Decree No. 135/2016/ND-CP dated September 09, 2015 of the Government amending and supplementing a number of articles on collection of 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 September 16, 2015 Law on Organization of the Government;

Pursuant to the November 29, 2013 Land Law;

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 the Government’s Decree No. 45/2014/ND-CP of May 15, 2014, prescribing the collection of land use levy, and Decree No. 46/2014/ND-CP of May 15, 2014, prescribing the collection of land rental and water surface rental.

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

1. To amend and supplement Clause 1 of, and add Clause 4 to, Article 4 as follows:

“1. For economic organizations, households and individuals that are allocated land by the State with land use levy collection through land use rights auction, the payable land use levy is the successful bid. The reserve price shall be determined as follows:

a/ In case the value of the land parcel or lot subject to land use levy (based on the land price table) is VND 30 billion or over, if it is located in a centrally run city; VND 10 billion or over, if it is located in a mountainous or highland province; or VND 20 billion or over, if it is located in another province, the reserve price for land use rights auction is the specific land price determined by the provincial-level Department of Natural Resources and Environment, appraised by the local council for land price appraisal with the provincial-level Department of Finance as its permanent body, and approved by the provincial-level People’s Committee;

b/ In case the value of the land parcel or lot subject to land use levy (based on the land price table) is less than VND 30 billion, if it is located in a centrally run city; less than VND 10 billion, if it is located in a mountainous or highland province; or less than VND 20 billion, if it is located in another province, the reserve price for land use rights auction is the land price determined by the finance agency according to the land price adjustment coefficient method;

c/ The determination of the reserve price for auction of rights to use land attached to assets under state ownership must comply with the law on management and use of state assets.

4. In case of failing to put the land allocated by the State into use or delaying the land use compared to the schedule stated in the investment project, the land user shall pay to the State an amount of money equal to the land use levy determined as follows:

a/ In case of having the land use term extended under Point i, Clause 1, Article 64 of the 2013  Land Law, the land user shall pay an amount of money equal to the land use levy payable for the delayed period of time, which is equal to the annual land rental;

b/ In case of being ineligible for extension of land use term or being eligible but failing to carry out procedures for extension or to put the land into use after the extended land use term expires as prescribed in Clause 1, Article 64 of the 2013 Land Law and the State has not yet issued a land recovery decision according to law, the land user shall pay an amount of money equal to the land use levy which is equal to the annual land rental for the period from the date the land user is allocated the land to the date the land recovery decision is issued;

c/ The land rental rate used for determining the payable land rental under Point a or b of this Clause shall be determined based on the land price table, land price adjustment coefficient and percentage (%) for calculation of land rental rates issued by the provincial-level People’s Committee.”

2. To add the following Clause 9 to Article 10:

“9. No land use levy exemption and reduction shall be granted to winners of land use rights auctions for land allocation with land use levy collection even though they are eligible therefor. Land use levy exemption and reduction for land areas allocated to subjects eligible for housing improvement policies shall be based on relevant policies without going through land use rights auction.”

3. The Minister of Finance shall issue specific guidance on this Article.

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

1. To amend and supplement Clause 3, Article 4 as follows:

“3. In case of auction of leased-land use rights

a/ In case of auction of land lease with annual land rental payment, the land rental rate is the successful bid for one-year lease term. The reserve price for auction of leased-land use rights with annual land rental payment shall be determined by the finance agency according to the land price adjustment coefficient method.

