Decree No. 123/2017/ND-CP dated November 14, 2017 of the Government on amending and supplementing a number of articles of the Decrees on collection of land use levy, land rental and water surface rental

DECREE

Amending and supplementing a number of articles of the Decrees on collection of land use levy, land rental and water surface rental[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the November 29, 2013 Land Law;

Pursuant to the November 25, 2014 Housing Law;

Pursuant to the November 26, 2014 Law on Investment;

At the proposal of the Minister of Finance;

The Government promulgates the Decree amending and supplementing a number of articles of the Decrees on collection of land use levy, land rental and water surface rental.

Article 1.Scope of regulation

This Decree amends and supplements a number of articles of Decree No. 45/2014/ND-CP of May 15, 2014, on collection of land use levy, and Decree No. 46/2014/ND-CP of May 15, 2014, on collection of land rental and water surface rental.

Article 2.To amend and supplement a number of articles of Decree No. 45/2014/ND-CP of May 15, 2014, on collection of land use levy

1. To add the following Point d to Clause 3, Article 3:

“d/ The People’s Committee of a province or centrally run city (below referred to as provincial-level People’s Committee) shall promulgate the land price adjustment coefficient for application from January 1 every year. Surveys to formulate the land price adjustment coefficient shall be conducted from October 1 every year. Expenses related to the formulation of the land price adjustment coefficient (including the expense for hiring a consultancy organization when necessary) shall be covered by the state budget in accordance with the law on the state budget. The selection of consultancy organizations to conduct surveys and formulate land price adjustment coefficients must comply with the bidding law.

If the provincial-level People’s Committee has not yet promulgated the land price adjustment coefficient under regulations by the time of determination of land use levy, the previous year’s land price adjustment coefficient shall be used to determine payable land use levy, and the provincial-level People’s Committee shall take responsibility for any loss of state budget revenue due to its late promulgation of the land price adjustment coefficient.”

2. To amend Point c, Clause 4 of, and add Clause 5 to, Article 4 as follows:

“c/ The unit rate of land rental used to determine payable land use levy under Points a and b of this Clause shall be determined based on the land price in the land price table as suitable to the land use purpose of the project, the land price adjustment coefficient for land use levy calculation, and the percentage (%) used to calculate the unit rate of land rental applicable to land used for commercial or service purposes promulgated by the provincial-level People’s Committee.

5. Order and procedures for determining the reserve price for auction of land use rights for allocation of land with land use levy

a/ The order and procedures for determining the reserve price for auction of land use rights in case the area subject to land use levy of the land parcel or land plot is valued (according to 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, must comply with the Government’s regulations on land prices and amendments and supplements thereto (if any); the provincial-level Department of Natural Resources and Environment shall determine specific land prices and submit them to the local land price appraisal council with the provincial-level Department of Finance acting as the standing body for appraisal and submission to the provincial-level People’s Committee for approval.

b/ The order and procedures for determining the reserve price for auction of land use rights in case the area subject to land use levy of the land parcel or land plot is valued (according to 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, are prescribed below:

- Within 10 days from the date a competent state agency issues an auction decision in accordance with the land law, the natural resources and environment agency shall send a dossier to request determination of the reserve price for auction of land use rights to the same-level finance agency. Such a dossier must comprise:

+ A written request for determination of the reserve price, made by the natural resources and environment agency: 1 original;

+ The decision on auction of land use rights issued by a competent state agency: 1 copy;

+ The cadastral dossier (containing information on the land area, location, land use purpose, form of land lease, land use term, etc.): 1 copy.

- Within 10 days after receiving a dossier for determination of the reserve price for auction of land use rights from the natural resources and environment agency, the finance agency shall determine the reserve price in accordance with regulations on collection of land use levy, and submit it to a competent state agency (provincial-level People’s Committee or decentralized or authorized state agency) for approval under regulations.

If the grounds for determining the reserve price are insufficient, within 5 working days after receiving the dossier, the finance agency shall send a written request for supplementation of the dossier to the natural resources and environment agency. Within 10 days after receiving a complete dossier, the finance agency shall complete the determination of the reserve price.

- Pursuant to the competent state agency’s decision approving the reserve price, the unit assigned to auction land use rights shall organize an auction in accordance with law.

The order and procedures for re-determining the reserve price are the same as those for initial determination of the reserve price.

c/ The order and procedures for determining the reserve price for auction of use rights of land areas with state-owned assets built thereon must comply with the law on management and use of public assets.”

3. To amend Clause 3 of, and add Clause 4 to, Article 5 as follows:

“3. In case of changing non-agricultural production and business land (other than residential land) which was originally residential land of households or individuals to residential land for implementation of investment projects on or after July 1, 2014, the payable land use levy will be the difference between the land use levy calculated under the approved detailed construction plan of such a project and the land use levy calculated under the detailed plan on construction of houses of households or individuals at the time the change is approved by a competent
state agency.

Households or individuals that change their non-agricultural production and business land (other than residential land) which was originally residential land to residential land are not required to pay land use levy.

4. In case of changing non-agricultural production and business land (other than residential land) with a stable and long use term which was allocated by the State with land use levy before July 1, 2004, to residential land for implementation of investment projects on or after July 1, 2014, the payable land use levy will be the difference between the land use levy calculated based on the residential land price and the land use levy calculated based on the land price for one-off land rental payment for the entire lease term for non-agricultural production and business (commercial or service) land for a term of 70 years at the time the change is approved by a competent state agency.

