Financial obligations regarding land are obligations that land users must fulfill when using land or when carrying out land-related procedures. So, what types of obligations do these include and how are they implemented?
Article table of contents
Financial obligations are land use levy, land rent, land-related taxes and registration fees determined by the tax authority that land users must pay.
Financial obligations of land users include:
1. Financial obligations regarding registration fees
According to Decree No. 140/2016/NĐ-CP of Vietnam’s Government, factors for calculating a registration fee include the base price and the registration fee rates (%).
In which:
- The base price for land shall be specified in the Land price list promulgated by provincial People's Committees as per the legislation on land in effect upon the declaration of registration fee.
- The base price for housing shall be defined by provincial People's Committees as per the legislation on construction in force upon the declaration of registration fee.
(Registration fee values for some specific cases are specified in Decree No. 140/2016/NĐ-CP)
* Registration fee rate applied to housing and land is 0.5%.
Formula:
Registration fee = Base price x 0.5%
2. Financial obligations regarding land use levy
Land users shall fulfill financial obligations regarding land use levy if they are subject to payment of land use levy as prescribed in Article 2 of Decree No. 45/2014/NĐ-CP of Vietnam’s Government. To be specific:
- Entities allocated land by the State for use in the following cases:
+ Households and individuals that are allocated residential land;
+ Economic organizations that are allocated land for implementing investment projects on construction of houses for sale or for combined sale and lease;
+ Overseas Vietnamese and foreign-invested enterprises that are allocated land for implementing investment projects on construction of houses for sale or for combined sale and lease;
+ Economic organizations that are allocated land for implementing investment projects on infrastructure of cemeteries or graveyards for transfer of the rights to use land with infrastructure (below referred to as land for cemeteries or graveyards);
+ Economic organizations that are allocated land for construction of multi-story buildings for multiple purposes, including the area of houses for sale or for combined sale and lease.
- Current users of land permitted by the State for change of use purpose to residential land or land for cemeteries or graveyards in the following cases:
+ Agricultural land or non-agricultural land is allocated without land use levy and now permitted by a competent state agency for change to residential land or land for cemeteries or graveyards;
+ Agricultural land is allocated by the State with land use levy and changed to residential land or land for cemeteries or graveyards with land use levy;
+ Non-agricultural land (that is not residential land) is allocated by the State with land use levy and changed to residential land with land use levy;
+ Agricultural land or (non-residential) non-agricultural land is leased by the State and now changed to residential land or land for cemeteries or graveyards concurrently with the shift from land lease to land allocation with land use levy.
- Households and individuals that are currently using residential land or non-agricultural land and have such land recognized by the State as land used for a long term before July 01, 2014.
Land use levy shall be calculated based on the following grounds:
- Area of land which is allocated or of which the use purpose is changed or use rights are recognized.
- Land use purpose.
- Land price used for land use levy calculation;
In which, land price used for land use levy calculation shall be determined through:
- The land price on the Land Price Table prescribed by the People’s Committee of the province;
- The specific land price determined by the method of direct comparison, deduction, income or surplus;
- The specific land price determined by the method of land price adjustment coefficient.
(Financial obligations regarding land use levy are specified in Section I, Chapter II of Decree No. 45/2014/NĐ-CP)
3. Financial obligations regarding taxes related to land
Land users are obliged to pay taxes related to land such as:
- Land use tax;
- Income tax from land use rights transfer.
In which,
- Land use tax includes:
+ Agricultural land: specified in the Law on agricultural land use tax No. 1993 23-L/CTN of Vietnam
+ Non-agricultural land: specified in Circular No. 153/2011/TT-BTC of the Ministry of Finance of Vietnam guiding non-agricultural land use tax.
- Income tax from land use rights transfer: specified in the Law on personal income tax 2007 of Vietnam, including 02 cases:
+ Resident: specified in Article 14 of the Law on personal income tax 2007 of Vietnam;
+ Non-resident: specified in Article 29 of the Law on personal income tax 2007 of Vietnam.
Above are the 3 most important and most common financial obligations in reality. Customers and members can see more about the calculation for each type of tax in the documents attached to the article.
Thuy Tram