The land rental rate being the successful bid shall be kept stable for 10 years. After this period, it shall be adjusted according to the policy on collection of land rental applicable to land lease with annual land rental payment without going through auction, with the adjustment level not exceeding 30% of the successful bid or land rental rate of the previous 10-year period;

b/ In case of auction of land lease with one-off land rental payment for the entire lease term, the land rental rate is the successful bid for the lease term. The reserve price for leased-land use rights auction shall be determined as follows:

- In case the value of the leased land parcel or lot (based on the land price table) is VND 30 billion or over, if it is located in a centrally run city; VND 10 billion or over, if it is located in a mountainous or highland province; or VND 20 billion or over, if it is located in another province, the reserve price for land use rights auction is the land price determined by the provincial-level Department of Natural Resources and Environment, appraised by the local council for land price appraisal with the provincial-level Department of Finance as the permanent body, and approved by the provincial-level People’s Committee;

- In case the value of the leased land parcel or lot (based on the land price table) is less than 30 billion, if it is located in a centrally run city; less than VND 10 billion, if it is located in a mountainous or highland province; or less than VND 20 billion, if it is located in another province, the reserve price for land use rights auction is the land price determined by the finance agency according to the land price coefficient adjustment method.

c/ The determination of the reserve price for auction of rights to use leased land attached with assets under state ownership must comply with the law on management and use of state assets.”

2. To amend Clause 8, add Clause 9 to, and amend Clause 9 into Clause 10, of Article 12, as follows:

“8. If failing to put the land leased by the State into use or delaying the land use compared to the schedule stated in the investment project, the land lessee shall pay to the State an amount of money equal to the payable land rental determined as follows:

a/ In case of having the land use term extended under Point i, Clause 1, Article 64 of the 2013 Land Law, the amount of money equal to the payable land rental for the delayed period of time shall be calculated based on the payable annual land rental;

b/ In case of being ineligible for extension of land use term or being eligible but failing to carry out procedures for extension or to put the land into use after the extended land use term expires as prescribed in Clause 1, Article 64 of the 2013 Land Law and the State has not yet issued a land recovery decision according to law, the land lessee shall pay to the State an amount of money equal to the annual land rental for the period from the date of land allocation to the date the land recovery decision is issued, subtracted by the capital construction period determined by a competent state agency when leasing the land. The period of capital construction to be subtracted must not exceed three years or two years in case the land is leased by the State before July 1, 2014, or since July 1, 2014, respectively;

c/ The land rental rate used for determining the land rental referred to at Point a or b of this Clause shall be determined based on the land price table, land price adjustment coefficient and percentage (%) for land rental rate calculation issued by the provincial-level People’s Committee.

9. If households and individuals have lawfully acquired land use rights to implement investment projects in accordance with the land use master plan and plan and have to change the land use purpose after the acquisition and to fulfill the financial obligation of paying land rental as prescribed in Articles 57 and 73 of the Land Law, the settlement of the money amount for the acquisition of land use rights and land rental must comply with Clause 4 of this Article.

10. The Minister of Finance shall issue specific guidance on this Article.”

3. To add the following Clauses 4, 5, 6 and 7 to Article 13:

“4. If an investment project using the land allocated by the State without going through auction but applying a combination of forms of land use, including allocation of land with land use levy collection, allocation of land without land use levy collection, and land lease, and the investor voluntarily pays in advance an amount of money for compensation and ground clearance according to the plan approved by a competent state agency, the deduction of such amount of money shall be based on the areas of each type of land, and the amount of money for compensation and ground clearance for the land areas used for public purposes shall be distributed evenly to these areas.

5. If an entity that is leased land by the State with annual land rental payment and has fulfilled its financial obligation for a number of years by deduction of the amount of money it has paid in advance for compensation and ground clearance from the land rental according to law, switches to land lease with one-off land rental payment for the entire lease term, the remaining amount of money paid for compensation and ground clearance corresponding to the time of conversion shall be further deducted for the period in which the one-off land rental payment shall be made for the remaining land lease term as prescribed in Article 16 of this Decree.

6. If an enterprise commercially operating infrastructure of industrial parks, industrial clusters and export processing zones is leased land by the State with annual land rental payment and has fulfilled its financial obligation by conversion of the amount of money it has paid in advance for compensation and ground clearance into annual land rental according to law, it has the same entitlements to the land as those to the land leased by the State with annual land rental payment during the period of time the enterprise is certified by a competent state agency as having fulfilled the financial obligation of paying annual land rental.

