in this Circular.

3. To annul Circular No. 117/2004/TT-BTC of December 7, 2004, guiding the implementation of the Government’s Decree No. 198/2004/ND-CP of December 3, 2004, on the collection of land use levy; the Ministry of Finance’s Circular No. 70/2006/TT-BTC of August 2, 2006, amending and supplementing Circular No. 117/2004/TT-BTC of December 7, 2004, and Circular No. 93/2011/TT-BTC of June 29, 2011, amending and supplementing Circular No. 117/2004/TT-BTC of December 7, 2004.

4. This Circular annuls the contents on collection of land use levy in Form No. 01/TKTH-SDDPNN, Form No. 02/TSDD and Form No. 03/MGTH issued together with the Ministry of Finance’s Circular No. 156/2013/TT-BTC of November 5, 2013, guiding the implementation of a number of articles of the Law on Tax Administration and the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration and the Government’s Decree No. 83/2013/ND-CP of July 22, 2013; annuls the contents on collection of land use levy in Form No. 23/QTr-KK issued together with Declaration Process No. 1864/QD-TCT of December 21, 2011, issuing the tax administration, declaration, payment and accounting processes.

Any problems 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