Circular No. 89/2017/TT-BTC dated August 23, 2017 of the Ministry of Finance guiding the implementation of a number of articles of the Decree No. 35/2017/ND-CP dated April 03, 2017 of the Government prescribing the collection of land use levy, land rental and water surface rental in economic zones and hi-tech zones

THE MINISTRY OF FINANCE

Circular No. 89/2017/TT-BTC dated August 23, 2017 of the Ministry of Finance guiding the implementation of a number of articles of the Decree No. 35/2017/ND-CP dated April 03, 2017 of the Government prescribing the collection of land use levy, land rental and water surface rental in economic zones and hi-tech zones

Pursuant to the Government s Decree No. 35/2017/ND-CP dated April 03, 2017 prescribing collection of land use levy, land rental and water surface rental in economic zones and hi-tech zones;

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

Pursuant to the Government’s Decree No. 46/2014/ND-CP dated May 15, 2014 prescribing the collection of land rental and water surface rental;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining Functions, Tasks, Powers and Organizational Structure of Ministry of Finance;

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

Minister of Finance promulgates a Circular guiding certain articles of the
Decree No. 35/2017/ND-CP dated April 03, 2017 of the Government prescribing the collection of land use levy, land rental and water surface rental in economic zones and hi-tech zones

.

Chapter I

GENERAL PROVISIONS

Article 1. Scopeof adjustment

This Circular provides guidance on certain contents about the collection of land use levy, land rental and water surface rental and implementation of transitional provisions in the Government s Decree No. 35/2017/ND-CP dated April 03, 2017 prescribing collection of land use levy, land rental and water surface rental in economic zones and hi-tech zones (herein after referred to as the “Decree No. 35/2017/ND-CP”).

Article 2.Subject of application

1. Organizations and individuals that are allocated or leased land or water surface in economic zones or hi-tech zones in accordance with the land law.

2. Management boards of economic zones and management boards of hi-tech zones.

3. Other relevant agencies, organizations and individuals.

Chapter II

SPECIFIC PROVISIONS

Section 1. COLLECTION OF LAND USE LEVY, LAND RENTAL AND WATER SURFACE RENTAL IN ECONOMIC ZONES

Article 3. Determination of land use levy and land rental not through auction

1. Leasing land with annual land rental payment:

a) The land rental unit shall be determined by multiplying a percentage (%) by the specific land price prescribed in Clause 1 Article 4 of the Decree No. 35/2017/ND-CP, in which:

- The Department of Finance of province or central-affiliated city where the economic zone is located shall take charge and cooperate with the management board of that economic zone and relevant agencies to set specific percentages (%) used for land rental calculation which are between 0.5% and 3% depending on the land location, area and route corresponding to each land use purpose, and then submit them to the People’s Committee of that province or central-affiliated city (hereinafter referred to as the “Provincial-level People’s Committee) for promulgation and announcement in the course of implementation.

- The specific land price is determined according to the land price adjustment coefficient method prescribed in the Government’s Decree on land price. The Department of Finance of province or central-affiliated city where the economic zone is located shall take charge and cooperate with the management board of that economic zone and relevant agencies to determine the land price adjustment coefficients depending on the land location, area and route corresponding to each land use purpose and in conformity with the market situation as well as local socio-economic development conditions, and then submit them to the Provincial-level People’s Committee for promulgation every year after consulting the Standing Committee of the People’s Council of same level and announcement in the course of implementation.

At several land locations used for implementing projects in the same area, if the land use coefficient of a route (building density or building height) varies from the average rate applicable to that area or route, the Provincial-level People s Committee shall set the land price adjustment coefficients which may be higher or lower than the average rate for calculating the land use rental in these case and specify them in the Decision on announcement of land price adjustment coefficients applicable to the relevant economic zone. Surveys shall be carried out to set land price adjustment coefficients as from October 01 every year. All expenses that arisen from land price surveys and determination of land price adjustment coefficients for land rental calculation (including expenses for hired consultants where necessary) shall be covered by funding from state budget in accordance with the Law on State Budget. Consultants for land price surveys and determination of land price adjustment coefficients shall be selected in accordance with regulations of the Law on Bidding.

b) Total land rental payable = the land rental unit x the land area subject to land rental.