7. The determination and deduction of the amount of money paid for compensation and ground clearance from the payable land rental for the cases prescribed in Clauses 1, 2 and 4 of this Article shall be effected at the time when the land lease decision is issued by a competent state agency in accordance with the Land Law.”

4. To amend and supplement Clause 7 of, and add Clause 8 to, Article 15 as follows:

“7. For projects leasing land before the effective date of this Decree,  if any of the following papers: investment certificate (investment license), land lease decision and land lease contract issued (signed) by a competent state agency, states the land rental rate and principle of adjustment of land rental rate according to the Ministry of Finance’s regulations on land rental rates (Decision No. 210A-TC/VP of April 1, 1990; Decision No. 1417/TC/TCDN of December 30, 1994, Decision No.179/1998/QD-BTC of February 24, 1998, Decision No. 189/2000/QD-BTC of November 24, 2000, and Decision No. 1357TC/QD-TCT of December 30, 1995):

a/ If the land rental rate has not been adjusted according to Clause 2, Article 9 of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, the adjustment may be made for each adjustment period based on the adjustment percentage (%) written in the investment certificate (investment license), land lease decision or land lease contract;

b/ If the land rental rate has been adjusted according to Clause 2, Article 9 of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, or the investment certificate (investment license) has been renewed or the form of land lease contract has been modified to meet the requirements of administrative procedures and the new certificate (license) or contract no longer states the principle of adjustment of land rental rate and keeps unchanged the land use purpose, in the next period of adjustment of land rental rate, the adjustment level must not exceed the percentage (%) of adjustment stated in one of the abovesaid papers of the land rental rate applied in the previous period through December 31, 2015 (already adjusted under Decree No. 142/2005/ND-CP). The adjustment of land rental rates since January 1, 2016, must comply with Clause 8 of this Article.

8. The adjustment of land rental rate in case the land is leased by the State with annual land rental payment before January 1, 2006, and is being used properly for the purpose stated in the land lease decision issued or land lease contract signed by a competent state agency (including also the land leased by the State for construction and commercial operation of infrastructure of industrial parks, industrial clusters or export processing zones, and the case of equitization or transformation before the effective date of this Decree while taking over all land-related benefits and obligations including the remaining land lease term) shall be made as follows:

a/ In case the land was leased by the State before January 1, 2006, and any of the following papers: investment certificate (investment license), land lease decision and land lease contract issued or signed by a competent state agency, does not state the principle of adjustment of land rental rates according to regulations on land rental rates in the Ministry of Finance’s Decision No. 210A-TC/VP of April 1, 1990, Decision No. 1417/TC/TCDN of December 30, 1994, Decision No. 179/1998/QD-BTC of February 24, 1998, Decision No. 189/2000/QD-BTC of November 24, 2000, or Decision No. 1357TC/QD-TCT of December 30, 1995 (below referred to as principle of land rental rate adjustment), the land rental shall be paid as follows:

- From January 1, 2006, to December 31, 2015, the annual land rental shall be paid at the land rental rate determined according to regulations or as temporarily calculated according to the land policy and price applicable at the time of issuance of the notice of temporary payment of land rental and be finalized according to the determined or temporarily calculated amount. In case of temporary payment of land rental according to the land policy and price applicable before January 1, 2006, or in case the land rental rate has not yet been re-determined under Decree No. 142/2005/ND-CP, the land rental rate shall be adjusted in accordance with regulations applicable in each period for retrospective collection of the payable land rental;

- From January 1, 2016, to the end of the land lease term, the land rental rate shall be determined on the basis of the land rental rate determined on January 1, 2006, prescribed in Decree No. 142/2005/ND-CP, the number of periods of adjustment of land rental rate from January 1, 2006, to January 1, 2016 (two periods), and the adjustment level of 15% over the previous period. This land rental rate shall be kept unchanged for five years and increased by 15% against the previous period and applicable in the remaining lease term. In case the land rental rate determined on January 1, 2016, is higher than that determined under this Decree, the land rental rate prescribed in Article 4 of this Decree shall be used for the adjustment period starting on January 1, 2016;

