What is the current state policy on exemption and reduction of non-agricultural land use tax in Vietnam?

What is the current state policy on exemption and reduction of non-agricultural land use tax in Vietnam?

In the context of a rapidly developing economy, land still remains a vital factor in the construction and development of a nation. To support businesses and citizens, especially households using land for non-agricultural purposes, the State has issued policies on exemption and reduction of non-agricultural land use tax.

Below are some of the current state policies on non-agricultural land use tax exemption and reduction:

(1) Non-agricultural land use tax exemption policy

Pursuant to Article 10 of Circular 153/2011/TT-BTC (supplemented by Article 4 of Circular 130/2016/TT-BTC), there are regulations on the exemption of non-agricultural land use tax as follows:

- Land of investment projects in fields particularly encouraged for investment; investment projects in areas with extremely difficult socio-economic conditions; investment projects in fields encouraged for investment in areas with difficult socio-economic conditions; land of enterprises using over 50% of the labor as war invalids or sick soldiers.

The list of investment-encouraged fields, areas with difficult socio-economic conditions, and areas with extremely difficult socio-economic conditions is implemented according to the regulations of the investment law.

The number of employees who are war invalids or sick soldiers must be the regular average annual labor force as stipulated in Circular 40/2009/TT-LDTBXH dated December 3, 2009, by the Ministry of Labor - Invalids and Social Affairs and its amendments.

- Land of establishments implementing socialization in activities such as education, vocational training, healthcare, culture, sports, and environment includes:

+ Non-public establishments established and operating under the conditions prescribed by the competent State authorities in private investment fields;

+ Organizations and individuals operating under the Enterprise Law 2020 having investment projects, joint ventures, or links or establishing establishments operating in private investment fields with sufficient operational conditions as prescribed by competent State authorities;

+ Public service units raising capital and forming partnerships according to legal provisions to establish independently accounted entities or enterprises operating in private investment fields as decided by competent State authorities;

+ In the case of foreign investment projects in private investment fields, the decision is made by the Prime Minister of the Government of Vietnam Pursuant to the proposal of the Ministry of Planning and Investment and relevant specialized ministries.

Establishments implementing private investment in education, vocational training, healthcare, culture, sports, and environment must meet criteria on scale and standards according to a Decision of the Prime Minister of the Government of Vietnam.

- Land for the construction of gratitude houses, great unity houses, nursing homes for the elderly, disabled people, orphans, and social rehabilitation facilities.

- Residential land within the limit in areas with extremely difficult socio-economic conditions.

- Residential land within the limit of individuals engaged in revolutionary activities before August 19, 1945; war invalids of grades 1/4, 2/4; individuals entitled to policies equivalent to those for war invalids of grades 1/4, 2/4; sick soldiers of grade 1/3; heroes of the people's armed forces; Vietnamese Heroic Mother; biological parents, caretakers of martyrs when they were minors; spouses of martyrs; children of martyrs receiving monthly allowances; individuals affected by chemical warfare agents; individuals affected by chemical warfare agents in difficult family circumstances.

- Residential land within the limit of poor households according to the Decision of the Prime Minister of the Government of Vietnam on the poverty line. In cases where the provincial People's Committee specifies the poverty line applicable in the locality according to legal provisions, the determination of poor households is Pursuant to the poverty line issued by the locality.

- Households and individuals who have their homestead land recovered during the year according to a plan approved by competent State authorities are exempt from tax in the actual year of recovery, both for the land at the recovery location and at the new residence.

- Land with gardens recognized by competent State authorities as historical-cultural relics.

- Taxpayers facing difficulties due to force majeure events if the damage value of land and housing on the land exceeds 50% of the tax calculation value.

In such cases, the taxpayer must have confirmation from the commune-level People's Committee in the area where the damage occurs.

- Non-agricultural land use tax exemption for households and individuals whose calculated annual non-agricultural land use tax (after deducting any exempted or reduced tax according to the Non-Agricultural Land Use Tax Law and its guiding documents) amounts to fifty thousand dong or less. If a household or individual owns multiple parcels within the province or centrally managed city, the non-agricultural land use tax exemption under this article is Pursuant to the total tax obligation for all parcels. The order and procedures for non-agricultural land use tax exemption under this article are implemented following the guidance in Circular 153/2011/TT-BTC.