4. To amend Article 9 as follows:

“Article 9. Collection of land use levy upon recognition of land use rights (grant of certificates) for households and individuals for residential land which was allocatedultra viresor in violation of the land law between July 1, 2004, and before July 1, 2014, and for which the State now considers permitting the grant of certificates

1. Households and individuals that use land which was regarded as violating the land law under Article 22 of the Government’s Decree No. 43/2014/ND-CP of May 15, 2014, detailing a number of articles of the Land Law (below referred to as Decree No. 43/2014/ND-CP) or land that was allocated or leasedultra viresbetween July 1, 2004, and before July 1, 2014, but now becomes conformable with the land use master plan, shall, when being granted certificates by a competent state agency under Clause 9, Article 210 of the Land Law, pay 100% of land use levy calculated based on the land price specified at Point b or c, Clause 3, Article 3 of this Decree at the time the competent state agency issues the decision on recognition of their land use rights. If households and individuals have papers proving their payment of money for the use of such land under regulations, they will have the paid money amount subtracted from the payable land use levy, with the subtracted amount not exceeding the payable land use levy.

2. Users of land with non-residential construction works built thereon shall, when being granted  certificates of the rights to use non-agricultural production and business land in the same way as allocation of land with land use levy for a long term, pay 100% of land use levy calculated based on the land price specified at Point b or c, Clause 3, Article 3 of this Decree applicable to non-agricultural production and business land with the longest use term as prescribed in Clause 3, Article 126 of the Land Law, at the time the competent state agency issues the decision on recognition of their land use rights.”

5. To add the following Clause 10 to Article 10:

“10. For economic organizations that are allocated by the State non-agricultural production and business land with land use levy, have fully paid land use levy, and are entitled to land use levy exemption or reduction under a competent state agency’s decision in accordance with the land law before July 1, 2014, when transferring projects or land use rights on or after July 1, 2014:

a/ In case of transferring an investment project together with land use rights:

- If the exempted or reduced land use levy is not included in the transfer price and the transferee continues implementing the project, he/she/it shall continue to be entitled to land use levy exemption or reduction under the investment law for the remaining duration of the project;

- If the transferee does not continue implementing the project, he/she/it shall pay land use levy under regulations for the project after the transfer. If the transferor has performed part of the land-related financial obligation, the transferee may inherit such part.

b/ In case of transferring land use rights, the transferor shall fully pay the exempted or reduced land use levy amount into the state budget, which is calculated based on the land price applicable at the time of transfer.”

6. To add the following Article 13a:

“Article 13a. Order and procedures for land use levy exemption or reduction for social housing projects and cemetery infrastructure investment projects

1. Within 20 days from the date a competent state agency issues a land allocation decision under the land law, the land user shall submit a dossier for land use levy exemption or reduction to the managing tax agency or agency receiving dossiers for settlement of land-related administrative procedures as defined in Decree No. 43/2014/ND-CP. If the dossier is submitted to the latter, it shall be forwarded to the tax agency under regulations on the order and procedures for receiving and forwarding dossiers for determination of land-related financial obligations of land users.

2. Within 20 days after receiving a complete and valid dossier prescribed in Clause 3 of this Article, the tax agency shall consider and issue a land use levy exemption or reduction decision under regulations or issue a notice of ineligibility for land use levy exemption or reduction due to lack of prescribed conditions.

3. Dossiers for land use levy exemption or reduction for social housing projects or cemetery infrastructure investment projects

a/ A dossier for land use levy exemption for a social housing project invested under Clause 1, Article 53 of the 2014 Housing Law must comprise:

- A written request for land use levy exemption (stating the allocated land area and reason for exemption): 1 original;

- A competent state agency’s decision on or written approval of investment in the project: 1 copy;

- A competent state agency’s land allocation decision: 1 copy.

b/ A dossier for land use levy exemption for a social housing project invested under Clause 2, Article 53 of the 2014 Housing Law must comprise:

- A written request for land use levy exemption (stating the allocated land area and reason for exemption): 1 original;

- A competent state agency’s decision on or written approval of investment in the project: 1 copy;

- A competent state agency’s land allocation decision: 1 copy;

- A list of the enterprise’s or cooperative’s employees eligible to move in the social houses, certified by a competent state agency under the housing law: 1 copy;

- The enterprise’s or cooperative’s commitment that the house rental rate is not higher than the rental rate promulgated by the provincial-level People’s Committee under the housing law, certified by a competent state agency: 1 original.

c/ A dossier for land use levy exemption for a social housing project invested under Clause 3, Article 53 of the 2014 Housing Law must comprise:

- A written request for land use levy exemption (stating the lawful residential land area and reason for exemption): 1 original;

- A competent state agency’s decision on or written approval of investment in the project: 1 copy;

- Papers required under the land law to prove the lawful residential land area for social housing construction: 1 copy.

d/ A dossier for land use levy exemption or reduction for a cemetery infrastructure investment project must comprise:

- A written request for land use levy exemption or reduction (stating the allocated land area and reason for exemption or reduction): 1 original;

- The investment certificate, investment license, investment registration certificate or investment policy decision (unless the applicant is exempted from such certificate, license or decision): 1 copy;

- The investment project approved under the investment law (unless the applicant is granted an investment certificate, investment license, investment registration certificate or investment policy decision under the investment law): 1 copy;

- The project approval decision under law: 1 copy;

- A competent state agency’s land allocation decision: 1 copy.”

7. To amend Clause 5, Article 14 as follows:

“5. If there is any change in land use levy calculation bases, the tax agency shall re-determine the payable land use levy and notify it to the person concerned.

If the land user has fulfilled the financial obligation related to land use levy and requests adjustment of the detailed construction plan under which he/she/it has a new land-related financial obligation (if any), he/she/it shall pay an additional land use levy into the state budget.

If the land user has not yet fulfilled the financial obligation related to land use levy and requests adjustment of the detailed construction plan under which he/she/it has a new land-related financial obligation (if any), he/she/it shall:

- Fully pay the land use levy determined under the original detailed construction plan and a late-payment interest as prescribed by law;

- Pay an additional land use levy being the difference between the payable land use levy under the original construction plan and that under the adjusted construction plan determined at the time when the adjustment is  approved (if any).”