- If the land rental prescribed in Clause 2, Article 15, and Clauses 2 and 4, Article 32, of this Decree has been settled during the period from July 1, 2014, to before January 1, 2016, the land rental rate from January 1, 2016, shall be re-determined according to Point a of this Clause.

b/ In case the investment projects on construction and commercial operation of infrastructure of industrial parks, industrial clusters and export processing zones are subject to adjustment of land rental rate and determination of land rental according to the land policy and price prescribed in Decree No.142/2005/ND-CP, no land rental shall be paid for the land area for the construction of common-use infrastructure in industrial parks, industrial clusters and export processing zones for the remaining land lease term from January 1, 2016. For those projects not subject to such adjustment, land rental for the entire land area leased by the State shall be paid according to the regulations applicable before the effective date of Decree No. 142/2005/ND-CP. The determination of the land area for the construction of common-use infrastructure in industrial parks, industrial clusters and export processing zones must comply with the guidance of the natural resources and environment agency.”

5. To amend and supplement Clauses 1 and 3 of, and add Clauses 9, 10 and 11 to, Article 18 as follows:

“1. Exemption from and reduction of land and water surface rentals shall be effected on the basis of each investment project associated with new land lease except the following cases:

a/ State-run agricultural and forestry farms that are allocated land by the State without land use levy collection and are eligible for land rental exemption and reduction according to the fields and geographical areas entitled to investment incentives according to the investment law, when they switch to lease the land according to the land law;

b/ Public non-business organizations that are allocated land by the State without land use levy collection and are eligible for exemption from land rental for the land for construction of non-business service works according to the land law, when they switch to lease the land;

c/ Organizations and individuals that have decisions on allocation of land without land use levy collection, or land lease decisions or contracts lawfully issued or signed before July 1, 2014, and now have to lease and continue to use the land in its original state and are eligible for land rental exemption and reduction as prescribed at Points d, dd, e, g, h, i, and k, Clause 1, Article 19, and in Clause 1, Article 20, of this Decree;

d/ Organizations and individuals that lease land and are eligible for land rental exemption and reduction according to other regulations of the Government or Prime Minister.

3. Exemption from and reduction of land and water surface rentals as prescribed in Articles 19 and 20 of this Decree shall be applied only to entities that are leased land by the State and be determined based on payable land and water surface rentals, except the cases stated at Point b, Clause 1, Article 19 of this Decree.

9. No land rental exemption and reduction shall be applied in case of auction of land use rights for lease.

10. If an entity that is leased land by the State with annual land rental payment and remains in the period of entitlement to land rental exemption and reduction transfers its properties on the leased land to another and the transferee is allowed to lease the land for the remaining lease term and continues to use the land for the purpose at the time of transfer, the land rental exemption and reduction shall be effected as follows:

a/ The transferor may not include the exempted and reduced land rental in the transfer price;

b/ The transferee is entitled to the land rental exemption and reduction for the remaining period of entitlement to such exemption or reduction.

If, after acquiring the land, the transferee uses it for another purpose, he/she/it shall fulfill the financial obligation as prescribed in Clause 4, Article 12 of this Decree.

11. If an entity that is leased land by the State with annual land rental payment and remains in the period of entitlement to land rental exemption and reduction is transformed or equitized according to law, the newly formed economic organization may continue to enjoy the land rental exemption and reduction for the remaining period of entitlement to such exemption or reduction if it does not change the land use purpose.”

6. To amend and supplement Point b, Clause 1; to add Point dd to Clause 3; to amend and supplement Clause 8; to add Clause 10 to, and amend Clause 10 into Clause 11, of Article 19, as follows:

“1. Land and water surface rentals shall be exempted for the entire lease term in the following cases:

...b/ Housing construction projects for workers in industrial parks and export processing zones on the land leased by the State or sub-leased by the investors that construct and commercially operate infrastructure of industrial parks and export processing zones which conform with the approved master plan; the owners of these projects may not include land rental in the house rental.

