Guidance on calculating land rents in Vietnam from August 1, 2024

Guidance on calculating land rents in Vietnam from August 1, 2024 (Image from the Internet)

On July 30, 2024, the Government of Vietnam issued Decree 103/2024/ND-CP stipulating land levy and land rent.

Regulations on the area for calculating land rents in Vietnam from August 1, 2024

According to Article 24 of Decree 103/2024/ND-CP, the area for calculating land rents in Vietnam is the land area with recorded land rent as per the decision on land lease, decision on adjustment of the land lease decision, decision on permission for changing the land use purpose, decision on extension of land use, decision on adjustment of land use period, decision on detailed planning adjustment, decision on permission for changing the form of land use, which must submit land rent in accordance with regulations (commonly referred to as the decision on land lease). If the area mentioned in the land lease contract is larger than the area mentioned in the decision on land lease, the calculating land rents in Vietnam area is determined according to the area mentioned in the land lease contract.

The area for calculating land rents in Vietnam in case of recognizing the right to lease land use is the land area recognized according to the information transfer form determining the financial obligations on land, which is transferred to the tax authority by the land management agency as stipulated in the Decree on issuance of the certificate or according to the signed land lease contract.

The area for calculating land rents in Vietnam as stipulated in Clauses 1 and 2, Article 24 of Decree 103/2024/ND-CP is measured in square meters (m^2^).

Land rental unit price in Vietnam from August 1, 2024

Article 26 of Decree 103/2024/ND-CP stipulates the Land rental unit price in Vietnam as follows:

* In the case of annual land rent without auction:

Annual Land rental unit price = Percentage (%) of Land rental unit price x Land price for calculating land rents in Vietnam. Where:

- The annual land rent percentage (%) ranges from 0.25% to 3%.

Based on local reality, the People’s Committee of the province determines the annual land rent percentage (%) for each area and road section according to the specific land use purpose, after consulting the People’s Council at the same level.

- The land price for calculating land rents in Vietnam is the land price in the Land Price Table (as stipulated in Points b and h, Clause 1, Article 159 of the Land Law 2024); determined in VND/square meter (VND/m^2^).

* In the case of land rent paid once for the entire lease period without auction:

- In the case of calculating land rents in Vietnam when the State recognizes the right to use leased land with a Lump-sum payment for the entire lease period for households and individuals as stipulated in Point h, Clause 1, Article 159 of the Land Law 2024, the Lump-sum Land rental unit price for the entire lease period is calculated as follows:

- In the case of calculating land rents in Vietnam for the cases stipulated in Points b and d, Clause 1, Article 160 of the Land Law 2024, the Lump-sum land rent for the entire lease period is the specific land price determined according to the regulations in the Decree on land price.

* In case of land use right auction, the Land rental unit price is the winning bid price according to the form of State land lease, either annual land rent or Lump-sum land rent for the entire lease period.

Guidance on calculating land rents in Vietnam from August 1, 2024

Based on Article 30 of Decree 103/2024/ND-CP, calculating land rents in Vietnam is as follows:

* For the case of annual land rent, the annual land rent is calculated as follows:

* For the case of Lump-sum land rent for the entire lease period:

- The Lump-sum land rent for the entire lease period is calculated as follows:

- The Lump-sum land rent for land with water surfaces is calculated as follows:

In which: Land rent for the land area without water surfaces and land rent for the land area with water surfaces are calculated according to Point a, Clause 2, Article 30 of Decree 103/2024/ND-CP.

- In case a public service provider chooses the form of State land lease with annual land rent as per Clause 3, Article 30 of the Land Law 2024, calculating land rents in Vietnam follows the regulations in this Decree.

If a public service provider does not choose the form of State land lease with annual land rent but uses buildings tied to the land for business, lease, joint-venture, joint operation as per the law on management and use of public assets, they must comply with financial obligations under laws on management and use of public assets and are not required to pay land rent as per Decree 103/2024/ND-CP.

* If the investor is granted an extension for land use of the project as per Clause 8, Article 81 of the Land Law 2024, in addition to the land rent, they must also pay an additional amount calculated as follows:

- If the investor is granted an extension for land use of the project as per Clause 8, Article 81 of the Land Law 2024, in addition to the land rent, an additional amount must be paid to the State calculated as follows:

In which:

+ The land price in the Land Price Table and the percentage (%) of the Land rental unit price are determined according to the purpose of land use leased by the State.

+ If the extension period is not a full month, 15 days or more are rounded to 01 month, and below 15 days are not counted for the additional amount for these days.

- The provision on deduction of compensation, support, resettlement costs and exemption, reduction of land rent do not apply to the amount stipulated in Point a, Clause 3, Article 30 of Decree 103/2024/ND-CP.

* If the land lessee paying annual land rent voluntarily returns the land according to Clause 2, Article 82 of the Land Law 2024, the land user must pay land rent up to the point when the State authority issues the land recovery decision as stipulated in the detailed provisions of some articles of the Land Law 2024; if the land recovery deadline as stipulated in the detailed provisions of some articles of the Land Law 2024 has passed and the State authority has not yet issued the land recovery decision, if the land user does not continue using the land, they do not have to pay land rent for this period.

* If the land user has utilized the land before the State authority issues the land lease decision or before signing the land lease contract (for cases recognizing the right to lease land use) and has not paid land rent for the period of land use, they must pay annual land rent for this period. The annual land rent is calculated according to the annual land rent percentage and the land price for each year of land use until the State issues the land lease decision. The calculation and payment of land rent from the time the State issues the land lease decision onwards are governed by Decree 103/2024/ND-CP.

* If the State authority decides to lease land according to the progress of the investment project, land recovery progress, compensation, support, resettlement according to Clause 4, Article 116 of the Land Law 2024, the calculating land rents in Vietnam and compensation, support, resettlement cost handling are carried out according to each land lease decision.

* If an organization using land under State land lease as per Article 120 of the Land Law 2024 is granted a Certificate as stipulated in Point a, Clause 2, Article 142 of the Land Law 2024, the land rent is calculated according to Clauses 1 and 2, Article 30 of Decree 103/2024/ND-CP.

* If when re-issuing the land use right certificate for a household or individual, there is an increase in the land area due to the actual survey data compared to the recorded data on the issued certificate and the parcel boundary remains unchanged from the time the certificate was issued according to the Decree on issuance of the certificate, the land user must pay land rent for the increased area according to the law at the time of the original certificate issuance.

Refer to Decree 103/2024/ND-CP for more details, which takes effect in Vietnam from August 1, 2024.

Decree 103/2024/ND-CP replaces Decrees 45/2014/ND-CP on land levy collection, Decree 46/2014/ND-CP on land rent and water surface rent collection; Decree 135/2016/ND-CP, Decree 123/2017/ND-CP amending certain provisions of the Decrees on land levy collection, land rent, and water surface rent; Decree 35/2017/ND-CP on land levy collection, land rent, and water surface rent in Economic Zones, High-Tech Zones; Decree 79/2019/ND-CP amending Article 16 of Decree 45/2014/ND-CP on land levy collection in Vietnam.

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