8. To add the following Articles 14a and 14b:

“Article 14a. Order and procedures for refund of the paid land use levy or the paid amount for transferred land use rights or subtraction thereof from financial obligations of owners of social housing projects

1. The owner of a social housing project shall submit a dossier for refund of the paid land use levy or the paid amount for transferred land use rights or subtraction thereof from his/her/its financial obligation to the provincial-level Department of Finance of the locality where the project is implemented.

2. Dossier for refund or subtraction of the paid land use levy or the paid amount for transferred land use rights upon implementation of social housing projects

a/ For a social housing project invested under Clause 1, Article 53 of the 2014 Housing Law, a dossier must comprise:

- A written request for refund or subtraction: 1 original;

- A competent state agency’s decision on or written approval of investment in the project: 1 copy;

- The contract or paper on transferred land use rights as prescribed by law at the time of transfer: 1 copy;

- The paper or invoice proving the payment to the state budget upon land allocation or land lease by the State or the paper on land use rights acquired from another organization, household or individual with regard to the land area used for social housing construction: 1 copy.

b/ For a social housing project invested under Clause 2, Article 53 of the 2014 Housing Law, a dossier must comprise:

- A written request for refund or subtraction: 1 original;

- A competent state agency’s decision on or written approval of investment in the project: 1 copy;

- A list of the enterprise’s or cooperative’s employees eligible to move in the social houses, certified by a competent state agency under the housing law: 1 copy;

- The contract or paper on transferred land use rights as prescribed by law at the time of transfer: 1 copy;

- The paper or invoice proving the payment to the state budget upon land allocation or land lease by the State or the paper on land use rights acquired from another organization, household or individual with regard to land areas used for social housing construction: 1 copy.

3. Time limit for refund or subtraction of the paid land use levy or the paid money amount for transferred land use rights

a/ Within 20 days after receiving a complete and valid dossier from the social housing project owner as prescribed in Clause 2 of this Article, the provincial-level Department of Finance shall check and report to the provincial-level People’s Committee for consideration and decision the refund of the paid land use levy or the paid money amount for transferred land use rights or subtraction thereof from financial obligations of the project owner.

b/ Within 10 days from the date the provincial-level People’s Committee issues a written approval of the refund of the paid land use levy or the paid money amount for transferred land use rights or subtraction thereof from financial obligations of the social housing project owner, the provincial-level Department of Finance shall send a written notice to the local Tax Department and State Treasury office for compliance.

Article 14b.Order and procedures for determination of payable land use levy when purchasers or rent-purchasers of social houses sell or transfer such houses

1. When a purchaser or rent-purchaser of a social house wishes to sell such house, he/she shall send a written request and dossier prescribed in Clause 2 of this Article to the land registry.

2. A dossier for determination of payable land use levy upon sale of a social house must comprise:

a/ A written request for determination of payable land use levy upon house sale, made by the house purchaser or rent-purchaser: 1 original.

b/ The contract on house purchase and sale: 1 copy.

c/ The certificate of land use rights and ownership of houses and land-attached assets under the land law (if any) or papers and dossiers on the house purchase under the housing law: 1 copy.

3. The land registry shall make a slip of information transfer for determination of land-related financial obligations and send it to the tax agency directly managing the social-house purchaser or rent-purchaser, enclosed with the dossier made by the social-house purchaser or rent-purchaser under Clause 2 of this Article, for determination of payable land use levy upon the house sale or transfer.

The slip of information transfer for determination of land-related financial obligations of the social house purchaser or rent-purchaser shall be under regulations on dossiers, order and procedures for receipt and transfer of dossiers for determination of land-related financial obligations of land users.

4. Within 20 days after receiving a complete and valid dossier, the tax agency shall determine payable land use levy under regulations on sale of social houses. The issuance of a notice of payment of land use levy and the collection of land use levy must comply with law.”

9. To amend Clauses 2 and 3, Article 15 as follows:

“2. In case a person is allocated land by the State not through auction of land use rights and voluntarily advances a money amount for ground clearance compensation under the approved plan, he/she will have the advanced amount subtracted from payable land use levy determined under such plan, with the subtracted amount not exceeding the payable land use levy. The remaining ground clearance compensation amount (if any), after subtracting the payable land use levy, shall be included in the project’s investment capital.

A dossier for subtraction of advanced ground clearance compensation money must comprise:

- The compensation and ground clearance plan approved by a competent state agency: 1 copy;

- Documents on and list of payments made for ground clearance compensation: 1 original.

3. In case an investment project is allocated land by the State not through auction in different forms, including allocation with land use levy, allocation without land use levy, and land lease, and the investor voluntarily advances a money amount for ground clearance compensation under the approved plan, the subtraction of advanced ground clearance compensation money shall be based on each type of land area, with the ground clearance compensation amount paid for the land area used for public purposes equally distributed for corresponding land areas.”

10.The Minister of Finance shall guide in detail this Article.

Article 3.To amend and supplement a number of articles of Decree No. 46/2014/ND-CP of May 15, 2014, on collection of land rental and water surface rental

1. To amend Point a, Clause 4, and Clauses 5 and 6, Article 4 as follows:

“4. Specific land prices determined by the direct comparison, subtraction, income-based and surplus-based methods prescribed in the Government’s Decree on land prices shall be applied in the following cases:

a/ Determination of the unit rate of land rental with annual rental payment for the first stabilization period of such unit rate in case the leased land is used for commercial, service, real estate business or mining purpose; determination of the unit rate of land rental with one-off rental payment for the entire lease term not through auction; determination of the unit rate of land rental in case of change from annual rental payment to one-off rental payment for the entire lease term under Clause 2, Article 172 of the Land Law; determination of the unit rate of land rental upon transfer of assets attached to leased land under Clause 3, Article 189 of the Land Law; and determination of the unit rate of land rental with annual rental payment and the unit rate of land rental with one-off rental payment for the entire lease term upon equitization of state enterprises shall be applied in case the area used to calculate land rental of the land parcel or land plot is valued (according to 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.