3. Land and water surface rentals shall be exempted after the period of capital construction entitled to exemption from land and water surface rentals prescribed in Clause 2 of this Article, specifically as follows:

...dd/ Exemption from land rental for investment projects on construction and commercial operation of infrastructure of industrial parks, industrial clusters, export processing zones, economic zones and hi-tech parks must comply with Clause 10 of this Article.

8. Land rental shall be exempted for investment projects in agriculture and rural areas according to the Government’s regulations on investment incentives for agriculture and rural areas and for the period of capital construction as prescribed in Clause 2 of this Article.

10. Investors that are leased land by the State for the construction and commercial operation of infrastructure of industrial parks, industrial clusters, export processing zones, economic zones and hi-tech parks are entitled to exemption from land rental after the period of capital construction entitled to land rental exemption as prescribed in Clause 2 of this Article, particularly as follows:

a/ Exemption for 11 years if they make investment in district-level administrative units outside the list of geographical areas eligible for investment incentives according to the investment law;

b/ Exemption for 15 years if they make investment in district-level administrative units on the list of geographical areas with difficult socio-economic conditions according to the investment law;

c/ Exemption for the entire lease term if they make investment in district-level administrative units on the list of geographical areas with extremely difficult socio-economic conditions according to the investment law.

11. The Prime Minister shall review and decide on exemption from land rental for other cases submitted by the Minister of Finance at the proposal of ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees.”

7. To amend and supplement Point a, Clause 1, Article 23 as follows:

“1. In case of annual payment of land and water surface rentals

a/ For cases eligible for exemption from land and water surface rentals prescribed in Article 19 of this Decree, annual land and water surface rentals payable on the starting day for payment of land and water surface rentals (after the expiration of the period of exemption from land rental and period of fulfillment of the financial obligation of paying annual land rentals through deduction of the amount of money paid for compensation and ground clearance by the method of conversion into a number of years and months of fulfillment of the financial obligation of paying land rentals from the payable land rental according to regulations) shall be determined as follows:

8. To amend and supplement Clause 11 of, and add Clauses 13, 14, 15, 16 and 17 to, Article 31, as follows:

“11. If the amount of money for compensation and ground clearance which has been paid in advance by the investor according to the plan approved by a competent state agency in line with the policies on compensation, support and resettlement upon land recovery by the State under the 2003 Land Law, has not been deducted or completely deducted from annual land rentals under the law applicable in each period, and the land lease term has not yet expired, the remaining amount which has been determined by a competent state agency may continue to be deducted and converted into a period of payment of land rental at the land rental rate determined according to the land policy and price effective on January 1, 2015, and determined as a period of having paid annual land rentals.

In case the entity that was leased land by the State before January 1, 2006, is subject to re-determination of land rental rates as prescribed in Clause 8, Article 15 of this Decree, the land rental rate used for the conversion into a period of land rental payment is that determined according to the land policy and price effective on January 1, 2016.

13. If the amount of money for compensation and support for land and properties agreed between the entity that is leased land by the State with annual land rental collection and those whose land is recovered, which has been determined by a competent state agency, is allowed for deduction from payable land rental but had not been deducted by July 1, 2014, or is being gradually deducted according to the 2003 Land Law (before March 1, 2011), it may continue to be deducted from payable land rental. This amount shall be converted into a period of having paid annual land rentals according to the land policy and price effective on January 1, 2015.

14. If the land is leased by the State with annual rental payment according to the 2003 Land Law but actually handed over after July 1, 2014, the land rental rate shall be determined according to the land policy and price effective at the time of handover.

15. In case an entity is leased land by the State with one-off land rental payment for the entire lease term according to the 2003 Land Law but had not yet fulfilled its financial obligation of paying land rental before July 1, 2014:

a/ If the payable land rental has been determined and notified by a competent state agency according to law, the economic organization shall continue to pay such land rental into the state budget as notified together with a late payment interest (if any) according to the law applicable in each period;

b/ If the payable land rental determined and notified by a competent state agency is inconsistent with the law applicable at the date of its determination and notification, the provincial-level People’s Committee shall rely on actual local conditions to direct the re-determination of the land rental according to law. The economic organization shall be notified of extra payable amounts (if any) that arise before the date of re-determination for payment into the state budget and does not have to pay late payment interest thereon. For the payable land rental determined and notified by a competent state agency before the date of re-determination, the economic organization may continue to pay the notified amount; if it has not yet fully paid such amount, it shall pay the deficit and late payment interest thereon as in the case prescribed at Point a of this Clause;

c/ If the economic organization has not yet received any notice of the payable land rental from a competent state agency and not yet paid any land rental or has temporarily paid only part of it into the state budget:

The temporarily paid amount (if any) shall be converted into an area of land for which land rental has been paid (i.e., the financial obligation has been fulfilled) on the date of actual handover of the land. The remaining land area is subject to a land rental according to the land policy and price effective on the date of actual handover of the land (if the actual handover took place before January 1, 2005, the land price for determination of land rental is that effective on January 1, 2005), and the late payment of the land rental in this case shall be handled as follows:

- If the late payment is due to the economic organization, the economic organization shall pay an amount of money equal to the late payment interest according to the law on tax administration applicable in each period;

- If the late payment is not due to the economic organization, the economic organization does not have to pay an amount equal to the late payment interest.

Late payment interest shall be calculated from the date of actual handover of the land to the date of issuance of the notice of payment into the state budget according to the percentage of late payment interest prescribed by the law effective in each period.

d/ The payment of the notified land rental into the state budget by the economic organization in case the actual handover of land has not yet taken place shall be considered temporary payment and handled under Point b of this Clause;

dd/ The date of actual handover of land shall be determined as follows:

- For land already fully cleared, the date of actual handover is the date when the land allocation decision is issued by a competent state agency;

- For land not yet cleared, the date of actual handover is the date of handover of the land already fully cleared according to the land allocation schedule stated in the approved investment project; if the ground clearance is behind the land allocation schedule stated in the approved investment project, the date of actual handover of land is the date of handover of land already fully cleared.

For projects to be cleared over a period of two years or longer and stating no land allocation schedule, the actual handover of land shall be implemented on an annual basis and in conformity with actual ground clearance work.

16. Entities that are leased land by the State before July 1, 2014, but submit after this date dossiers of request for exemption from land rental during the period of capital construction, shall be exempted from the land rental during the period of capital construction of no more than three years since the date of issuance of the land lease decision or the date of actual handover of the land. Such a dossier shall be submitted before January 1, 2017, to a competent state agency for carrying out land rental exemption and reduction procedures. Any dossier submitted after this date may be eligible for exemption from land rental only for the remaining term (if any) counting from the date of submission of the dossier as prescribed. Any land rental already paid for the period of exemption shall be deducted from the payable land rental in the subsequent years.

17. For land leased by the State before July 1, 2014, if the certificate of investment incentives or investment license issued by a competent state agency specifies the levels of land rental exemption and reduction which have been confirmed to be compliant with the investment law; or if such certificate or license does not specify the levels of land rental exemption and reduction or the land lessee is not required to apply for such certificate or license but is eligible for land rental exemption and reduction according to the law effective at the time of land lease by the State, the land lessee is still entitled to land rental exemption and reduction according to law even though he/she/it files late a request for such exemption and reduction. Dossiers of request for land rental exemption and reduction shall be submitted before January 1, 2017, to a competent state agency for carrying out land rental exemption and reduction procedures. Any dossier submitted after this date is eligible for land rental exemption and reduction only for the remaining term (if any) counting from the date of submission of the dossier as prescribed by law.

