Vietnam: Determination of land use levy and land rental through auction

Leasing land with annual land rental payment:

- The reserve price for auction of the rights to use leased land with annual land rental payment is the annual land rental unit which has been determined by the management board of the economic zone according to the land price in the land price table, the land price adjustment coefficient and specific percentages (%) set by the Provincial-level People's Committee, and approved after reaching agreement with the Provincial-level Finance Department. 

- In case the lease period of the land lot or the land parcel for auction is shorter than the period of the land category of the same land use purpose prescribed in the land price table, the land price for determination of the reserve price for auction of land use rights shall be set by adopting the following formula:

- The winning land rental unit shall be kept unchanged for 10 years. At the end of this period, the management board of the economic zone may adjust land rental units for application to the subsequent period according to the land policy and prices effective at the time of adjustment by multiplying the land price in the land price table and the land price adjustment coefficient and the specific percentage (%) set by the Provincial-level People's Committee. The land rental unit may be adjusted by 30% at most compared to the winning land rental unit or the land rental unit of the previous period.

In case of one-off collection of land use levy or land rental for the entire land lease period, the reserve price for auction of land use rights for lease shall be determined in accordance with regulations in Point b Clause 4 of Decree No. 35/2017/ND-CP of Vietnam’s Government.

The land price adjustment coefficient and the specific percentage (%) for determination of the reserve price for auction of land use rights for lease mentioned in Clause 1 and Clause 2 Article 4 of Circular No. 89/2017/TT-BTC of the Ministry of Finance of Vietnam shall be those announced by the Provincial-level People's Committee for application to calculation of land use levy or land rental in case of land allocation or land lease not through auction.

If the land lot or the land parcel put for auction is located in an urban area, traffic center, or advantaged residential area, the Provincial-level Finance Department shall, together with the management board of the economic zone, base on the reality to request the Provincial-level People's Committee to make decision on increase of land price adjustment coefficients and specific percentages (%) to determine the reserve price for auction.

Circular No. 89/2017/TT-BTC of the Ministry of Finance of Vietnam takes effect from October 06, 2017.

- Nguyen Trinh -

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