What is the determination of the non-agricultural land use taxable land area in Vietnam?

Which types of land are subject to non-agricultural land use tax in Vietnam?

According to Article 2 of the Non-Agricultural Land Use Tax Law 2010, the objects subject to non-agricultural land use tax include:

- Residential land in rural and urban areas.

- Non-agricultural production and business land, including land for the construction of industrial parks; land for the construction of production and business establishments; land for mineral exploitation and processing; and land for the production of construction materials and pottery articles.

- Non-agricultural land specified in Article 3 of the Non-Agricultural Land Use Tax Law 2010 which is used for commercial purposes.

What is the determination of the non-agricultural land use taxable land area in Vietnam? (Image from the Internet)

What is the determination of the non-agricultural land use taxable land area in Vietnam?

Under Clause 2, Article 6 of the Non-Agricultural Land Use Tax Law 2010, the non-agricultural land use taxable land area is specified as follows:

- The taxable land area is the actually used land area.

+ When a person has the right to use many residential land plots, the taxable land area is the total area of taxable land plots.

+ When land is allocated or leased by the State for the construction of an industrial park, the taxable land area is exclusive of the land area for the construction of infrastructure facilities under common use;

- For residential land of a multi-story building with many users or a condominium with areas for both dwelling and commercial purposes, the taxable land area is the allocation coefficient multiplied by the area of the apartment of each user.

+ The allocation coefficient is the land area for the construction of a multistory building with many users or a condominium divided by the total area of apartments of users.

+ If a multi-story building with many users or a condominium has a basement, 50% of the basement area used by organizations, households and individuals shall be added to the total area of their apartments for calculating the allocation coefficient;

- For underground construction works, the applicable allocation coefficient is 0.5 of the constructed land area divided by the total area of works used by organizations, households and individuals.

What are the non-agricultural land use tax rates in Vietnam?

According to Article 7 of the Non-Agricultural Land Use Tax Law 2010, the non-agricultural land use tax rates are as follows:

- Tax rates for residential land, including land used for commercial purposes, to be applied according to the Partially Progressive Tariff are specified as follows:

- The residential land quota used as a basis for tax calculation is the new quota of residential land allocation set by provincial-level People’s Committees from the effective date of this Law.

When residential land quotas have been set before the effective date of this Law, the following provisions shall be applied:

+ When the residential land quota set before the effective date of this Law is lower than the new quota of residential land allocation, the new quota will be used as a basis for tax calculation;

+ When the residential land quota set before the effective date of this Law is higher than the new quota of residential land allocation, the old quota will be used as a basis for tax calculation.

- Residential land of multi-story buildings with many households, condominiums or underground construction works is subject to the tax rate of 0.03%.

- Non-agricultural production and business land is subject to the tax rate of 0.03%.

- Non-agricultural land specified in Article 3 of the Non-Agricultural Land Use Tax Law 2010 which is used for commercial purposes is subject to the tax rate of 0.03%.

- Land used for improper purposes or land not yet used under regulations is subject to the tax rate of 0.15%. Land of a phased investment project as registered by the investor and approved by a competent state agency will not be regarded as unused land and is subject to the tax rate of 0.03%.

- Encroached or appropriated land is subject to the tax rate of 0.2% and has no applicable quota. Tax payment does not serve as a basis for recognizing taxpayers’ lawful land use rights for the encroached or appropriated land area.

What are the cases of non-agricultural land use tax exemption in Vietnam?

According to Article 9 of the Non-Agricultural Land Use Tax Law 2010, non-agricultural land use tax is exempted in the following cases:

- Land of investment projects in domains eligible for special investment promotion; investment projects in areas with extreme socio-economic difficulties; investment projects in domains eligible for investment promotion in areas with socio-economic difficulties; and land of enterprises with over 50% of their employees being war invalids and diseased soldiers.

- Land of establishments carrying out socialized educational, vocational training, healthcare, cultural, sports or environmental activities.

- Land for the construction of houses of gratitude, houses of great solidarity, establishments nurturing lonely aged people, people with disabilities or orphans, and social-disease treatment establishments.

- Residential land within the set quota in areas with extreme socioeconomic difficulties.

- Residential land within the set quota , of revolutionary activists before August 19, 1945; war invalids of 1/4 or 2/4 grade and people enjoying policies like these war invalids; diseased soldiers of 1/3 grade; people’s armed forces heroes; heroic Vietnamese mothers; natural parents of, or people nurturing, martyrs when they were minors; spouses of martyrs; martyrs’ children eligible for monthly allowances; agent orange victims who are revolutionary activists; and agent orange victims with difficult family circumstances.

- Poor households’ land within the set quota under the Government’s regulations.

- Households and individuals whose residential land is actually recovered in a year under the approved planning or plan will be exempt from tax on the recovered land and the land in the new place of residence in that year.

- Land with garden houses certified by a competent state agency as historical-cultural relics.

- Taxpayers who face difficulties due to force majeure circumstances if the value of damage related to land and houses on land accounts for over 50% of the taxable price.