5. Specific land prices determined by the land price adjustment coefficient method prescribed in the Government’s Decree on land prices shall be applied in the following cases:

a/ Determination of the unit rate of land rental with annual rental payment in case the leased land is used for commercial, service, real estate business or mining purpose; determination of the unit rate of land rental with one-off rental payment for the entire lease term not through auction; determination of the unit rate of land rental in case of change from annual rental payment to one-off rental payment for the entire lease term under Clause 2, Article 172 of the Land Law; determination of the unit rate of land rental upon transfer of assets attached to leased land under Clause 3, Article 189 of the Land Law; and determination of the unit rate of land rental with annual rental payment and the unit rate of land rental with one-off rental payment for the entire lease period upon equitization of state enterprises shall be applied in case the area used to calculate land rental of the land parcel or land plot is valued (according to 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.

b/ Determination of the unit rate of land rental with annual rental payment for the subsequent stabilization period of such unit rate for the land parcel or land plot leased by the State for commercial, service, real estate business or mining purpose, which is valued (according to 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.

c/ Determination of the unit rate of land rental with annual rental payment (except the case of renting land for commercial, service, real estate business or mining purpose).

d/ Determination of the reserve price for auction of land use rights for lease of land with annual rental payment.

Annually, the provincial-level People’s Committee shall prescribe land price adjustment coefficients to be applied to the cases prescribed in this Clause.

Land price adjustment coefficients promulgated by the provincial-level People’s Committee shall be applied from January 1 every year. Surveys to formulate land price adjustment coefficients shall be conducted from October 1 every year. Expenses related to the formulation of land price adjustment coefficients for calculation of land rental (including expenses for hiring consultancy organizations when necessary) shall be covered by the state budget under the law on the state budget. The selection of consultancy organizations to conduct surveys and formulate land price adjustment coefficients must comply with the bidding law.

If the provincial-level People’s Committee has not yet promulgated the land price adjustment coefficient under regulations by the time of determination or adjustment of the unit rate of land rental, the previous year’s land price adjustment coefficient shall be applied to determine payable land rental, and the provincial-level People’s Committee shall take responsibility for any loss of state budget revenues due to its late promulgation of the land price adjustment coefficient.”

6. Order and procedures for determination of reserve price for auction of land use rights for lease of land or water surface

a/ The order and procedures for determination of the reserve price for auction of land use rights in case the area of the land parcel or land plot used to calculate land rental or water surface rental is valued (according to 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 must comply with the Government’s regulations on land prices and their amendments and supplements (if any); the provincial-level Department of Natural Resources and Environment shall determine specific land prices and submit them to the local land price appraisal council with the provincial-level Department of Finance acting as the standing body for appraisal and submission to the provincial-level People’s Committee for approval.

b/ The order and procedures for determining the reserve price for auction of land use rights in case the area of the land parcel or land parcel used to calculate land use levy is valued (according to 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 are prescribed below:

- Within 10 days from the date a competent state agency issues a decision on auction in accordance with the land law, the natural resources and environment agency shall send a dossier to request determination of the reserve price for auction of land use rights to the same-level finance agency. A dossier of request for determination of the reserve price must comprise:

+ A written request for determination of the reserve price, made by the natural resources and environment agency: 1 original;

+ The decision on auction of land use rights issued by a competent state agency: 1 copy;

+ The cadastral dossier (with information on the area, location, land use purpose, form of land lease, land or water surface lease term, etc.): 1 copy.

- Within 10 days after receiving a dossier for determination of the reserve price for auction of land use rights from the natural resources and environment agency, the finance agency shall determine the reserve price in accordance with regulations on collection of land rental and water surface rental, and submit it to a competent state agency (provincial-level People’s Committee or decentralized or authorized state agency) for approval under regulations.

If lacking grounds for determining the reserve price, within 5 working days after receiving a dossier, the finance agency shall send a written notice to the natural resources and environment agency for supplementation of the dossier. Within 10 days after receiving a complete dossier, the finance agency shall complete the determination of the reserve price.

- Pursuant to the competent state agency’s decision approving the reserve price, the unit assigned to auction land use rights shall organize an auction in accordance with law.

The order and procedures for re-determining the reserve price are the same as those for initial determination of the reserve price.

c/ The order and procedures for determining the reserve price for auction of use rights of land with state-owned assets built thereon must comply with the law on management and use of public assets.”

2. To amend Clause 3, Article 7 as follows:

“3. The State shall lease water surface (sea surface) for oil and gas exploration and exploitation activities. Contractors shall pay water surface (sea surface) rental under law, unless there are separate commitments between the Vietnamese Government and a foreign government or organization under signed agreements. Sea surface rental is prescribed below:

a/ The unit rate of sea surface rental for oil and gas exploitation activities is the highest rate in the water surface rental bracket prescribed in Clause 1 of this Article and shall be kept stable for 5 years as prescribed in Clause 2, Article 14 of this Decree or according to separate commitments between the Vietnamese Government and a foreign government (or organization) under the signed agreement. The area subject to sea surface rental is the area allocated for oil and gas exploitation in accordance with law.

b/ The unit rate used to calculate sea surface rental for oil and gas exploration activities is half of the unit rate used to calculate sea surface rental for oil and gas exploitation activities. Sea surface rental for oil and gas exploration activities shall be collected in the exploration period according to the area of sea surface under exploration.

c/ The time for water surface (sea surface) rental calculation shall be counted from the time water surface is allocated for oil and gas exploration and exploitation.”

