Vietnam: No longer supports deductions when paying land use fees before due date

Specifically, according to Article 16 of Decree No. 45/2014/NĐ-CP of Vietnam’s Government:

“Land users may pay owed land use levy in installments within 5 years at most; after this 5-year limit, if failing to fully pay land use levy, land users shall pay the remaining land use levy calculated based on the land price applicable at the time of payment. Households or individuals that pay owed land use levy ahead of schedule are entitled to support in the form of deduction equal to 2% of the land use levy amount paid ahead of schedule for each year of ahead-of-schedule payment.”

This means that the sooner the debtor pays the land use fee, the higher the deduction percentage, up to a maximum of 8% of the total land use fee.

Currently, Article 1 of Decree No. 79/2019/NĐ-CP of Vietnam’s Government amending Article 16 of Decree No. 45/2014/NĐ-CP annulled this provision. Besides, according to transition provisions in Article 2 of Decree No. 79/2019/NĐ-CP: “If households and/or individuals pay debts before the 5-year maturity period from the effective date of this Decree, they shall not be granted 2% of subsidies per year offset against land use fees payable.”

Thus, new regulations completely eliminate the deduction when paying land use fees ahead of time.

“Recently, when applying the deduction, many people have taken advantage of this regulation to owe land use fees and then repay the debt after a short period of time to receive support. With the introduction of Decree 79, removing regulations on deductions will partly overcome the above situation, avoiding loss of state budget resources.” - Comment by Lawyer Nguyen Thuy Han, in charge of LawSoft's Law Industry Community network.

Lan Anh

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