Vietnam: Exemption or reduction of land use levy or land rental in economic zones

Circular No. 89/2017/TT-BTC of the Ministry of Finance of Vietnam specifies the principles of exemption and reduction of land rental and water surface rental, according to which an investment project using land shall be eligible for consideration for exemption or reduction of land rental and/or water surface rental if it is established, appraised and approved in accordance with law.

An investment project shall have land rental or water surface rental exempted or reduced in cases the lease of land is approved by a competent authority for the first time for implementing the project or have the land lease period extended in accordance with the land law.

An organization or individual that is leased land or water surface by the management board of the economic zone may enjoy exemption or reduction of rental only after completing procedures for requesting rental exemption or reduction. To be specific:

If a lessee of land or water surface is eligible for exemption or reduction of rental but fails to carry out procedures for requesting rental exemption or reduction, it/he/she must pay the land rental or water surface rental in accordance with law. If the procedures for requesting land rental exemption or reduction are carried out late, no land rental or water surface rental shall be exempted or reduced for the late period.

If an application for rental exemption or reduction is submitted when the prescribed incentive period ends as regulated in Decree No. 35/2017/ND-CP, no land rental or water surface rental shall be exempted or reduced. If it is submitted while rental exemption and reduction incentives still remain valid, land rental or water surface rental shall be only exempted or reduced for the remaining incentive period as from the receipt of a valid application.

Exemption and reduction of land use levies in economic zones shall be given in accordance with regulations in Article 7 of Decree No. 35/2017/ND-CP; the exempted or reduced amount of land use levy shall be determined by the management board of the economic zone in accordance with the Government's regulations on collection of land use levies, and specified in decision on exemption or reduction of land use levy which is issued using the template stated in Circular No. 76/2014/TT-BTC.

With regard to exemption from land rental during capital construction period, Circular No. 89/2017/TT-BTC specifies that based on the application for exemption or reduction of land rental submitted by the land lessee in accordance with regulations, the management board of the economic zone shall cooperate with relevant agencies (where necessary) to determine the capital construction period and issue decision on land rental exemption to each investment project provided that the exemption period shall not exceed 03 years from the issued date of the land lease decision.

If the land lessee fails to submit an application for land rental exemption during the capital construction period, land rental shall be exempted in accordance with the law on investment from the issued date of the land lease decision. If the lessee submits an application for land rental exemption later than the prescribed deadline under the law on investment, land rental shall be exempted for the remaining incentive period (if any) from the receipt of a valid application for land rental exemption by the management board of the economic zone and shall not be exempted for the late period.

Exemption or reduction of land rental or water surface rental during the capital construction period shall be given to each investment project associated with new land lease or change from land allocation without collection of land use levy into land lease, excluding investment projects to upgrade or expand production and business establishments.

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

Source: cantho.gov.vn

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