3. To amend Clauses 5 and 6 of, and add Clauses 6a, 7a and 8a to, Article 12 as follows:

“5. In case the land is used for both a purpose liable and a purpose not liable to land rental, payable land rental shall be determined on the basis of the land area used for each purpose.

In case the lessees of land from the State under the land law currently use houses and land in construction works with combined use purposes under state ownership or with areas under state management and it is impossible to separate the land areas used by each lessee, the land rental payable by each lessee shall be determined based on the ratio of floor area used.

6. In case an investor that is leased land by the State with one-off land rental payment for the entire lease term and has paid land rental in accordance with law or acquires lawful land use rights then is required to rent such land, requests adjustment of the detailed construction plan resulting in a new land-related financial obligation (if any), he/she/it shall pay an additional land rental into the state budget.

If a land user that has not yet fulfilled the financial obligation related to land rental requests adjustment of the detailed construction plan resulting in a new land-related financial obligation (if any), he/she/it shall:

- Fully pay the land rental determined under the original detailed construction plan plus a late-payment interest under law.

- Pay an additional land rental (if any) being the difference between the payable land rental under the original detailed construction plan and that under the adjusted plan which are determined at the time such adjustment is approved by a competent state agency.

6a. In case a land user that is leased land by the State with annual land rental payment with the area of the land parcel or land plot used to calculate land rental valued (according to 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, implements a construction investment project under the approved detailed construction plan on the leased land area (without changing the land use purpose) with a land use coefficient (construction density, height of construction work) higher than the land use coefficient under the plan before the project is implemented, the provincial-level People’s Committee shall decide to increase the land price adjustment coefficient for land rental calculation.

7a. When public non-business units that are allocated land by the State without land use levy or are leased land with land rental exemption for the entire lease term use part or the whole of the land area or part or the whole of the houses and construction works for production, business, service, lease, joint venture or cooperation under the law on management and use of state property, they shall pay land rental as follows:

a/ If they use the whole area of land allocated or leased by the State or land-attached assets for production, service provision, lease, joint venture or cooperation, they shall pay land rental like economic organizations that are leased land by the State for production and business activities.

b/ If they use part of the land area or land-attached assets for production, business, service, lease, joint venture or cooperation purpose, they shall pay land rental determined on the basis of the land price in the land price table, percentage (%) for calculation of the unit rate of land rental, land price adjustment coefficient promulgated by the provincial-level People’s Committee, and percentage (%) of the area of land or area of houses and construction works (floor area) used for such purpose.

c/ In the case specified at Point b of this Clause, if it is impossible to separate the area used for production, business, service, lease, joint venture or cooperation purpose, payable land rental shall be determined based on the area distribution coefficient. The area distribution coefficient is the ratio of turnover from production, business, service, lease, joint venture or cooperation activities to the total revenue estimate of the public non-business unit approved by a competent state agency under law.

8a. If organizations and individuals that are leased land by the State with annual land rental payment for implementing production and business investment projects want to return such land because they no longer need to use it but a competent state agency is late in issuing a land recovery decision, they are not required to pay land rental from the time they file a document expressing their wish to return the land to the time the competent state agency issues a land recovery decision under the land law. These organizations and individuals shall fully pay land rental (including late-payment interest, if any) calculated by the time they file a document expressing their wish to return land under the land law.”

4. To amend Clause 2 of, and add Clause 3a to, Article 13 as follows:

“2. For a person who is leased land by the State not through auction and has voluntarily advanced a money amount for ground clearance compensation under the approved plan, the advanced amount shall be subtracted from the payable land rental under such plan, with the subtracted amount not exceeding the payable land rental. The remaining money amount (if any) for ground clearance compensation shall be included in the project’s investment capital.

A dossier for subtraction of ground clearance compensation money must comprise:

- The compensation and ground clearance plan approved by a competent state agency: 1 copy;

- Documents and a list of payments for ground clearance compensation: 1 original.

3a. In case of land recovery, compensation and ground clearance and lease with annual land rental collection by the State under law but lacking state budget funds for ground clearance compensation, the provincial-level Department of Finance shall report such to the provincial-level People’s Committee for consideration and decision to allow the land lessee to pay in advance a land rental amount equal to the ground clearance compensation money amount under the approved plan. The tax agency shall convert this amount into the number of years and months during which the land lessee has paid land rental and notify such to the land lessee. This amount must not exceed the payable land rental.”

5. To amend Clause 2, Article 17 as follows:

“2. When having the land use term extended and the land user is liable to pay land rental, land rental shall be determined according to land policies and land prices effective at the time of extension.

In case of land lease with annual rental payment, the stabilization period of the unit rate of land rental shall be counted from the time a competent state agency issues the decision extending the land lease term. If the land lease term expires before a competent state agency issues the decision extending the land lease term, the land user shall pay annual land rental for the period from the date of expiration of the land lease term to the date of issuance of such decision according to the unit rate determined on the basis of the land price in the land price table, land price adjustment coefficient, and percentage (%) for calculation of the unit rate of land rental promulgated by the provincial-level People’s Committee.”

