Is land for industrial park construction subject to non-agricultural land use tax?

Which Land Group Does Industrial Zone Construction Land Belong To?

Based on the provisions of Clause 3, Article 9 of the Land Law 2024, non-agricultural land groups include the following types of land:

Article 9. Land Classification

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3. Non-agricultural land groups include the following types of land:

a) Residential land, including homestead land in rural areas, homestead land in urban areas;

b) Land for building office headquarters;

c) Land used for national defense and security purposes (hereinafter referred to as defense and security land);

d) Land for building public service works, including: land for building cultural, social, health, education and training, sports, science and technology, environment, meteorology and hydrology, diplomacy works, and other public service works or land for building the headquarters of other public service providers;

đ) Land for non-agricultural production and business, including: industrial zone land, industrial cluster land; commercial land; non-agricultural production establishment land; land used for mineral activities;

e) Land used for public purposes, including: land for traffic works; land for irrigation works; land for water supply and drainage works; land for natural disaster prevention works; land with historical-cultural relics, scenic spots, natural heritage; land for waste treatment works; land for energy and public lighting works; land for postal, telecommunication, and information technology infrastructure works; land for local markets, wholesale markets; land for public parks, recreational and community activities;

g) Land used for religious activities (hereinafter referred to as religious land); land used for belief activities (hereinafter referred to as belief land);

h) Cemetery land, funeral home, cremation facility land; land for storing ashes;

i) Land with specialized water surface;

k) Other non-agricultural land.

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Thus, land for industrial zone construction belongs to the non-agricultural land group.

Does Industrial Zone Construction Land Incur Non-Agricultural Land Use Tax?

The subject to non-agricultural land use tax is stipulated in Article 2 of the Law on Non-Agricultural Land Use Tax 2010 as follows:

Tax Subjects

1. Residential land in rural areas, homestead land in urban areas.

2. Non-agricultural production and business land, including: land for industrial zone construction; land for premises for production, business construction; land for mineral extraction and processing; land for manufacturing building materials and ceramics.

3. Non-agricultural land specified in Article 3 of this Law used for business purposes.

Thus, land for industrial zone construction is subject to non-agricultural land use tax.

Does Industrial Zone Construction Land Incur Non-Agricultural Land Use Tax? (Image from the Internet)

Basis for Calculating Non-Agricultural Land Use Tax on Industrial Zone Construction Land

According to Article 5 of the Law on Non-Agricultural Land Use Tax 2010, the basis for calculating non-agricultural land use tax on industrial zone construction land is the taxable price and tax rate.

(1) The taxable price for non-agricultural land use tax on industrial zone construction land is determined according to Article 6 of the Law on Non-Agricultural Land Use Tax 2010, amended by Article 249 of the Land Law 2024 as follows:

Taxable Price = Taxable Land Area x Price of 1m2 of Land

In which:

* Taxable land area is specified as follows:

- The taxable land area is the actual land area in use.

In the case of rights to use multiple parcels, the taxable land area is the total area of the parcels subject to tax.

In cases where land is allocated or leased by the State for industrial zone construction, the taxable land area does not include the area for building shared infrastructure;

- For underground construction works, a coefficient of 0.5 of the built-up land area divided by the total constructed area of organizations, families, or individuals using it is applied.

* The price of 1m2 of land is the land price according to the price schedule corresponding to the purpose of use and is stable over a 5-year cycle.

(2) The tax rate is determined according to Article 7 of the Law on Non-Agricultural Land Use Tax 2010:

- Land for non-agricultural production and business applies a tax rate of 0.03%.

- Land used contrary to its intended purpose or land not yet used conformably applies a tax rate of 0.15%. In the case of investment project land phased according to the investor's registration approved by a competent state agency, it is not considered as unused land and a tax rate of 0.03% applies.

- Encroached or occupied land applies a tax rate of 0.2% and is not subject to limits. Tax payment is not a basis for recognizing the legal land use rights of the taxpayer over the encroached or occupied land area.