What formula is the minimum state budget contribution (m3) calculated by the procuring entity? Are state budget contributions (M3) the land use levy in Vietnam?
What formula is the minimum state budget contribution (m3) calculated by the procuring entity?
According to Point a, Clause 3, Article 48 of Decree No. 25/2020/ND-CP stipulating the bid evaluation criteria and method as follows:
Bid evaluation criteria and method
…
3. Financial criteria and evaluation method:
a) Financial criteria:
…
- Investment efficiency (M3).
Where:
…
+ M3 is the investor’s proposed state budget contributions specified in the bid in addition to the investor’s liabilities to state budget prescribed by applicable law.
At the same time, according to Point k, Clause 2, Article 47 of Decree No. 25/2020/ND-CP stipulating the preparation of bidding documents as follows:
Preparation of bidding documents
…
2. Contents of bidding documents:
k) Minimum state budget contribution (m3) calculated by the procuring entity as follows:
m3 = s x ΔG x k, where:
- S: area of levied land or leased land;
- ΔG: average increase in value after land use right auction per unit of area of land with the same uses in the same area. In case such a land area is not available, land data of administrative divisions with similar socio-economic conditions may be used;
- k: coefficient of average increase in value after land use right auction, with account taken of the similarity of the land area of the project and other factors (if any).
This value is relative, is the basis for investors to propose state budget contributions, and independent from the land levy or land rent payable to the investor according to land laws.
Thus, according to the above regulations, the minimum state budget contribution (m3) is calculated by the procuring entity according to the above formula.
What formula is the minimum state budget contribution (m3) calculated by the procuring entity? Are state budget contributions (M3) the land use levy in Vietnam? (Image from the Internet)
Are state budget contributions (M3) the land use levy in Vietnam?
Pursuant to Point c, Clause 1, Article 59 of Decree No. 25/2020/ND-CP (amended by Clause 8, Article 108 of Decree No. 31/2021/ND-CP) stipulating the contract conclusion and publishing of contract information:
Contract conclusion and publishing of contract information
1. Rules for contract conclusion
…
c) Land levy or land rent payable as determined in accordance with regulation of law on land plus the amount of payment to the state budget as proposed by the selected investor shall be recognized as market price at the time of land allocation or land lease specified in the contract.
At the same time, according to the provisions of Clauses 1 and 2, Article 60 of Decree No. 25/2020/ND-CP (amended by Clause 9 Article 108 of Decree No. 31/2021/ND-CP) on initiation of a land-using project as follows:
Initiation of a land-using project
1. After the contract is concluded, the selected investor or project enterprise established by the selected investor or project enterprise established by the selected investor to execute a project to execute a project shall cooperate with a specialized agency in proposing land expropriation and the plan for compensation, assistance and relocation to a competent authority in accordance with land laws. The investor shall pay M2 and M3 amounts as proposed in the bid to the competent authority according to the project progress. Interest shall not be charged on the payment for compensation, assistance and relocation.
2. Procedures for land allocation/land lease; determination of land levy/land rent:
a) After the compensation, assistance and relocation amount has been paid, the procedures for land allocation/land lease specified in Clause 3 Article 68 of the Government’s Decree No. 43/2014/ND-CP and its revising or replacing document (if any) shall apply.
b) The provincial land authority shall organize the determination of land levy/land rent, submit a report to the land pricing council before submission to the People’s Committee of the province for approval.
In Official Dispatch No. 3784/TCT-KK in 2022, the General Department of Taxation guides as follows:
Based on the above provisions, the value of payment to the state budget in cash (M3) is proposed in the bidding documents:
- Not the land use levy specified in Decree No. 45/2014/ND-CP and the 2019 Law on Tax Administration.
- It is not a payment to the state budget from the sale of assets on land or the transfer of land use rights in accordance with the provisions of the Law on Management and Use of Public Property belonging to the State Budget and the Law on Tax Administration.
- Not other revenues belonging to the state budget collected by tax authorities.
To which agency will state budget contributions (M3) be paid?
In Official Dispatch No. 3784/TCT-KK in 2022, the General Department of Taxation guides as follows:
Based on the above provisions, the state budget contributions (M3) proposed in the bidding documents:
- To be prescribed to be submitted to the competent state agency along with the value of compensation, support and resettlement.
- The Ministry of Finance has issued Official Dispatch No. 16280/BTC-KBNN in 2018 guiding the state budget contributions M3 (attached photocopy), which investors are requested to pay money into state budget revenue and account in detail in subsection 4549 "Other voluntary contributions" until new instructions are issued.
The General Department of Taxation proposes the Tax Department to study and submit to the People's Committee of the city to assign the competent agency to collect the value of compensation, support and resettlement to collect the state budget contributions M3 proposed in the bidding documents.
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