Addition of 5 Subjects Eligible for Land Rent Exemption and Reduction

According to the contents of Circular 333/2016/TT-BTC amending and supplementing a number of articles of Circular 77/2014/TT-BTC which guides certain articles of Decree 46/2014/ND-CP by the Government of Vietnam regarding land rent and water surface rent collection, 5 subjects are eligible for land rent exemption or reduction, including:

Land leased by the State for investment in construction and business of infrastructure in industrial zones, industrial clusters, and export processing zones is exempted from land rent during the construction period.

Firstly, cases where the State leases land with annual land rent payment before December 27, 2015, which were eligible for land rent incentives according to Decree 108/2006/ND-CP but are now not included in the list of investment incentive areas or receive lower incentive levels according to Decree 118/2015/ND-CP, will continue to enjoy the same level of incentives regarding land rent exemption or reduction as stipulated by laws before December 27, 2015, for the remaining incentive period (if any).

Secondly, cases where the State leases land with annual land rent payment before December 27, 2015, which were not eligible for land rent incentives according to Decree 108/2006/ND-CP but are now included in the list of investment incentive areas according to Decree 118/2015/ND-CP, will enjoy land rent exemption or reduction according to Clauses 1 and 3, Article 19, and Article 20 of Decree 46/2014/ND-CP for the remaining incentive period (if any) from the point of fully submitting the application for land rent exemption or reduction as regulated.

Thirdly, investment projects with a capital scale of VND 6,000 billion or more (except for commercial housing projects); projects of mineral resource exploitation; projects on production, business of goods, and services subject to special consumption tax as per the Law on Special Consumption Tax (excluding automobile manufacturing); and other projects not eligible for land rent exemption or reduction as per land laws, if disbursing a minimum of VND 6,000 billion within 3 years from the date the competent state authority issues the Investment Registration Certificate or Investment Decision, are exempt from land rent.

Specifically: the land rent exemption period is 11 years if not in the investment incentive sector; 15 years if in the investment incentive sector; the entire land lease term if in the specially preferential investment sector. The list of investment incentive sectors and specially preferential investment sectors shall comply with the investment law regulations.

Fourthly, high-tech enterprises, science and technology enterprises, scientific and technological organizations are exempt from land rent throughout the land lease term for land used for constructing scientific research facilities, provided they meet relevant conditions for scientific and technological activities (if any), including: land for constructing laboratories, land for building technology and science and technology business incubators, land for building experimental facilities, and land for building trial production facilities.

Fifthly, investors leasing land from the State for investment in the construction and business of infrastructure in industrial zones, industrial clusters, and export processing zones are exempt from land rent during the construction period as per the provisions in Clause 10, Article 19 of Decree 46/2014/ND-CP (supplemented by Clause 6, Article 3 of Decree 135/2016/ND-CP).

In cases where industrial zones, industrial clusters, export processing zones span multiple districts with different incentive levels, the infrastructure construction and business investors will enjoy incentives according to the area with the largest land area.

Circular 333/2016/TT-BTC takes effect from February 10, 2017.

Source: Business Forum

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