14 cases of tax exemption and reduction of non-agricultural land use tax

Non-agricultural land use tax has a low tax rate (the maximum rate is 0.2%). Tax exemption of non-agricultural land use tax is the thing that everybody wants although the tax rate is not high.

10 cases of tax exemption of Non-Agricultural Land Use Tax

Pursuant to Article 9, Law on Non-agricultural land use 2010 and Article 10, Circular No. 153/2011/TT-BTC, the cases of tax exemption are as follows:

(1) Land of investment projects in domains eligible for special investment promotion; investment projects in areas with extreme socio-economic difficulties; investment projects in domains eligible for investment promotion in areas with socio-economic difficulties; and the land of enterprises with over 50% of their employees being war invalids and diseased soldiers.

Lists of sectors eligible for investment promotion; sectors eligible for special investment promotion; areas with socioeconomic difficulties; and areas with extreme socio-economic difficulties comply with the investment law.

Employees being war invalids and diseased soldiers must be regularly employed in the year as specified by laws.

(2) Land of establishments carrying out socialized activities in education, vocational training, health, culture, sports, and environmental protection. These establishments include:

• Non-public establishments set up and qualified for carrying out socialized activities under regulations of competent state agencies;
• Organizations and individuals operating under the Enterprises Law that has investment projects, joint-venture or associated activities, or establish establishments qualified for carrying out socialized activities under regulations of competent state agencies;
• Public non-business establishments that contribute capital to, or raise capital for jointly setting up independent cost-accounting units or enterprises carrying out socialized activities under the decisions of competent state agencies;
• Tax exemption for foreign-investment projects carrying out socialized activities shall be decided by the Prime Minister at the proposal of the Ministry of Planning and Investment and relevant line ministries.
• Establishments carrying out socialized education, vocational training, healthcare, cultural, sports, and environmental activities must satisfy the requirements on operation scope and standards under the Prime Minister's decisions.

(3) Land for construction of gratitude houses, great-unity houses, nursing homes for lonely elderly people, people with disabilities or orphans, and social disease-treatment establishments.

(4) Within-quota residential land in geographical areas with extreme socioeconomic difficulties.

(5) Within quota residential land of persons engaged in revolutionary activities before August 19, 1945; war invalids of 1/4 or 2/4 grade; persons entitled to policies like war invalids of 1/4 or 2/4 grade; diseased soldiers of grade 1/3; heroes of people's armed forces; heroic Vietnamese mothers; natural parents and nurturing persons of martyrs during their childhood; spouses of martyrs; martyrs’ children eligible for monthly allowances; Agent Orange victims who are revolutionary activists; and disadvantaged Agent Orange victims.

(6) Within-quota residential land of poor households identified under the Prime Minister's decision on the poverty line.  In case provincial-level People's Committees have specified a poverty line applicable in their localities according to law, poor households shall be identified under the poverty line promulgated by provincial-level People's Committees.

(7) Households and individuals whose residential land is recovered by the State in a year under approved master plans or plans will be exempt from tax on recovered land and the land in the new place of residence in that year.

(8) Land with garden houses certified by a competent state agency as historical-cultural relics.

(9) Taxpayers facing difficulties due to force majeure circumstances, if the value of damage related to land and houses on land accounts for over 50% of the taxable price.

In this case, certification of commune-level People's Committees of the localities where exists such land is required.

(10) Exemption from non-agricultural land use tax shall be granted to households and individuals that have an annual payable nonagricultural land use tax amount (after subtracting the exempted or reduced tax amount (if any) under the Law on Non-Agricultural Land Use Tax and guiding documents) of VND 50,000 or less. In case a household or an individual has various land parcels within a province or centrally run city, the non-agricultural land use tax amount to be exempted under this Article shall be calculated on the total payable tax amount for all of these parcels.

For households and individuals that are eligible for exemption from non-agricultural land use tax but have paid tax into the state budget, the tax office shall refund the paid tax amounts.

4 cases of tax reduction of Non-Agricultural Land Use Tax

Pursuant to Article 10, Law on Non-Agricultural Land Use Tax 2010 and Article 11 of the Circular No. 153/2011/TT-BTC, to reduce payable tax amounts by 50% in the following cases:

(1) Land of investment projects in the sectors eligible for investment promotion; investment projects in geographical areas with socio-economic difficulties; land of enterprises with between 20% and 50% of their employees being war invalids or diseased soldiers.

Lists of sectors eligible for investment promotion; sectors eligible for special investment promotion; areas with socioeconomic difficulties; and areas with extreme socio-economic difficulties comply with the investment law.

(2) Employees being war invalids and diseased soldiers must be regularly employed in the year as specified by laws.

(3) Within-quota residential land in geographical areas with socio-economic difficulties. Within-quota residential land of war invalids of 3/4 or 4/4 grade; persons enjoying policies like war invalids of 3/4 or 4/4 grade; martyrs' children enjoying monthly allowances.

(4) Taxpayers facing difficulties due to force majeure circumstances, provided the value of damage related to their land and houses on land accounts for between 20% and 50% of the taxable price

In this case, certification of commune-level People's Committees of the localities where exists such land is required.

Note:

• A taxpayer that is eligible for both tax exemption and reduction for a single land plot may enjoy tax exemption. A taxpayer eligible for a tax reduction under two or more conditions specified above may enjoy tax exemption.
• Residential land taxpayers will be eligible for tax exemption or reduction only in one place chosen by them, except in the cases specified in section (9) of tax exemption and section (4) of tax reduction.
• A taxpayer that has many investment projects eligible for tax exemption or tax exemption and a reduction will only apply directly to taxpayers and be calculated based on the lax amounts payable under the Law on Non-Agricultural Land Use Tax and this Circular.

Here are the cases of tax exemption and reduction of non-agricultural land use tax.