6. To amend Clause 7 of, and add Clauses 9 and 10 to, Article 18 as follows:

“7. In case competent state agencies detect that the land user is ineligible for but still enjoyed land rental or water surface rental exemption or reduction due to the land user’s fault or use of land for a purpose not conforming to the land lease decision or land lease contract but the land user is not subject to land recovery under the land law or is subject to land recovery under Point i, Clause 1, Article 64 of the Land Law, the land user shall refund to the state budget the exempted or reduced land rental. The refund of the exempted or reduced land rental is prescribed below:

a/ The to-be-refunded land rental shall be determined on the basis of the land price in the land price table, land price adjustment coefficient, and percentage (%) for calculation of the unit rate of land rental promulgated by the provincial-level People’s Committee at the time of issuance of the land rental exemption or reduction decision plus a late-payment interest on the to-be-refunded amount under the law on tax administration applicable in each period. The land user is not required to refund the exempted or reduced amount being geographical area-based investment incentives.

b/ The time for calculation of the late-payment interest specified at Point a of this Clause is counted from the time the tax agency issues the land rental exemption or reduction decision to the time the competent state agency decides to recover the exempted or reduced land rental.

c/ The provincial-level Tax Department shall determine and report to the provincial-level People’s Committee for decision the recovery of exempted or reduced land rental amounts from organizations, overseas Vietnamese and foreign-invested enterprises.

d/ The district-level Tax Branch shall determine and report to the district-level People’s Committee for decision the recovery of exempted or reduced land rental amounts from households and individuals.

dd/ The tax agency shall issue decisions cancelling land rental exemption or reduction decisions in accordance with law.

9. If a person who is leased land by the State with one-off land rental payment for the entire lease term and is exempted from the whole land rental wishes, during the lease term, to pay such land rental (refuse to enjoy incentives), he/she shall pay a one-off land rental for the remaining land lease period according to the land policy and land price applicable at the time he/she files a document expressing his/her wish to pay land rental. Then, the land user will have land-related rights in the remaining land lease period as in the case of land rental payment.

10. In case the current land lessee is not entitled to land rental exemption or reduction, or is entitled to land rental exemption or reduction but the exemption or reduction period has expired when a competent state agency approves the change of the land use purpose for implementing an investment project eligible for land rental exemption or reduction and the lease term of the land after the use purpose change is 50 years or more counting from the time of issuance of the decision on land use purpose change, he/she shall be entitled to land rental exemption and/or reduction under regulations.”

7. To amend Article 21 as follows:

“Article 21. Order and procedures for land rental and water surface rental exemption or reduction

1. The land lessee shall submit a dossier for land rental exemption or reduction to the managing tax agency or agency receiving dossiers for settlement of land-related administrative procedures as defined in Decree No. 43/2014/ND-CP. If the dossier is submitted to the agency receiving dossiers for settlement of land-related administrative procedures, it shall be transferred to the tax agency under regulations on the order and procedures for receipt and transfer of dossiers for determination of land-related financial obligations of land users.

2. Based on the dossier prescribed in Clause 3 of this Article, the tax agency shall determine and decide on exemptible or reducible land rental or water surface rental amount, specifically as follows:

a/ The director of a provincial-level Tax Department shall issue a decision on land rental or water surface rental exemption or reduction for land-renting economic organizations, foreign organizations and individuals or overseas Vietnamese.

b/ The head of a district-level Tax Branch shall issue a decision on land rental or water surface rental exemption or reduction for land-renting households and individuals.

3. Dossiers for land rental exemption or reduction

a/ A dossier for land rental exemption during the capital construction period must comprise

- A written request for land rental exemption (specifying the leased land area and land lease term; reason for exemption and exemption period): 1 original;

- The investment certificate, investment license, investment registration certificate or investment policy decision (unless the applicant is exempted from such certificate, license or decision under the investment law): 1 copy;

- The investment project approved under the investment law (unless the applicant is granted the investment certificate, investment license, investment registration certificate or investment policy decision under the investment law): 1 copy;

- The project approval decision: 1 copy;

- The land lease decision issued by a competent state agency: 1 copy.

b/ A dossier for land rental exemption or reduction under the investment law must comprise:

- A written request for land rental exemption or reduction (specifying the leased land area and land lease term; reason for exemption or reduction and exemption or reduction period): 1 original;

- The investment certificate, investment license, investment registration certificate or investment policy decision (unless the applicant is exempted from such certificate, license or decision under the investment law or the applicant is allocated land by the State without land use levy and now rents land from or is leased land by the State and is entitled to land rental exemption or reduction): 1 copy;

- The investment project approved under the investment law (unless the applicant is allocated land by the State without land use levy and now changes to rent land from or is leased land by the State and is entitled to land rental exemption or reduction): 1 copy;

- The project approval decision: 1 copy;

- The land lease decision issued by a competent state agency: 1 copy;

In case the project has an investment certificate, investment license, investment registration certificate or investment policy decision, the dossier is not required to comprise the investment project approved under law (except the cases specified at Points c and d, Clause 2, Article 15 of the Law on Investment).

c/ A dossier for land rental exemption or reduction for the cases specified at Points a, b, c and d, Clause 1, Article 18 of Decree No. 46/2014/ND-CP (which is amended and supplemented under Clause 5, Article 3 of Decree No. 135/2016/ND-CP) must comprise

- A written request for land rental exemption or reduction (specifying the leased land area and land lease term; reason for exemption or reduction and exemption or reduction period): 1 original;

- The land lease decision issued by a competent state agency: 1 copy;

- Papers proving the applicant’s eligibility for land rental exemption or reduction: 1 copy.

d/ A dossier for land rental exemption in the operation suspension period inforce majeureevents prescribed in Clause 1, Article 47 of the 2014 Law on Investment must comprise

- A written request for land rental exemption in the operation suspension period: 1 original;

- The investment registration agency’s written certification of the operation suspension period of the project or a competent state agency’s written certification: 1 original;

- The land lease decision issued by a competent state agency: 1 copy.

dd/ A dossier for land rental exemption or reduction in case the owner implements a project to build houses for lease to workers on the land leased from the enterprise that operates industrial park or complex infrastructure must comprise:

- The enterprise’s written request for land rental exemption for the land area leased to a secondary investor for implementing a project: 1 original;

- The secondary investor’s written request for land rental exemption for implementing the project: 1 original;

- The project formulated, appraised and approved under the investment and housing laws: 1 copy;

- The project approval decision issued under law: 1 copy;

- The land sublease contract between the project owner and the enterprise: 1 copy.

e/ A dossier for land rental exemption or reduction for land for construction of scientific research institutions must comprise:

- A written request for land rental exemption or reduction (specifying the land area for construction of laboratories; land area for construction of technology incubators and science and technology enterprise incubators, land area for construction of experimentation facilities, and land area for construction of trial production facilities): 1 original;

- The certificate of the hi-tech enterprise, science and technology enterprise or science and technology organization: 1 copy;

- The land lease decision issued by a competent state agency: 1 copy.

