Decree No. 123/2017/ND-CP of Vietnam’s Government amends certain articles of Decree No. 45/2014/ND-CP and Decree No. 46/2014/ND-CP on collection of land levy, land rent and water surface rent with notable contents as follows:
Article table of contents
New land price adjustment coefficients apply from January 01 every year
According to Vietnam’s regulations, land price adjustment coefficients (coefficient k) issued by People's Committees of provinces/central-affiliated cities (hereinafter referred to as "People's Committees of provinces") shall apply from January 01 every year.
In the cases where the People’s Committee of the province has not issued coefficient k from the date of determining land levy, coefficient k issued in the previous year shall be applied. In these cases, such People’s Committee may take responsibility for loss of budget due to failure to issue coefficient k on schedule (if any).
Supplementing the case of collection of land levy when transferring non-agricultural production/business land to residential land
Decree No. 123/2017/ND-CP of Vietnam’s Government supplements that:
If non-agricultural production/business land (non-residential land) having long-term duration of use allocated by the State with collection of land levy before July 01, 2004 is repurposed as residential land to execute an investment project from July 01, 2014 onwards, the land levy shall be paid equivalent to the land levy calculated according to residential land price minus (-) the land levy calculated according to land price with lump-sum payment for the whole land lease term for non-agricultural production/business land (commercial, services) within 70 years when the competent state authority allows land repurposing.
Land levy shall be deducted when there is documentary evidence of payment
Article 9 of Decree No. 45/2014/ND-CP of Vietnam’s Government is amended as follows:
- The household or individual using land (land user) violating regulations of law on land stated in Article 22 of Decree No. 43/2014/ND-CP of Vietnam’s Government or land allocated or leased ultra vires from July 01, 2004 to before July 01, 2014 which now complies with land-use planning shall, upon grant of a certificate by a competent state authority in accordance with the provision of Clause 9 Article 210 of the Land Law of Vietnam, pay 100% of land levy based on the land price specified in Point b or c Clause 3 Article 3 of Decree No. 45/2014/ND-CP when a decision on recognition of land use rights made by the competent state authority is given.
- If documents proving the payment for land use are available, the amount of money paid by the land user shall be deducted from the payable land levy provided that the deduction does not exceed the payable land levy.
- The user of land with non-residential construction work shall, upon grant of the certificate of the rights to use non-agricultural production/business land as land allocated with land levy collected for a long term, pay 100% of land levy calculated based on the land price specified in Point b or c Clause 3 Article 3 of Decree No. 45/2014/ND-CP for the non-agricultural production/business land with the longest use term as prescribed in Clause 3 Article 126 of the Land Law when the decision on recognition of land use rights made by the competent state authority is given.
Supplementing 02 principles of land use levy exemption or reduction
Specifically, the business entity having non-agricultural production/business land levied and allocated by the State and making payment for land levy and having land levy remitted by the competent state authority in accordance with regulations of law on land before July 01, 2014 when transferring the project or land use rights from July 01, 2014 onwards:
- Transfer of the investment project together with transfer of land use rights:
+ In the cases where the remitted land levy is not included in the transfer price and the transferee continues to execute the project, the transferee shall be entitled to receive remission of land levy in compliance with regulations of law on investment for the remaining period of the project.
+ The transferee failing to continue executing the project shall pay land levy for the project after the transfer. If the transferor has made part of payment for land, the transferee shall inherit such payment.
- In case of land use right transfer, the transferor shall pay the entire remitted amount to the state budget in line with the land price at the time when the land use right transfer is made.
Application for deduction from the compensation
Decree No. 123/2017/ND-CP supplements contents of the application for deduction from the compensation for the user whose land is allocated by the State not in the form of auction and voluntarily advancing the compensation for ground clearance. An application for deduction from the compensation consists of:
- A copy of the plan for compensation approved by the competent state authority;
- The documentation and declaration of payment for compensation.
Concurrently, supplementing the following provision: In case of the project that the State allocates land in the form of auction with multi-purpose land use: Allocation of levied land or allocation of levy-free or rent-free land and the investor voluntarily advances the compensation under the plan approved by the competent state authority, the deduction of compensation shall be calculated according to each type of area and allocated equally for land area used for public purposes to corresponding land area.
View more details at Decree No. 123/2017/ND-CP of Vietnam’s Government, effective from January 01, 2018.
