Can I mortgage or contribute capital with land use rights when I owe land use levy? How to conduct repayment of outstanding land levies in Vietnam?
Can individuals and organizations make capital contributions with land use rights?
Pursuant to Article 34 of the 2020 Law on Enterprises of Vietnam on the contributed assets as follows:
Contributed assets
1. Contributed assets include VND, convertible foreign currencies, gold, land use right (LUR), intellectual property rights, technologies, technical secrets, other assets that can be converted into VND.
2. Only the individual or organization that has the lawful right to ownership or right to use the asset mentioned in Clause 1 of this Article may contribute it as capital as prescribed by law.
Thus, individuals and organizations can make capital contributions with land use rights and must strictly comply with the above regulations.
Can I mortgage or contribute capital with land use rights when I owe land use levy? How to conduct repayment of outstanding land levies in Vietnam? (Image from the Internet)
Is it possible to mortgage, contribute capital with land use rights while still owed land use levy?
Pursuant to Clause 1, Article 168 of the 2013 Land Law of Vietnam on the time to exercise the rights of land users as follows:
Time to exercise the rights of land users
1. Land users may exercise the rights to transfer, lease, sublease, donate and mortgage land use rights and to contribute land use rights as capital upon receipt of a certificate. In case of exchanging agricultural land use rights, land users may exercise their rights upon receipt of a decision on land allocation or land lease. In case of inheritance of land use rights, land users may exercise their rights upon receipt of a certificate or when they are eligible to be granted a certificate.
A land user who is allowed to delay the performance of, or owe, his/her financial obligations, may exercise his/her rights only after fulfilling all financial obligations.
2. The transfer of land use rights within an investment project on construction of houses for sale or lease or the transfer of land use rights together with the whole project within an investment project on construction of infrastructure for transfer or lease may only be conducted upon receipt of a certificate and satisfaction of all conditions prescribed in Article 194 of this Law.
Thus, in case the land user has not yet fulfilled the financial obligations for the land plot, specifically owed land use levy, he/she is not allowed to exercise the right to mortgage or contribute land use rights as capital.
How to conduct repayment of outstanding land levies in Vietnam?
Pursuant to Clause 2, Article 12 of Circular No. 76/2014/TT-BTC stipulating the repayment of outstanding land levies as follows:
Deferral of land levy payment and payment of outstanding land levies
…
2. Repayment of outstanding land levies:
a) When repaying outstanding land levies, the households or individuals shall declare repayment of outstanding land levies at the tax authority using form in Appendix 03 issued together with this Circular, the tax authority shall complete the procedures for repayment of outstanding land levies according to the logbook on debts.
If the households or individuals repay outstanding land levy for after 5 years from the date on which deferral is recorded in the Certificate or fail to repay outstanding land levies, the outstanding land levies imposed on area of land within the quota or exceeding the quota shall be converted to rate (%) of failure to pay land levies and the households or individuals must pay land levies on such area:
Land levy payable equals (=) outstanding land levy divided by (:) total land levy determined according to land prices on the day on which the Certificate is granted multiplied by (x) land levy determined according to land prices on the repayment date.
b) After the land user repay debts, the tax authority shall recognize repayment according to debt logbook using form in Appendix No. 04 issued together with this Circular, then the land user shall follow the procedures for debt cancellation in the Certificate at the Office of land registration.
Thus, the repayment of outstanding land levies shall comply with the above provisions.
After completing the debt payment and receiving confirmation from the tax authority, the land user will prepare a set of documents to send to the Land Use Rights Registration Office (or the Department of Natural Resources and Environment) where the land is located to carry out the procedures for debt cancellation in the Certificate in accordance with the law.
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