4. The time limit for the land lessee to submit a dossier for land rental exemption or reduction is specified below:

a/ In case of request for land rental exemption or reduction during the capital construction period under the investment law (except the cases specified at Points c and d, Clause 2, Article 15 of the Law on Investment): 20 days from the date a competent state agency signs the land lease decision.

b/ In case of request for land rental exemption or reduction prescribed at Points a, b, c and d, Clause 1, Article 18 of Decree No. 46/2014/ND-CP (which is amended and supplemented under Clause 5, Article 3 of Decree No. 135/2016/ND-CP): 30 days from the time the land lessee shifts to rent land or the time he/she/it starts enjoying land rental exemption or reduction under the land law or another time prescribed by the Government or Prime Minister.

5. Time limit for the tax agency to issue a land rental exemption or reduction decision or a notice of ineligibility for land rental exemption or reduction due to lack of law-prescribed conditions

a/ Twenty days from the date of receipt of a complete and valid dossier for land rental exemption or reduction during the capital construction period.

b/ Thirty days from the date of receipt of a complete and valid dossier for land rental exemption or reduction for cases eligible for incentives under the investment law (except the cases specified at Points c and d, Clause 2, Article 15 of the Law on Investment) and cases specified at Points a, b, c and d, Clause 1, Article 18 of Decree No. 46/2014/ND-CP (which is amended and supplemented under Clause 5, Article 3 of Decree No. 135/2016/ND-CP).

c/ Twenty days from the date of receipt of a complete and valid dossier for land rental exemption or reduction for cases eligible for land rental exemption or reduction specified at Points c and d, Clause 2, Article 15 of the Law on Investment.

d/ Twenty days from the date of receipt of a complete and valid dossier for land rental exemption during operation suspension period under Clause 1, Article 47 of the Law on Investment. The tax agency shall coordinate with the investment registration agency and other agencies (when necessary) in conducting field inspections and determining the operation suspension period and issue a land rental exemption decision under regulations.

dd/ Twenty days from the date of receipt of a complete and valid dossier for land rental exemption in case the owner of the project to build houses for workers rents land in an industrial park or industrial complex from the enterprise operating the industrial park or complex infrastructure under the approved master plan.

6. Determination of the capital construction period eligible for land rental exemption

a/ Based on the dossier for land rental exemption or reduction, the tax agency shall coordinate with related agencies in determining the capital construction period and issue a land rental exemption decision for each investment project for 3 years at most from the date of issuance of the land lease decision.

In case the investment certificate, investment license, investment registration certificate or investment policy decision granted for the first time by a competent authority under law specifies the capital construction period (project implementation schedule), the tax agency shall base itself on such certificate, license or decision to issue a land rental exemption decision for each investment project for 3 years at most from the date of issuance of the land lease decision.

b/ In case the land lessee does not request land rental exemption during the capital construction period, the land rental exemption period under the investment law shall be counted from the time of issuance of the land lease decision. If submitting late a dossier for land rental exemption as prescribed at Point a, Clause 2 of this Article, the land lessee will only be entitled to land rental exemption for the remaining incentive period (if any) counting from the time the tax agency receives a complete dossier as prescribed, but not for the late period.

7. Determination of exemptible or reducible land rental amounts under the investment law for inclusion in land rental exemption or reduction decisions

a/ In case of land lease with annual land rental payment:

- If, by the time of submission of a dossier for land rental exemption or reduction, the land price for land rental calculation has been determined by a competent state agency under law, the exemptible or reducible land rental amount shall be determined based on such land price.

- If, by the time of submission of a dossier for land rental exemption or reduction, a competent state agency has not yet determined the land price for land rental calculation under regulations, the exemptible or reducible land rental amount shall be determined based on the land price in the land price table, land price adjustment coefficient, and percentage (%) for calculation of the unit rate of land rental promulgated by the provincial-level People’s Committee.

- In case the land lessee is entitled to 50% reduction of land rental for the entire lease term or for a certain number of years, the reducible land rental amount to be stated in the land rental reduction decision is the amount determined in the stabilization period of the unit rate of land rental at the time of issuance of this decision and shall be adjusted when the unit rate of land rental is changed under regulations.

b/ In case of land lease with one-off land rental payment for the entire lease term:

- If the land lessee is entitled to the whole land rental for the entire lease term, the exemptible land rental amount to be stated in the land rental exemption decision shall be determined under Point a of this Clause.

- If the land price for land rental calculation is determined according to the land price adjustment coefficient method and the land lessee is entitled to land rental exemption for a certain number of years but, by the time he/she submits a dossier for land rental exemption, the competent state agency has not yet determined the land price for land rental calculation under regulations, the exemptible land rental amount to be stated in the land rental exemption decision shall be determined as follows:

- If the land price for land rental calculation is determined according to the direct comparison, income-based, subtraction or surplus-based method and the land lessee is entitled to land rental for a certain number of years but, by the time he/she submits a dossier for land rental exemption, the competent state agency has not yet determined the land price for land rental calculation under regulations, the tax agency shall transfer information on land rental exemption period to the natural resources and environment agency for determination of the land price for one-off land rental calculation corresponding to the period subject to land rental. The exemptible land rental to be stated in the land rental exemption decision shall be determined as follows:

The period subject to land rental is the land lease period minus (-) the period of land rental exemption (including exemption during the capital construction period).

