Vietnam: The percentages used for land rental calculation in economic zones are between 0.5% and 3%

The Ministry of Finance of Vietnam issued Circular No. 89/2017/TT-BTC guiding certain articles of Decree No. 35/2017/ND-CP prescribing collection of land use levy, land rental and water surface rental in economic zones and hi-tech zones.

According to Circular No. 89/2017/TT-BTC of the Ministry of Finance of Vietnam, the land rental unit shall be determined by multiplying a percentage (%) by the specific land price prescribed in Clause 1 Article 4 of Decree No. 35/2017/ND-CP of Vietnam’s Government, in which the percentages used for land rental calculation are between 0.5% and 3%. The specific land price is determined according to the land price adjustment coefficient method prescribed in the Government’s Decree on land price.

At several land locations used for implementing projects in the same area, if the land use coefficient of a route varies from the average rate applicable to that area or route, the Provincial-level People's Committee shall set the land price adjustment coefficients which may be higher or lower than the average rate for calculating the land use rental in these cases.

Total land rental payable = the land rental unit x the land area subject to land rental. In cases where the land rental is exempted in accordance with regulations in Point a, Point b, Point d Clause 6 Article 8 of Decree No. 35/2017/ND-CP or there are deductions from total land rental payable according to the method of conversion into the period of fulfillment of financial obligation to pay the land rental, the land rental payable shall be determined according to the land policy and price effective at the time of starting payment of land rental.

Regarding of leasing land with one-off land rental payment for the entire lease period, in case the area of the land parcel or the land lot used for land rental calculation is valued at VND 30 billion or higher, the specific land price shall be determined according to the direct comparison, discount, income or surplus method in accordance with the Government’s regulations on land prices.

In case of exemption from land rental as regulated in Point a, Point b, Point d Clause 6 Article 8 of Decree No. 35/2017/ND-CP, the Provincial Department of Natural Resources and Environment shall set specific land prices for calculation of land rental for the period for which land rental is payable.

In case the area of the land parcel or the land lot used for land rental calculation is valued at less than VND 30 billion, the specific land price used for land rental calculation shall be 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 the land lease period.

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.

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

Source: Online Vietnam Financial Times

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