What is the scope of regulation of the Law on Non-Agricultural Land Use Tax of Vietnam?

What is the scope of regulation of the Law on Non-Agricultural Land Use Tax of Vietnam?

Pursuant to Article 1 of the 2010 Law on Non-agricultural Land Use Tax:

The current Law on Non-agricultural Land Use Tax applies to the scope regarding taxable objects, non-taxable objects; taxpayers; basis for tax calculation; registration, declaration, calculation, and payment of tax; exemption and reduction of non-agricultural land use tax.

* In addition, regarding taxable non-agricultural land use objects (Article 2 of the 2010 Law on Non-agricultural Land Use Tax) prescribed as follows:

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

- Non-agricultural production and business land, including: land for industrial zone construction; land used for construction ground of production and business premises; land for mining and mineral processing; land for building material production and ceramic making.

- Non-agricultural land as prescribed in Article 3 of the 2010 Law on Non-agricultural Land Use Tax used for business purposes.

Simultaneously, Article 3 of the 2010 Law on Non-agricultural Land Use Tax prescribes non-taxable objects as follows:

Non-agricultural land not used for business purposes includes:

- Land used for public purposes including transportation, irrigation; land for the construction of cultural, medical, educational, training, sports facilities serving public interest; land with historical-cultural relics, natural landmarks; land for constructing other public works according to regulations of the Government of Vietnam;

- Land used by religious establishments;

- Land for graveyards, cemeteries;

- Land for rivers, streams, canals, ditches, and specialized water surfaces;

- Land with structures being communal houses, temples, shrines, shrines, ancestral halls, family worship;

- Land for building offices, constructing career works, land used for the purposes of national defense and security;

- Other non-agricultural land according to legal regulations.

What is the scope of regulation of the Law on Non-Agricultural Land Use Tax of Vietnam? (Image from the Internet)

Which entity is the taxpayer of non-agricultural land use tax in Vietnam?

According to Article 4 of the 2010 Law on Non-agricultural Land Use Tax on taxpayers, as follows:

- Taxpayers are organizations, households, individuals having the right to use land subject to tax as stipulated in Article 2 of the 2010 Law on Non-agricultural Land Use Tax.

- In case organizations, households, individuals have not been granted the Certificate of land use rights, house ownership, and other assets attached to land (hereinafter collectively referred to as the Certificate), the current land user is the taxpayer.

- Taxpayers in specific cases are determined as follows:

+ In case the State leases land to implement investment projects, the lessee of the homestead land is the taxpayer;

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

+ In case the land has been granted a Certificate but is in dispute, before the dispute is resolved, the current land user is the taxpayer. The tax payment is not a basis for resolving disputes over land use rights;

+ In case multiple persons share land use rights on a parcel, the taxpayer is the legal representative of those sharing the land use right on that parcel;

+ In case the land user contributes capital for business purposes by land use rights that form a new legal entity having land use rights subject to tax prescribed in Article 2 of the 2010 Law on Non-agricultural Land Use Tax, the new legal entity is the taxpayer.

How is the non-agricultural land use tax calculated in Vietnam?

According to Article 8 of Circular 153/2011/TT-BTC, the amount of non-agricultural land use tax payable is calculated using the following formula:

(1) For the area of homestead land, business production land, non-agricultural land used for business purposes:

Tax payable (VND) = Arising Tax (VND) - Tax Exemptions or Reductions (if any) (VND)

Where the arising tax is determined as follows:

Arising Tax (VND) = Taxable Land Area (m2) x Price per m2 of land (VND/m2) x Tax Rate (%)

(2) For multi-story multi-unit houses, apartment buildings (including basements) and constructions under the ground:

Tax payable = Arising Tax - Tax Exemptions or Reductions (if any)

Where the arising tax is determined as follows:

Arising Tax = Floor area of each organization, household, individual x Allocation factor x Price per m2 of corresponding land x Tax Rate

In case there are only constructions under the ground:

Arising Tax = Utilization area of the construction of the organization, household, individual x Allocation factor x Price per m2 of corresponding land x Tax Rate

(3) In cases where non-agricultural land is used for business purposes but the area of land used for business cannot be determined:

Arising Tax = Business Use Land Area (m2) x Price per m2 of land (VND) x Tax Rate (%)

Business Use Land Area (m2) = Total Land Area Used x (Business Revenue : Total Annual Revenue).