- If the land lessee is exempted from land rental for a certain number of years but, by the time he/she submits a dossier for land rental exemption, the competent state agency has determined the land price for land rental calculation for the entire lease term under regulations (not taking into account the land rental exemption period), the exemptible land rental amount to be included in the payable land rental (already determined) and stated in the land rental exemption decision shall be determined as follows:

8. To amend and supplement Clause 3 of, and add Clause 5a to, Article 24 as follows:

“3. Land rental or water surface rental in case of lease of land or water surface with annual rental payment shall be paid in 2 installments: For the first installment, at least 50% of the rental amount shall be paid before May 31; for the second installment, the remainder shall be paid before October 31 every year. If the period of determination of the obligation to pay land rental or water surface rental in the first year is counted from October 31 through December 31 of a year, the tax agency shall issue a notice of payment of land rental or water surface rental for the remaining period of the year and the time limit for rental payment for the first year is 30 days from the date such notice is signed. Past the time limit for payment of land rental or water surface rental for each payment period stated in the tax agency’s notice, the lessee shall pay a late-payment interest on the unpaid rental amount at the rate prescribed by the law on tax administration.”

“5a. In case the lessee is leased land or water surface by the State before July 15, 2014, and is liable to retrospectively pay land rental or water surface rental for the land use period

a/ Within 30 days from the date the tax agency signs the notice of retrospective collection of land rental or water surface rental, the lessee shall pay 50% of land rental as notified.

b/ Within the next 60 days, the lessee shall pay the remaining 50% of land rental or water surface rental as notified.

c/ Past the time limits specified at Points a and b of this Clause, if the lessee has not fully paid land rental notified by the tax agency, he/she/it shall pay a late-payment interest on the unpaid rental amount at the rate prescribed by the law on tax administration.”

9. To add the following Clauses 5, 6, 7 and 8 to Article 32:

“5. In case a state enterprise is officially transformed into a joint-stock company before July 1, 2014, but is subject to adjustment of the unit rate of land rental, finalization of temporarily paid land rental and retrospective payment of payable land rental under Point b, Clause 4, Article 32 of Decree No. 46/2014/ND-CP:

a/ If, by the time the tax agency issues a notice of retrospective collection of land rental payable by the enterprise under regulations, the competent state agency has not yet finalized and transferred capital and assets to the company, the company shall pay the retrospective land rental amount into the state budget. Such amount shall be handled under regulations on finalization and transfer of capital and assets to joint-stock companies under regulations.

b/ If, by the time the tax agency issues a notice of retrospective collection of payable land rental under regulations, the competent state agency has finalized and transferred capital and assets to the company under regulations on equitization of state enterprises, the company is not required to pay the land rental amount retrospectively payable by the enterprise under Point b, Clause 4, Article 32 of Decree No. 46/2014/ND-CP by the time the enterprise is officially transformed into the
joint-stock company.

6. In case of land lease by the State with annual land rental payment and it is in the stabilization period of the unit rate of land rental, if the provincial-level People’s Committee issues a decision to lower the percentage (%) for calculation of the unit rate of land rental or land price adjustment coefficient to remove difficulties for enterprises, the adjusted percentage (%) or coefficient shall be applied from the effective date of such decision and for the remaining time of the stabilization period of the unit rate of land rental. Upon the expiration of this period, the unit rate of land rental shall be adjusted according to the land policy and land price applicable at the time of adjustment.

7. Handling of water surface (sea surface) rental for still effective contracts on oil and gas exploration and exploitation which were signed before July 1, 2017:

a/ For contracts under which the parties have agreed on payment of sea surface rental, contractors shall pay rental under the signed contracts. If the contracts state that Vietnam Oil and Gas Group (PVN) is responsible for refunding to contractors the amounts paid from the contractors’ accounts for tax amounts and other payable amounts (including sea surface rental), PVN shall pay sea surface rental or refund the sea surface rental amount paid by contractors.

b/ For oil and gas contracts which state that contractors are exempted from all taxes and other payable amounts (in any name) or sea surface rental is not included in the financial obligations to be performed by contractors under the petroleum law, contractors are not required to pay sea surface rental.

c/ For contracts signed after the model contract issued together with the Government’s Decree No. 33/2013/ND-CP of April 22, 2013, contractors are not required to pay sea surface rental. When these contracts expire and are extended under the petroleum law, contractors shall pay sea surface rental under regulations effective at the time of extension.

8. In case investors paid the ground clearance compensation amount under the approved plan (even in case they reach agreement on compensation or acquire land on their own) under law before July 1, 2004, and were leased land by the State after this date, the land-related compensation amount under the approved plan or value of land use rights according to the purpose of lawfully transferred land as determined and approved by a competent state agency (in case investors reach agreement on compensation or acquire land on their own) at the time of agreement or acquisition (which is distributed for the remaining land lease period corresponding to the area subject to land rental not yet accounted as production and business expense) may be subtracted from the payable land rental, with such amount or value not exceeding the payable land rental. The subtracted amount shall be converted into a period during which annual land rental has been paid. The unit rate of land rental used for conversion must comply with land policies and land prices applicable from January 1, 2016.”

10.The Minister of Finance shall guide in detail in Article.

Article 4.Effect

1. This Decree takes effect on January 1, 2018.

2. To annul Article 7.9 of the model contract issued together with the Government’s Decree No. 33/2013/ND-CP of April 22, 2013.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC