How to calculate agricultural land use tax in Vietnam?

How to calculate agricultural land use tax in Vietnam?

According to the provisions in Chapter 2 of the Law Agricultural Land Use Tax 1993 and guidelines in Chapter 2 of Decree 74-CP in 1993, the agricultural land use tax is calculated according to the following formula:

Agricultural Land Use Tax = Land Area x Tax Rate in kilograms of rice per unit area of each land grade

Where:

* Land Area

- The taxable land area for each taxpayer household is the actual land area used, recorded in the State cadastral register, or the most recent survey results verified by the competent land management authority following the Land Law.

In cases where the locality has not yet established a cadastral register and the survey data is not accurate, nor confirmed by the competent land management authority, the taxable land area shall be the land area recorded in the taxpayer household's declaration form.

In special cases where land allocation according to the Decree on cooperatives and production brigades has not been completed for individual farmer households, the taxable land area for each household shall be self-declared and verified by the head of the cooperative or agricultural production brigade.

- The taxable area of each plot is the actual area used, allocated to each taxpayer household, consistent with the area recorded in the cadastral register or in the household head's declaration form.

- The land management authorities at various levels within the scope of their authority as defined by the Land Law are responsible for cooperating with the tax authorities to determine the taxable areas in their localities.

* Tax Rate in kilograms of rice per unit area of each land grade

- For annual crops and water surface used for aquaculture:

- For perennial crops:

- For perennial fruit trees planted on annual cropland, the tax rates are as follows:

+ 1.3 times the tax rate for annual cropland of the same grade, if the land is grade 1, 2, or 3;

+ The same as the tax rate for annual cropland of the same grade, if the land is grade 4, 5, or 6.

- For land planting single-harvest perennial crops, the tax is 4% of the value of the harvested product.

Note: Households using agricultural land exceeding the area limits as prescribed in the Land Law, in addition to paying the agricultural land use tax, must pay an additional tax as stipulated by the Standing Committee of the National Assembly for the excess area.

How to calculate agricultural land use tax in Vietnam? (Image from the Internet)

What types of lands are subject to agricultural land use tax in Vietnam?

According to Article 2 of the Law Agricultural Land Use Tax 1993 and Article 2 of Decree 74-CP in 1993, the types of lands subject to agricultural land use tax include:

- Cropland, which includes annual cropland, perennial cropland, and grassland.

- Annual cropland includes land growing crops with a growing cycle (from planting to harvesting) not exceeding 365 days such as rice, corn, vegetables, peanuts, etc., or crops planted once but harvested for several years without going through a basic construction period such as sugarcane, bananas, sedge, hemp, citronella, pineapples, etc.

- Perennial cropland includes land growing crops with a growing cycle of more than 365 days, planted once but harvested over many years and requiring a basic construction period before harvesting such as rubber, tea, coffee, oranges, mandarins, longans, oil palms, coconuts, etc.

- Grassland is land used by the owner for growing grass to feed livestock.

- Water surface used for aquaculture includes land where the owner uses it especially for aquaculture or both aquaculture and cropping, but fundamentally not for other purposes.

- Forested land includes land that has been afforested and assigned to organizations or individuals for management, care, and exploitation, excluding barren hills and mountains.

In case the land is not used for taxable purposes as specified in this article, the landowner must still pay the tax as prescribed by the Law Agricultural Land Use Tax.

What are cases of exemptions and reductions of agricultural land use tax in Vietnam?

According to Chapter 5 of the Law Agricultural Land Use Tax 1993, cases eligible for exemption or reduction of agricultural land use tax include:

- Exemption for bare hills and mountains used for agriculture and forestry production, protection forests, and special-use forests.

- Exemption for newly reclaimed land not covered by the above provisions used for production:

+ Annual crops: 5 years; for newly reclaimed land in mountainous areas, swamps, and land reclaimed from the sea: 7 years;

+ Perennial crops: tax exemption during the basic construction period and an additional 3 years from the time of harvesting. For new homestead land in mountainous areas, swamps, and land reclaimed from the sea, an additional 6 years.

- For timber trees and single-harvest perennial crops, tax is only paid upon harvesting as prescribed.

- Exemption for re-cultivating land for perennial crops and land changing from annual crops to perennial crops, fruit trees: during the basic construction period and an additional 3 years from the time of harvesting.

- Households relocating to new economic zones for agricultural production are exempt from tax for the prescribed period and an additional 2 years.

- If allocated land is currently being used for agricultural production, tax exemption is valid for 3 years from the date of receiving the land.

- In cases of natural disasters or pests causing crop damage, agricultural land use tax is reduced or exempt for each taxpayer household for each production season as follows:

+ Damage between 10% and under 20%, tax reduction corresponding to the damage rate;

+ Damage between 20% and under 30%, tax reduction by 60%;

+ Damage between 30% and under 40%, tax reduction by 80%;

+ Damage from 40% or more, tax exemption 100%.

- Tax exemption or reduction for farming households in highland, mountainous, border, and island areas who face production and living hardships;

- Tax exemption or reduction for ethnic minority farming households facing production and living hardships;

- Tax exemption for farming households who are disabled, elderly without dependents.

- Tax exemption for taxpayer households with war invalids of grades 1/4 and 2/4 and sick soldiers of grades 1/3 and 2/3;

- Tax exemption or reduction for taxpayer households who are martyrs' families;

- Tax reduction for taxpayer households with war invalids and sick soldiers not eligible for tax exemption.