Exemption from land rental with land for construction of non-business works in Vietnam

Exemption from land rental with land for construction of non-business works in Vietnam (Internet image)

On August 31, 2022, the General Department of Taxation issued Official Dispatch 3246/TCT-CS on responses to issue regarding the land rental policy.

1. What is land for construction of non-business works?

According to Appendix 1 issued together with Circular 27/2018/TT-BTNMT, land for construction of non-business works means land for construction of public and non-public non-business works in economic, cultural, social, health, education and training, sports, science and technology, environment, diplomacy sectors and fields, and other career works.

2. Types of land for construction of non-business works in Vietnam
 
According to Appendix 1 issued together with Circular 27/2018/TT-BTNMT, land for construction of non-business works in Vietnam includes:

- Land for construction of the head office of a non-business organization is the land for construction of the headquarters or representative offices of non-business units affiliated with state agencies, political organizations, socio-political organizations, political - social - professional organizations;

Headquarters of social organizations and socio-professional organizations (except for cultural, medical, educational, and training establishments, physical training and sports, science and technology, and social services).

- Land for the construction of cultural facilities is land used for the purpose of constructing cultural works, including: Squares, monuments, memorials, cultural centers, children's palaces, or children's houses or youth activity center, labor culture palace, labor culture house, village cultural house, village club,

Museums, galleries, libraries, literary establishments, art establishments, art galleries, headquarters of art troupes, sellers of books, newspapers, and cultural products, cinemas, circuses, theaters, and other cultural works.

- Land for the construction of social service establishments means land used for the construction of social service works, including: nursing homes for the elderly and children in difficult circumstances; wedding ceremony service establishments; and other social service establishments permitted by the State to operate.

- Land for medical facilities is land used for the construction of medical works, including: hospitals, maternity houses, medical centers, medical stations, and other medical examination and treatment establishments; rehabilitation facilities; nursing homes; drug addiction treatment establishments, treatment facilities for people infected with HIV/AIDS; and other medical facilities permitted by the State to operate;

Including the area for offices, businesses, and services such as selling drugs, restaurants, motels for patients' family members, and parking lots within the scope of medical facilities (except for medical facilities managed by the Ministry of National Defense and the Ministry of Public Security).

- Land for the construction of educational and training institutions is land used for the purpose of building educational and training facilities, including kindergartens, general schools, professional high schools, colleges, universities, academies, vocational training institutions, and other educational and training institutions;

Including the area for offices, dormitories for students, selling school supplies, restaurants, parking lots, and other functional areas within the scope of educational and training institutions (except for educational and training institutions managed by the Ministry of National Defense and the Ministry of Public Security).

- Land for the construction of physical training and sports facilities is land used for the construction of physical training and sports facilities, including: sports complexes, sports centers, stadiums, golf courses, swimming pools, and other facilities for exercise, training, and competition;

Including office space, places to sell tickets, sell souvenirs, sell sports equipment, hotels, motels, restaurants, parking lots, and other functional areas within the scope of physical training and sports facilities (except for physical training and sports facilities managed by the Ministry of National Defense and the Ministry of Public Security).

- Land for the construction of science and technology facilities is land used for the construction of scientific and technological research works (except land for the construction of stations, research, and experiment camps on agriculture, forestry, salt production, and fisheries).

- Land for the construction of diplomatic establishments is land used for the purpose of building offices of embassies, consulates, representative offices of foreign diplomatic organizations, non-governmental organizations with diplomatic functions; diplomatic corps establishments managed by the State.

- Land for the construction of other non-business works is land used for the construction of works on environmental treatment, biodiversity conservation, animal and plant quarantine, meteorology, hydrology, registration, and other career projects.

3. General Department of Taxation responses to issue regarding land rental for construction of non-business works in Vietnam

Reply to Official Dispatch 435/CT-HKDCN dated January 13, 2022, of the Tax Department of Ba Ria-Vung Tau Province on land rental exemption for construction of non-business works. In this regard, the General Department of Taxation has the following comments:

- In Clause 2, Article 147 of the Land Law 2013 stipulates:

  Land for construction of non-business works includes land for construction of non-business works in economic, cultural, social, health, education and training, physical training, sports, science and technology, the environment, diplomacy sectors and fields and other career fields.

- At Point dd, Clause 1, Article 19 of Decree 46/2014/ND-CP provides for the exemption of land rental and water surface rent for the entire lease term in the case of land for the construction of non-business works of public non-business organizations.

- Clause 5, Article 3 of Decree 135/2016/ND-CP stipulates that land rental and water surface rent exemption or reduction shall be made according to each investment project associated with the new land lease, except for the following cases:

Organizations and individuals that have had land allocation decisions without a land rental, land lease decisions, or land lease contracts as prescribed by law before July 1, 2014, must now lease land:

Continue to use the land in its original form and be eligible for land rental exemption or reduction as prescribed at Points d, dd, e, g, h, i, k, Clause 1, Article 19, and Clause 1, Article 20 of Decree 46/2014/ND-CP.

Pursuant to the above provisions, land for the construction of non-business works of public non-business organizations converted from land allocation without land rental to land lease shall be considered for exemption from land rental according to regulations.

The Department of Taxation is requested to comply with the provisions of the law based on the specific dossiers of the Ba Ria - Vung Tau Vocational School of Transport and the certification of the competent authorities.

Official Dispatch 3246/TCT-CS was issued on August 31, 2022.

Quoc Dat

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