In cases where the land rental is exempted in accordance with regulations in Point a, Point b, Point d Clause 6 Article 8 of the Decree No. 35/2017/ND-CP or there are deductions from total land rental payable according to the method of conversion into the period of fulfillment of financial obligation to pay the land rental, the land rental payable shall be determined according to the land policy and price effective at the time of starting payment of land rental, in which:

- Deductions from the land rental payable include: Compensations, relocation subsidies and compensation and ground clearance amounts (hereinafter referred to as the “compensation and ground clearance expenses”) which have been paid or voluntarily advanced by the land lessee.

- Time of starting payment of land rental is from the end of the period of enjoying exemption from the land rental and the period for which the financial obligation to pay the land rental is determined to be fully fulfilled because of deductions from the land rental payable in accordance with law. The land rental unit may not be adjusted while enjoying exemption from land rental and during the period for which the financial obligation to pay land rental is determined to be fully fulfilled.

- If the sum of the period of enjoying exemption from land rental as regulated by law and the period for which the financial obligation to pay the land rental is determined to be fully fulfilled because of deductions from the land rental payable is shorter than the length of time of the first stabilization cycle of land rental units, the land rental unit determined at the time of issuing the land lease decision shall be applied to the calculation of land rental for the remaining length of time of that cycle.

- After deducting the period of enjoying exemption from land rental as regulated by law and the period for which the financial obligation to pay the land rental is determined to be fully fulfilled because of deductions from the land rental payable, if the remainder of the land lease is under 05 years and the lessee wishes to fully pay the land rental for that remaining lease period, the management board of the economic zone shall submit report thereof to the Provincial-level People s Committee for consideration. In such case, the land price for calculation of land rental shall be determined according to the land policy and prices effective at the time when the Provincial-level People s Committee gives approval for the land lessee’s request for full payment of land rental for remaining land lease period. The land lessee shall be entitled to all land-related rights as leasing land with annual land rental payment.

c) The land rental unit shall be kept unchanged for 5 years counting from the time the management board of the economic zone or the Provincial-level People’s Committee issues the land lease decision. Past this five-year period, the management board of the economic zone may adjust land rental units for application to the subsequent period according to the land policy and prices effective at the time of adjustment by multiplying the land price in the land price table and the land price adjustment coefficient and the specific percentage (%) set by the Provincial-level People s Committee.

2. Leasing land with one-off land rental payment for the entire lease period:

a) In case the area of the land parcel or the land lot used for land rental calculation is valued (according to the land price in the land price table) at VND 30 billion or higher, the specific land price shall be determined according to the direct comparison, discount, income or surplus method in accordance with the Government’s regulations on land prices.

In case of exemption from land rental as regulated in Point a, Point b, Point d Clause 6 Article 8 of the Decree No. 35/2017/ND-CP, the Provincial Department of Natural Resources and Environment shall set specific land prices for calculation of land rental for the period for which land rental is payable based on the decision on period of exemption from land rental issued by the management board of the economic zone, and send them to the local land price appraisal council with the Provincial-level Finance Department acting as its standing body for appraisal and submission to the Provincial-level People’s Committee for approval in accordance with the Government’s regulations on land prices.

The period for which land rental is payable = the land lease period - the period of enjoying exemption from land rental as regulated in Point a, Point b, Point d Clause 6 Article 8 of the Decree No. 35/2017/ND-CP.

b) In case the area of the land parcel or the land lot used for land rental calculation is valued (according to the land price in the land price table) at less than VND 30 billion, the specific land price used for land rental calculation shall be determined by the management board of the economic zone according to the land price in the land price table, the land price adjustment coefficient and the land lease period. To be specific:

- In case the land lease period is equal to the period of the land category prescribed in the land price table, the land rental collected one-off for the entire land lease period shall be determined by multiplying the land price in the land price table by the land price adjustment coefficient.

- In case the land lease period is shorter than the period of the land category prescribed in the land price table, the land rental collected one-off for the entire land lease period shall be determined by adopting the following formula:

- In case of exemption from land rental, the land rental collected one-off for the entire land lease period shall be determined by adopting the following formula:

Where: The period for which land rental is payable = the land lease period - the period of enjoying exemption from land rental as regulated in Point a, Point b, Point d Clause 6 Article 8 of the Decree No. 35/2017/ND-CP.

c) Determination of land rental payable:

- If the compensation and ground clearance amounts are not deducted from land rental, the land rental payable shall be determined by multiplying the land rental unit by the area subject to land rental calculation.

