Order of exemption and reduction of agricultural land use tax in Vietnam

Order of exemption and reduction of agricultural land use tax in Vietnam (Internet image)

Article 5 of Circular 120/2011/TT-BTC stipulates that the order to issue the decision on exemption and reduction of agricultural land use tax shall comply with the provisions of the law on tax administration, namely:

1. Order of exemption and reduction:

• Based on the list of tax exemption or reduction sent by the commune-level People's Committee together with declaration records of the taxpayers and papers to prove objects of tax exemption or reduction of the taxpayers, the Branch of Tax determines the tax amount exempted or reduced of each taxpayer.

• For taxpayers which taxes are managed directly by the Branch of Tax (including the case managed by the Department of Tax but the taxes collection are authorized for the Branch of Tax), the Branch of Tax shall set up its own list and amount of tax exempted or reduced of each taxpayer to submit to the Department of Tax for approval and promulgation of decisions on tax exemption or reduction for taxpayers.

• For taxpayers under management of the tax collection by the Tax Branch, director of the Tax Branch shall issue the decision on tax exemption or reduction accompanied by a list of taxpayers exempted or reduced of each commune.

• Pursuant to the list of taxpayers exempted or reduced agricultural land use tax that were determined by the tax agency, commune-level People's Committee announces the tax amount exempted or reduced to each taxpayer that has been approved and posts up publicly in the convenient places for taxpayers’ knowledge.

• For the cases of tax exemption under the provisions of Clause 1, Article 1 of the Decree No.20/2011/ND-CP, the tax agency issues a decision on lump-sum tax exemption for many years corresponding to time limit of the tax exemption of the specific cases as prescribed by law.

2. Sending reports on the tax exemption and reduction

• Tax Branches send reports on the tax exemption and reduction made by the Tax Branches in 2011 to the Tax Departments of provinces and cities to monitor and inspect. Every year, if having the adjustment of objects and the tax amount exempted or reduced, the Tax Branches shall send additional reports to the Tax Departments of provinces and cities. The reports must be submitted to the Tax Departments of provinces and cities within 15 days from the date of issue of decision on exemption or reduction.

• The Tax Departments of provinces and centrally-run cities synthesize the reduction or exemption of agricultural land use tax of the locality and send reports to the General Department of Taxation prior to 31/12/2011. Every year, if there is any adjustment on tax calculating bases leading change of agricultural land use tax amount exempted or reduced of the provinces, cities, the Tax Departments of provinces and centrally-run cities synthesize and make additional report to the General Department of Taxation before 31/12 of the year.

3. Competence to decide on reduction or exemption of agricultural land use tax

• The tax agency determines and makes decision on reduction or exemption of agricultural land use tax

• Director of Department of tax decides on reduction or exemption for taxpayers which taxes are managed directly by the Department of tax.

• Head of the Branch of Tax decides on reduction or exemption for taxpayers which taxes are managed directly by the Branch of Tax.

More details can be found in Circular 120/2011/TT-BTC, which comes into force from October 1, 2011.

Thuy Tram

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