For households and individuals eligible for non-agricultural land use tax exemption as guided in this Circular but have already paid tax into the state budget, the tax agency will facilitate reimbursement according to the regulations in the Tax Administration Law 2019 and its guiding documents.

(2) Non-agricultural land use tax reduction policy

Pursuant to Article 11 of Circular 153/2011/TT-BTC, there is a 50% reduction in the tax payable in the following cases:

- Land of investment projects in fields favored for investment; investment projects in areas with difficult socio-economic conditions; land used by enterprises employing from 20% to 50% of the labor as war invalids or sick soldiers.

The list of investment-encouraged fields, areas with difficult socio-economic conditions, and areas with extremely difficult socio-economic conditions are implemented according to the regulations of the investment law.

The number of employees who are war invalids or sick soldiers must be the regular average annual labor force as stipulated in Circular 40/2009/TT-LDTBXH dated December 3, 2009, by the Ministry of Labor - Invalids and Social Affairs and its amendments.

- Residential land within the limit in areas with difficult socio-economic conditions.

- Residential land within the limit of war invalids of grades 3/4, 4/4; individuals entitled to policies equivalent to those for war invalids of grades 3/4, 4/4; sick soldiers of grades 2/3, 3/3; children of martyrs not receiving monthly allowances.

- Taxpayers facing difficulties due to force majeure events if the damage value of land and housing on land ranges from 20% to 50% of the tax calculation value.

In such cases, the taxpayer must have confirmation from the commune-level People's Committee where the damage occurs.

>> See more: To what extent can a family benefit from the state policy on exemption and reduction of non-agricultural land use tax?

What is the current state policy on exemption and reduction of non-agricultural land use tax in Vietnam? (Image from the Internet)

Who are the taxpayers of non-agricultural land use tax in Vietnam?

Pursuant to Article 4 of the Non-Agricultural Land Use Tax Law 2010, it is stipulated who are the taxpayers of non-agricultural land use tax as follows:

- Taxpayers are organizations, households, and individuals with land use rights subject to tax as prescribed in Article 2 of the Non-Agricultural Land Use Tax Law 2010.

- In cases where organizations, households, or individuals have not been granted a Certificate of Land Use Rights, House Ownership, and Other Assets attached to Land (hereinafter referred to as the Certificate), the current land user is the taxpayer.

- Taxpayers in specific cases are regulated as follows:

+ In the case where the State rents land for an investment project, the homestead land renter is the taxpayer;

+ In cases where the land user leases the land under a contract, the taxpayer is determined according to the agreement in the contract. If the contract does not specify the taxpayer, the land user is the taxpayer;

+ In cases where land has been granted a Certificate but is under dispute, until the dispute is resolved, the current land user is the taxpayer. Paying tax is not a basis for resolving land use rights disputes;

+ In cases where multiple people have the right to use a parcel, the taxpayer is the legal representative of all those who have rights to the parcel;

+ In cases where the land user contributes capital in business by land use rights and forms a new legal entity with land use rights subject to tax as prescribed in Article 2 of the Non-Agricultural Land Use Tax Law 2010, the new legal entity is the taxpayer.

What are the principles for calculating non-agricultural land use tax in Vietnam?

Pursuant to Clause 1, Article 8 of Circular 153/2011/TT-BTC, the principles for calculating non-agricultural land use tax are stipulated as follows:

- The payable tax for each taxpayer is determined within one (01) province.

- If a taxpayer has taxable land in multiple districts within one (01) province, the payable tax is determined for each parcel at the Tax agency where the taxable land is located; if the taxpayer has a parcel exceeding the limit or the total area of taxable land exceeds the limit at the place of land use right, they must declare a comprehensive total at the Tax agency of their choice according to Article 16 of Circular 153/2011/TT-BTC.

- In cases where there is a change in the taxpayer during the year, the payable tax for each taxpayer is calculated from the month of the change.

In cases where there are factors causing a change in tax calculation (except for changes in the price per m2 of taxable land) during the year, the payable tax is determined from the month of the change.