In case a decision on land rental exemption and reduction for the remaining term to before January 1, 2017, is issued by a competent state agency and now the case is re-settled under this Clause, the amount of money already paid for the period ineligible for land rental exemption and reduction due to the late request therefor shall be deducted from the payable land rental after the expiration of the period of exemption and reduction, and further deducted into other financial obligations if it is not fully deducted at the end of the land lease term.

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

“5. Determination of financial obligations of enterprises commercially operating infrastructure of industrial parks, industrial clusters and export processing zones that are leased land by the State with annual land rental payment and have sub-leased such land with infrastructure with one-off land rental payment for the entire lease term before July 1, 2014

a/ For enterprises that were leased land by the State before January 1, 2006: If any of the following papers: investment certificate (investment license), land lease decision, and land lease contract issued (or signed) by a competent state agency does not state the principle of adjustment of land rental rates or any of such papers states this principle and some adjustment has been made under Clause 2, Article 9 of Decree No. 142/2005/ND-CP, the enterprises, in sub-leasing the land with one-off land rental payment for the entire lease term before July 1, 2014, shall pay land rentals according to Clause 2, Article 210 of the 2013 Land Law as follows:

- They shall determine and pay annual land rentals for the lease term from January 1, 2006, to December 31, 2015, at the land rental rate determined according to regulations or temporarily calculated according to the land policy and price effective on the date of issuance of the notice of temporary payment of land rental, and has the determined or temporarily land rental finalized. In case of temporary payment of land rental according to the land policy and price effective before January 1, 2006, or in case the land rental has not yet been re-determined in accordance with Decree No. 142/2005/ND-CP, the land rental rate shall be adjusted in accordance with the law applicable in each period to determine and pay the land rental for the period from January 1, 2006, to December 31, 2015;

- They shall determine and pay the one-off land rental for the period from January 1, 2016, to the end of the land sub-lease term. This amount of money shall be determined based on the sub-leased land area, remaining land sub-lease term counting from January 1, 2016, the annual land rental rate determined according to the law effective on January 1, 2006, plus an amount of money equal to the late payment interest on this rental calculated from January 1, 2006, to the date of payment into the state budget, in case the land was sub-leased before January 1, 2006, or from the date of sub-lease to the date of payment into the state budget, in case the land was sub-leased after January 1, 2006, to before July 1, 2014.

b/ Enterprises commercially operating infrastructure that were leased land by the State between January 1, 2006, and before July 1, 2014, and sub-leased the land with one-off land rental collection for the entire lease term before July 1, 2014, shall pay land rentals as prescribed in Clause 2, Article 210 of the Land Law as follows:

- They shall determine and pay annual land rentals from the date of being leased land by the State to December 31, 2015, at the land rental rate determined according to regulations or temporarily calculated according to the land policy and price effective on the date of notification of temporary payment of land rental, and have the determined or temporarily calculated land rental finalized. If the land rental rate has not been determined yet or the temporary payment of annual land rentals is inconsistent with the land policy and price effective at the time of notification of temporary payment of land rental, the land rental rate shall be re-determined for collection of land rental for the period from the date of land lease by the State to December 31, 2015;

- They shall determine and pay the one-off land rental for the period from January 1, 2016, to the end of the sub-lease term for the sub-leased land area as follows:

+ For enterprises that were leased land by the State with annual land rental collection in the period from January 1, 2006, to before October 1, 2009 (the effective date of the Government’s Decree No. 69/2009/ND-CP of August 13, 2009), the amount of one-off land rental shall be determined by multiplying the annual land rental at the time of sub-lease by (x) the number of sub-lease years (from January 1, 2016, to the end of the sub-lease term) plus an amount of money equal to the late payment interest according to the law on tax administration effective in each period from the date of sub-lease of the land to the date of payment into the state budget;