- If the compensation and ground clearance amounts are deducted from land rental, the land rental payable shall be determined by subtracting the compensation and ground clearance amounts as regulated from the product of the land rental unit and the area subject to land rental calculation.

3. The determination of land use levy in the cases of land allocation with collection of land use levy, change of land use purpose or acquisition of land use rights in economic zones for implementing investment projects to construct commercial houses for sale or for combined sale and lease according to planning; and in the cases of residential land allocation, recognition of residential land use rights, permission for households and individuals to change the land use purpose to residential land in economic zones must comply with the Government’s regulations on the collection of land use levy and instructional documents.

4. After acquisition of land use rights for implementing investment projects in conformity with land use planning, if the transferee is required to apply for change of land use purpose and pay land use levy and/or land rental as prescribed by law, the amount of money paid for acquisition of land use rights shall be accounted in accordance with the Government s regulations on collection of land use levy, land rental and water surface rental, and instructional documents.

5. The area subject to land use levy or land rental payment is the area of land with land use levy or land rental specified in the land allocation or land lease decision. In case of land lease, if the land area specified in the land lease contract is larger than that specified in the land lease decision, the land area subject to land rental payment shall be the land area specified in the land lease contract.

Article 4. Determination of land use levy and land rental through auction

1. Leasing land with annual land rental payment:

a) The reserve price for auction of the rights to use leased land with annual land rental payment is the annual land rental unit which has been determined by the management board of the economic zone according to the land price in the land price table, the land price adjustment coefficient and specific percentages (%) set by the Provincial-level People s Committee, and approved after reaching agreement with the Provincial-level Finance Department. 

b) In case the lease period of the land lot or the land parcel for auction is shorter than the period of the land category of the same land use purpose prescribed in the land price table, the land price for determination of the reserve price for auction of land use rights shall be set by adopting the following formula:

c) The winning land rental unit shall be kept unchanged for 10 years. At the end of this period, the management board of the economic zone may adjust land rental units for application to the subsequent period according to the land policy and prices effective at the time of adjustment by multiplying the land price in the land price table and the land price adjustment coefficient and the specific percentage (%) set by the Provincial-level People s Committee. The land rental unit may be adjusted by 30% at most compared to the winning land rental unit or the land rental unit of the previous period.

2. In case of one-off collection of land use levy or land rental for the entire land lease period, the reserve price for auction of land use rights for lease shall be determined in accordance with regulations in Point b Clause 4 of the Decree No. 35/2017/ND-CP.

3. The land price adjustment coefficient and the specific percentage (%) for determination of the reserve price for auction of land use rights for lease mentioned in Clause 1 and Clause 2 of this Article shall be those announced by the Provincial-level People s Committee for application to calculation of land use levy or land rental in case of land allocation or land lease not through auction. If the land lot or the land parcel put for auction is located in an urban area, traffic center, or advantaged residential area, the Provincial-level Finance Department shall, together with the management board of the economic zone, base on the reality to request the Provincial-level People s Committee to make decision on increase of land price adjustment coefficients and specific percentages (%) to determine the reserve price for auction.

Article 5. Determination and collection of rental for land with water surface

1. Pursuant to regulations in Point b, Point c Clause 6 Article 4 of the Decree No. 35/2017/ND-CP, the Provincial-level Finance Department shall cooperate with the management board of the economic zone and relevant agencies to set specific levels for calculation of rental payable for land with water surface, and submit them to the Provincial-level People s Committee for announcement. To be specific:

a) In remote regions, mountainous regions, islands or regions facing social – economic difficulties or severely social – economic difficulties, the rental payable for the area of land with water surface used for agricultures, forestry, aquaculture or salt production, or construction of production and business facilities of a project in any of sectors eligible for investment incentives or special investment incentives shall be equal to 50% of land rental payable for an adjacent land area used for the same purpose.

b) For other cases which are not governed by regulations in Point a of this Clause, rental payable for land with water surface shall not be lower than 50% of land rental payable for an adjacent land area used for the same purpose.

2. If it is unable to determine the land area and the water surface area at the time the lease of land with water surface is approved by a competent authority because there are significant changes in water levels, the water surface area determined according to the average water level in year shall be used for calculation of rental for this area of land with water surface.

Article 6. Determination of rental for water surface

1. Based on the water surface rental bracket specified in Clause 1 Article 5 of the Decree No. 35/2017/ND-CP, the management board of the economic zone shall cooperate with the Provincial-level Finance Department to request the Provincial-level People’s Committees to make decision on water surface rental units for each project (excluding projects mentioned in Clause 3 of this Article), in which:

a) With regard to projects using fixed water surface as regulated in Point a Clause 1 Article 5 of the Decree No. 35/2017/ND-CP, the leased water surface serves fixed operation of the project at a specific location with identified location and coordinate of the water surface during the project period.

b) With regard to projects using unfixed water surface as regulated in Point b Clause 1 Article 5 of the Decree No. 35/2017/ND-CP, it is unable to determine the location and boundaries of the water surface within a specific coordinate for lease and the project’s operations are not performed at a fixed water surface location.

c) The leasing area of water surface for calculation of water surface rental is subject to the water surface lease decision issued by a competent authority in accordance with law.

d) The water surface rental is payable from the effective time of the water surface lease decision issued by a competent authority in accordance with law.

2. Rental for water surface payable is determined as follows:

a) In case of lease of water surface with annual rental payment, the rental for water surface payable is determined by multiplying the leasing area of water surface by the water surface rental unit.

b) In case of lease of water surface with one-off water surface rental payment for the entire lease period, the rental for water surface payable is the product of the leasing area of water surface and the lease period and the water surface rental unit.

3. For petroleum exploration and extraction projects in economic zones (if any), rental for water surface shall be paid in accordance with regulations of the law on collection of rental for water surface (sea surface) with respect to petroleum exploration and extraction activities.

Article 7. Management and collection of land use levy, land rental, water surface rental and refundable compensation and ground clearance amounts

1. The management board of the economic zone shall determine the payable amount of money and notify it to the land user using the template of notice enclosed with the Circular No. 76/2014/TT-BTC dated June 16, 2014 or the Circular No. 77/2014/TT-BTC dated June 16, 2014 by the Ministry of Finance, and concurrently send the notice to:

a) The land registration office for coordination and reporting to the state authority competent to grant certificates of land use rights and ownership of houses and other land-attached assets;

b) The tax agency for management and determining the late-payment interests or applying coercive measures to collect money in accordance with the law on tax administration.

2. Time limits for payment of land use levy, land rental, water surface rental and refundable compensation and ground clearance amounts shall conform to regulations in Point c Clause 1 Article 6, Clause 3 Article 11 of the Decree No. 35/2017/ND-CP.

In case of lease of land or water surface with annual rental payment but the first leasing year or the final leasing year is not enough 12 months, the rental in the first leasing year or the final leasing year shall be calculated and paid according to actual number of leasing months. In case the first leasing month or the final leasing month is not a full month:

- It shall be considered as a full leasing month if total leasing days are 15 days or more.

- The rental must not be paid if total leasing days are less than 15 days.

3. The state treasury or the unit authorized by the state treasury to collect land use levy, land rental, water surface rental and payable compensation and ground clearance amounts must transfer all collection vouchers to the management board of the economic zone and the tax agency for monitoring, collating and expediting collections as regulated.

Finance agencies, state treasuries and tax agencies at all levels shall cooperate and instruct management boards of economic zones in determining and notifying land-related collections in timely and sufficient manner.

Article 8. Principles of exemption and reduction of land rental and water surface rental

1. An investment project using land shall be eligible for consideration for exemption or reduction of land rental and/or water surface rental if it is established, appraised and approved in accordance with law.

2. An investment project shall have land rental or water surface rental exempted or reduced in cases the lease of land is approved by a competent authority for the first time for implementing the project or have the land lease period extended in accordance with the land law.

3. An organization or individual that is leased land or water surface by the management board of the economic zone may enjoy exemption or reduction of rental only after completing procedures for requesting rental exemption or reduction. To be specific:

a) If a lessee of land or water surface is eligible for exemption or reduction of rental but fails to carry out procedures for requesting rental exemption or reduction, it/he/she must pay the land rental or water surface rental in accordance with law. If the procedures for requesting land rental exemption or reduction are carried out late, no land rental or water surface rental shall be exempted or reduced for the late period.

b) If an application for rental exemption or reduction is submitted when the prescribed incentive period ends as regulated in the Decree No. 35/2017/ND-CP, no land rental or water surface rental shall be exempted or reduced. If it is submitted while rental exemption and reduction incentives still remain valid, land rental or water surface rental shall be only exempted or reduced for the remaining incentive period as from the receipt of a valid application.

4. An operating project that has been making annual payment of land rental and/or water surface rental before the date of entry into force of the Decree No. 35/2017/ND-CP shall not be eligible to enjoy rental exemption and reduction. If it is eligible to apply for enjoyment of rental exemption and reduction in accordance with the Decree No. 35/2017/ND-CP, land rental or water surface rental may be exempted or reduced for the remaining incentive period (if any) as from the receipt of the investor s valid application for enjoyment of rental exemption and reduction. This regulation shall not apply to investment projects that are prescribed in Point c, Point d Clause 2 Article 15 of the Law on Investment in 2014 and use land leased by the Government before July 01, 2015 (i.e. the effective date of the Law on Investment in 2014).

5. If an operating project is enjoying exemption or reduction of land rental or water surface rental as regulated by law before the effective date of the Decree No. 35/2017/ND-CP at incentive levels lower than those prescribed in Clause 6 Article 8 of the Decree No. 35/2017/ND-CP, the project investor may apply for enjoying incentive levels prescribed in this Decree for the remaining land lease period. The remaining land lease period for which land rental is exempted or reduced shall be determined by subtracting the period for which rental has been exempted or reduced as regulated by law before the effective date of the Decree No. 35/2017/ND-CP from the incentive period prescribed in the Decree No. 35/2017/ND-CP. This regulation shall not apply to investment projects that are prescribed in Point c, Point d Clause 2 Article 15 of the Law on Investment in 2014 and use land leased by the Government before July 01, 2015 (i.e. the effective date of the Law on Investment in 2014).

6. Operating projects prescribed in Clause 4 and Clause 5 of this Article are investment projects that have been granted investment certificates, investment licenses, certificates of investment registration or decisions on approval for investment proposal (excluding cases where these documents are not required under the law on investment) and use land under unexpired land lease contracts in accordance with law.

Article 9. Exemption or reduction of land use levy or land rental in certain cases

1. Exemption and reduction of land use levies in economic zones shall be given in accordance with regulations in Article 7 of the Decree No. 35/2017/ND-CP; the exempted or reduced amount of land use levy shall be determined by the management board of the economic zone in accordance with the Government s regulations on collection of land use levies, and specified in decision on exemption or reduction of land use levy which is issued using the template stated in the Circular No. 76/2014/TT-BTC.

2. Exemption from land rental during capital construction period:

a) Based on the application for exemption or reduction of land rental submitted by the land lessee in accordance with Point a Clause 11 Article 8 of the Decree No. 35/2017/ND-CP, the management board of the economic zone shall cooperate with relevant agencies (where necessary) to determine the capital construction period and issue decision on land rental exemption to each investment project provided that the exemption period shall not exceed 03 years from the issued date of the land lease decision.

The management board of the economic zone may base on the initial investment certificate, investment license, investment registration certificate or decision on approval for investment proposal which is issued by a competent authority in accordance with law and specifies the capital construction period (the project implementation progress) to issue decision on land rental exemption to the investment project provided that the exemption period shall not exceed 03 years from the issued date of the land lease decision.

b) If the land lessee fails to submit an application for land rental exemption during the capital construction period, land rental shall be exempted in accordance with the law on investment from the issued date of the land lease decision. If the lessee submits an application for land rental exemption later than the prescribed deadline under the law on investment, land rental shall be exempted for the remaining incentive period (if any) from the receipt of a valid application for land rental exemption by the management board of the economic zone and shall not be exempted for the late period.

c) Exemption or reduction of land rental or water surface rental during the capital construction period shall be given to each investment project associated with new land lease or change from land allocation without collection of land use levy into land lease, excluding investment projects to upgrade or expand production and business establishments.

3. The amount of land rental to be exempted or reduced as prescribed in Clause 6 Article 8 of the Decree No. 35/2017/ND-CP shall be determined in accordance with the Government’s regulations on collection of land rental and water surface rental, and specified in decision on land rental exemption and reduction which is issued using the template stated in the Circular No. 77/2014/TT-BTC.

Section 2. COLLECTION OF LAND RENTAL AND WATER SURFACE RENTAL IN HI-TECH ZONES

Article 10. Determination of land rental and water surface rental

1. Leasing land with annual land rental payment:

Based on specific percentages (%), land price adjustment coefficients and land price table promulgated by the Provincial-level People s Committee in accordance with Clause 1 Article 12 of the Decree No. 35/2017/ND-CP, management boards of hi-tech zones shall determine land rental or adjust land rental units in accordance with Clause 1 Article 12 of the Decree No. 35/2017/ND-CP and regulations in Clause 1 Article 3 herein.

With respect to a centrally-managed hi-tech zone using land allocated under the land allocation decision issued by the Provincial-level People’s Committee before July 01, 2014, the specific percentage (%) and land price adjustment coefficient shall be set by the management board of that hi-tech zone after obtaining the consent from the People’s Committee of the province or city where that hi-tech zone is located, and applied from January 01 every year, in which:

- Specific percentages (%) for calculating land rental units range between 0.5% and 3% depending on each land area and route corresponding to each investment sector and shall be publicly and annually announced in course of implementation.

- Land price adjustment coefficients shall be annually announced for each land area, route and location corresponding to each land use purpose provided, that they shall not be below 1.0, and applied from January 01 every year.

2. Leasing land with one-off land rental payment for the entire lease period:

a) Determination of land rental in case of lease of land with one-off land rental payment for the entire lease period for non-agricultural production and business purpose (except land used for commercial and service purposes or construction of commercial houses and offices for lease) shall be carried out in accordance with Clause 2 Article 12 of the Decree No. 35/2017/ND-CP and regulations in Clause 2 Article 3 herein.

b) Determination of land rental in case of lease of land with one-off land rental payment for the entire lease period to serve commercial and service purposes or construction of commercial houses and offices for lease in a hi-tech zone shall be carried out in accordance with the following provisions.

- In case the area of the land parcel or the land lot used for land rental calculation is valued (according to the land price in the land price table) at VND 30 billion or higher, the specific land price for land rental calculation shall be determined in accordance with regulations in Point a Clause 3 Article 4 of the Decree No. 35/2017/ND-CP and Clause 2 Article 3 of this Circular provided that such land parcel or land lot is located in a hi-tech zone under the management of local government.

With respect to the land parcel or the land lot located in a hi-tech zone under the management of the central government, the management board of that hi-tech zone shall, based on the Government’s regulations on land prices, make a land price plan for the land lease period for which land rental is payable (after deducting the period for which land rental is exempted (if any) in accordance with regulations in Clause 3 Article 14 of the Decree No. 35/2017/ND-CP), and send it to the land price appraisal council of the province or city where that hi-tech zone is located for appraisal and reaching an agreement with the Provincial-level People s Committee before total land rental payable is determined and notified to the land lessee.

- In case the area of the land parcel or the land lot used for land rental calculation is valued (according to the land price in the land price table) at less than VND 30 billion, the management board of that hi-tech zone shall determine the land price for calculating land rental in accordance with regulations in Point b Clause 3 Article 4 of the Decree No. 35/2017/ND-CP and Clause 2 Article 3 of this Circular.

c) Determination of land rental in case of lease of land with one-off land rental payment for the entire land lease period in Hoa Lac Hi-tech Park shall be carried out in accordance with regulations in Clause 2 Article 8 of the Government s Decree No. 74/2017/ND-CP dated June 20, 2017 on special policies for Hoa Lac Hi-tech Park (hereinafter referred to the “Decree No. 74/2017/ND-CP”) and Clause 2 Article 12 of the Decree No. 35/2017/ND-CP.

Article 11. Management, collection, exemption and reduction of land rental and water surface rental

Management, collection, exemption and reduction of land rental and water surface rental shall be carried out in accordance with regulations in Article 14 and Article 15 of the Decree No. 35/2017/ND-CP and Article 7, Article 8 and Article 9 herein. Particularly, collection, transfer and use of land rental and refundable compensation and ground clearance amounts in Hoa Lac Hi-tech Park shall be carried out in accordance with regulations in Clause 1 Article 17 of the Decree No. 74/2017/ND-CP.

