Circular No. 94/2011/TT-BTC dated June 29, 2011 of the Ministry of Finance amending and supplementing the Finance Ministry’s Circular No. 120/2005/TT-BTC of December 30, 2005, guiding the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land rents and water surface rents

COLLECTION OF LAND RENTS IS 1,5% LAND PRICE ON USING PURPOSE

On June 26, 2911, the Ministry of Finance issued the Circular No. 94/2011/TT-BTC amending and supplementing the Finance Ministry’s Circular No. 120/2005/TT-BTC of December 30, 2005, guiding the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land rents and water surface rents

For cases of land rent with annual rent payment, the annual land rent rate is 1.5% of the land price based on the use purpose of the rented land which is prescribed, or decided under Point 1.6 of this Clause, by provincial-level People’s Committees.  For land in urban areas, trade or service centers, traffic hubs or populous areas, which can yield special profits or be used as ground for production, business, trade or service activities, provincial-level People’s Committees shall, based on the local situation, decide on the percentage for calculating the land rent rate which must not exceed two (2) times the rate.

For land rent to be paid in lump sum for the whole rent duration, the payable land rent amount is equal to the payable land use levy amount for land allocation with land use levy payment for the same use purpose and land use duration.

A domestic organization or individual; an overseas Vietnamese; or a foreign organization or individual renting land from the State that advances funds for compensation, support, resettlement and organization of compensation and ground clearance under an approved plan may have the whole advanced amount refunded with the state budget by having this amount cleared against the payable land rent. In case the amount advanced for compensation, support, resettlement and organization of compensation and ground clearance under the approved plan exceeds the payable land rent, the cleared amount is equal to the payable land rent amount. The remaining amount may be accounted as investment expenses of the project. The cleared amount may not be accounted as investment expenses of the project. In case of land rent with annual rent payment, the amount advanced (if any) for compensation, support, resettlement and organization of compensation and ground clearance under the approved plan may be cleared against the payable land rent converted into the corresponding land rent payment time at the rate applicable at the time of determining the first payable land rent amount which is determined as the time of completing the annual land rent.

When using land, if a land lessee changes the land use purpose from that indicated in the land lease contract, he/she/it shall request the natural resources and environment agency to modify the land lease contract. Based on the modified contract, the tax agency shall re-determine the land rent corresponding to the use purpose of the rented land under regulations.