+ For enterprises that were leased land by the State with annual land rental collection during the period from October 1, 2009, to before July 1, 2014, the amount of one-off land rental shall be determined to be equal the payable land use levy as in the case of allocation of land with land use levy collection with the same land use purpose and land use term (from January 1, 2016, to the end of the sub-lease term) according to the land policy and price effective on the date of sub-lease of the land.

c/ For investors that are leased land by the State with annual land rental collection for construction and commercial operation of infrastructure of industrial parks, industrial clusters and export processing zones, if any of the following papers: investment certificate (investment license), land lease decision, and land lease contract issued (signed) by a competent state agency specifies the principle of adjustment of land rental rates and no adjustment thereto has been made according to Clause 2, Article 9 of Decree No. 142/2005/ND-CP, these enterprises shall, in sub-leasing the land with infrastructure with one-off land rental collection for the entire lease term from January 1, 2006, to before July 1, 2014, pay the one-off land rental to the State as determined on the principle prescribed Point a or b of this Clause;

d/ These enterprises shall complete payment of the land rental as determined according to Point a, b or c of this Clause before December 31, 2016. If failing to do so, they shall face administrative measures and pay an interest on the unpaid amount according to the law on tax administration.

6. Amounts of money paid by land users according to the law before July 1, 2004, for compensation and ground clearance under the approved plan (in case of self-agreement on compensation or self-acquisition of land) shall be handled as follows:

a/ Enterprises that are leased land by the State with one-off land rental payment but have not been notified by a competent state agency of the payable land rental which is determined according to law or such land rental has to be re-determined because it was determined not in accordance with the law effective on the date of determination, are entitled to deduction of the amount of money paid for land compensation and support according to the plan approved by a competent state agency or to the value of land use rights based on the purpose of the lawfully acquired land determined and approved by a competent state agency (in case of self-agreement on compensation or self-acquisition of land) on the date of self-agreement or self-acquisition (distributed to the remaining land lease term for the land area subject to land rental and not yet accounted into production and business expenses) from the payable land rental, provided such amount must not exceed the payable land rental;

b/ Enterprises that are leased land by the State with annual land rental payment with the land rental rate having been adjusted according to the land policy and price as prescribed in Clause 2, Article 9 of Decree No. 142/2005/ND-CP, or to be adjusted according to Clause 8, Article 5 of this Decree, are entitled to deduction of the amount of money paid for land compensation and support according to the plan approved by a competent state agency or to the value of land use rights based on the purpose of the lawfully acquired land determined and approved by a competent state agency (in case of self-agreement on compensation or self-acquisition of land) on the date of self-agreement or self-acquisition (distributed to the remaining land lease term for the land area subject to land rental and not yet accounted into production and business expenses) from the payable land rental, provided such amount must not exceed the payable land rental. The amount to be deducted from the payable land rental shall be converted into a period of having paid annual land rentals. The land rental rate used for such conversion shall be based on the land policy and price effective on January 1, 2016;

c/ Enterprises that are allocated land by the State without land use levy collection, are leased land according to law before July 1, 2004, or are leased land by the State with annual land rental payment after July 1, 2004, have switched to the form of land allocation with land use levy collection after July 1, 2004, with the payable land rental not yet determined and notified by a competent state agency according to law or to be re-determined according to law because it was determined not in accordance with the law effective at the time of determination, are entitled to deduction of the amount of money paid for land compensation and support according to the plan approved by a competent state agency or to the value of land use rights based on the purpose of the lawfully acquired land determined and approved by a competent state agency (in case of self-agreement on compensation or self-acquisition of land) on the date of self-agreement or self-acquisition (distributed to the remaining land lease term for the land area subject to land rental and not yet accounted into production and business expenses) from the payable land rental, provided such amount must not exceed the payable land rental.”

10. The Minister of Finance shall issue specific guidance on this Article.

Article 4. Effect and implementation responsibility

1. This Decree takes effect on November 15, 2016.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of the People’s Committees at all levels, and other related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC