Shall the duration of agricultural land use tax exemption in Vietnam be extended until December 31, 2030?

Shall the duration of agricultural land use tax exemption in Vietnam be extended until December 31, 2030?

The Ministry of Finance has issued Official Dispatch 6560/BTC-CST in 2024 Download to seek opinions on the proposal to develop a National Assembly Resolution project to extend the duration of agricultural land use tax exemption as stipulated in Resolution 55/2010/QH12.

In the Draft Resolution of the National Assembly on extending the duration of the agricultural land use tax exemption, the Ministry of Finance proposed extending the duration of the agricultural land use tax exemption. Specifically, the Ministry of Finance suggested two solutions as follows:

Solution 1: Define the tax exemption period for agricultural land use as 5 years (continue tax exemption for agricultural land use from January 1, 2026, to the end of December 31, 2030).

Solution 2: Define the tax exemption period for agricultural land use as 10 years (continue tax exemption for agricultural land use from January 1, 2026, to the end of December 31, 2035).

Additionally, the Ministry of Finance stated that a 10-year tax exemption period is relatively long given the unpredictable fluctuations in the global economic situation and the socio-economic development strategy of Vietnam post-2030 has not been clearly oriented. To ensure the goal aligns with the viewpoints and policies of the Communist Party and the State regarding agriculture, farmers, and rural areas as well as the actual socio-economic conditions, the Ministry of Finance suggests implementing Solution 1 (tax exemption period for agricultural land use is 5 years).

As per the content of the submission to the National Assembly on the Resolution for extending the agricultural land use tax exemption period, it is expected that the Resolution will be submitted to the National Assembly for comments and approval at the 9th session of the 15th National Assembly (May 2025) and will take effect from January 1, 2026.

Download Official Dispatch 6560/BTC-CST in 2024 and the Draft Resolution on extending the agricultural land use tax exemption period.

Shall the duration of agricultural land use tax exemption in Vietnam be extended until December 31, 2030? (Image from the Internet)

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

Based on Article 14, Article 15, and Article 16 of Decree 74-CP in 1993, the subjects of agricultural land use tax exemption are defined as follows:

- Barren mountain land used for agricultural or forestry production, land for protective and special-use forests.

- Land replanted with perennial crops and land switched from annual crops to perennial or fruit trees during the basic construction period plus 3 years from when harvesting begins.

- Reclaimed land that has never been used for production or left fallow for at least 5 years up to the reclamation time when it’s brought into production:

+ If annual crops are planted, a 5-year tax exemption (7 years if on liberated land in mountains, swamps, and sea encroachment).

+ If perennial crops are planted, the tax exemption applies during the basic construction period plus 3 years from when harvesting begins (plus 6 years if planted on reclaimed land in mountains, swamps, and sea encroachment).

+ If single-harvest perennial crops are planted, taxes must be paid at 4% of the harvest value since harvesting begins.

- Reclaimed land funded by the State Budget for agricultural production, if annual crops are planted in mountains, swamps, and sea encroachment.

- Land of families moving to new economic zones:

+ Allocated land must be reclaimed for agricultural production.

+ Allocated land under current agricultural production used for annual cropping.

- Lands of farmers in highlands, mountains, borders, islands, and ethnic minority farmers facing significant production and living hardships specified for the following cases:

+ Farming on high mountain slopes, far islands from the mainland, terraced fields not plowable by buffaloes or cows.

+ Ethnic minority farmers living in high mountains and remote, isolated areas.

+ Ethnic minority farmers in other areas with difficult living conditions such as unexpected accidents, families of war invalids or martyrs, families with contributions to the revolution beyond those stipulated in items 2, 3, and 4 of Article 16 Decree 74-CP in 1993.

- Land of disabled, elderly, and unsupported farmers is specified for the following cases:

+ The household head is within working age but disabled, unable to work.

+ Disabled, elderly, single individuals without support.

- Land of households paying tax includes class 1/4 and 2/4 war invalids, class 1/3 and 2/3 sick soldiers.

- Land of martyr families is households with members receiving support for living expenses as per current regulations.

How many times a year is agricultural land use tax collected in Vietnam?

Based on Article 11 of Decree 74-CP in 1993, the agricultural land use tax collection is regulated as follows:

The agricultural land use tax year is calculated by the calendar year from January 1 to December 31.

Tax is calculated annually but collected 1 to 2 times each year depending on the main harvest season of each crop type in each locality.

Taxpaying households may pay taxes before the tax collection due date and may pay the entire annual tax amount in the first collection.

Upon the Tax Department Head’s recommendation, the Chairman of the Provincial People's Committee assigns start and end times for tax collection periods and announces them to the public.

In special cases where the agricultural land use tax rolls for 1994 are not ready before the first tax collection period, the Ministry of Finance guides provisional collection, finalizing by the end of 1994 according to the rolls.

Thus, agricultural land use tax collection occurs 1 to 2 times based on the main harvesting season of each crop type in each location.