Article 12. Transitional provisions

1. In case of lease of land with annual land rental payment from the Government in economic zones or hi- tech zones before the effective date of the Decree No. 35/2017/ND-CP during the stabilization period of land rental units, if land rental units are higher than those prescribed in Article 4 and Article 12 of the Decree No. 35/2017/ND-CP, such land rental units shall be adjusted in accordance with this Decree and adjusted land rental units shall be applied for remaining period as from January 01, 2017.

2. In cases where land is leased with annual land rental payment in economic zones or hi-tech zones before January 01, 2006 and properly used according to the land use purpose specified in the land lease decision or the land lease contract made by a competent authority, the adjustment of land rental units for remaining period as from January 01, 2016 shall be carried out in accordance with regulations in Clause 8 Article 15 of the Decree No. 46/2014/ND-CP (which has been amended in Clause 4 Article 3 of the Decree No. 135/2016/ND-CP) and Article 4 of the Circular No. 333/2016/TT-BTC dated December 26, 2016 by the Ministry of Finance.

3. In case land in an economic zone or a hi-tech zone has been being used before the effective date of the Decree No. 35/2017/ND-CP but the land lease decision is still not yet issued and land rental is not paid because regulations on land policy and price for calculation of rental for land in that economic zone or hi-tech zone are not available, if the land user is eligible to enjoy exemption from land rental in accordance with regulations in Clause 6 Article 8 and Clause 2, Clause 3 Article 13 of the Decree No. 35/2017/ND-CP, the land rental shall be exempted from the time of actually taking delivery of land but compensation and ground clearance amounts must not be refunded as regulated in Clause 1 Article 6, Clause 1 Article 13 of the Decree No. 35/2017/ND-CP for the period from actual delivery of land to the issued date of the land lease decision. The land lessee must pay the remainder of refundable compensation and ground clearance amounts to state budget in accordance with law.

Refundable compensation and ground clearance amounts for the period from actual delivery of land to the issued date of the land lease decision shall be multiplying the quotient of the refundable compensation and ground clearance amounts as prescribed in Clause 1 Article 6, Clause 1 Article 13 of the Decree No. 35/2017/ND-CP and the land lease period by the period from actual delivery of land to the issued date of the land lease decision.

4. Applications for determination of financial obligations to pay land use levy, land rental or water surface rental or applications for exemption or reduction of land use levy, land rental or water surface rental that have been submitted before the effective date of the Decree No. 35/2017/ND-CP shall be processed by receiving authorities in accordance with law. Applications that are submitted at or after the effective date of the Decree No. 35/2017/ND-CP shall be processed by management boards of economic zones or hi-tech zones in accordance with the Decree No. 35/2017/ND-CP.

5. In cases where land is leased with annual land rental payment and land rental units adjusted before the effective date of the Decree No. 35/2017/ND-CP are not yet applied, tax agency shall take charge of adjustment of land rental units and send documents of such cases to management boards of economic zones or hi-tech zones for monitoring and applying adjusted land rental units in the following cycle.

6. In case of lease of land in an economic zone with annual land rental payment before January 01, 2006 but the tax agency still fails to adjust land rental in accordance with the Decree No. 135/2016/ND-CP by the effective date of the Decree No. 35/2017/ND-CP, the tax agency shall take charge of adjusting land rental in accordance with the Decree No. 135/2016/ND-CP.

7. Applications for refunding of compensation and ground clearance amounts or applications for determination of reserve prices for auction of land use rights which have been submitted to finance agencies before the effective date of the Decree No. 35/2017/ND-CP shall be processed by such finance agencies in accordance with law. Applications that are submitted at or after the effective date of the Decree No. 35/2017/ND-CP shall be processed by management boards of economic zones or hi-tech zones in accordance with the Decree No. 35/2017/ND-CP.

Chapter III

IMPLEMENTATION PROVISIONS

Article 13.Effect

1. This Circular takes effect on October 06, 2017.

2. Any difficulties arising in the course of implementation of this Circular should be promptly reported to the Ministry of Finance for consideration./.

For t he Minister

The Deputy Minister

Huynh Quang Hai