Vietnam: Non-agricultural land tax exemption cases

Hi Lawnet, I have a question to ask. What are cases of non-agricultural land tax exemption in Vietnam? - Trong Linh (Ca Mau)

Vietnam: Non-agricultural land tax exemption cases (Source: Internet)

1. Objects subject to non-agricultural land tax

- Residential land in rural and urban areas

- Non-agricultural production and business land, including:

+ Land for construction of industrial parks, including industrial clusters, industrial parks, export-processing zones and other consolidated production and business zones subject to a common land use regime;

+ Land for construction of production and business establishments, including industrial production, cottage industry and handicraft businesses; service and trade establishments and other facilities serving production and business operations (including also land for construction of production and business establishments in hi-tech parks and economic zones);

+ Land for mineral mining and land used as mineral processing sites, except cases in which mineral mining activities do not affect the top soil layer or land surface;

Example 1: Company A is leased land by the State for coal mining. Of the total leased area of 2,000 m2, forest land occupies 1,000 m2, and the remaining land area is used as coal mining and processing sites. If coal mining does not affect the forest land, the forest land area is not liable to tax.

+ Land for production of construction materials or pottery, including land used as raw material and land used as construction material processing and production or pottery-making sites.

- Non-agricultural land specified in Article 2 of Vietnam's Circular 153/2011/TT-BTC, which is used by organizations, households or individuals for commercial purposes.

(Article 1 of Vietnam's Circular 153/2011/TT-BTC)

2. Non-agricultural land tax exemption cases

-  Land of investment projects in the sectors eligible for special investment promotion (special investment incentives);

Investment projects in geographical areas with extreme socio-economic difficulties;

Investment projects in the sectors eligible for investment promotion (investment incentives) in geographical areas with socio-economic difficulties;

Land of enterprises with over 50% of their employees being war invalids or diseased soldiers.

Lists of sectors eligible for investment promotion; sectors eligible for special investment promotion; areas with socio­economic difficulties; and areas with extreme socio-economic difficulties comply with the investment law.

Employees being war invalids and diseased soldiers must be regularly employed in the year

- Land of establishments carrying out socialized activities in education, vocational training, health, culture, sports and environmental protection. These establishments include:

+ Non-public establishments set up and qualified for carrying out socialized activities under regulations of competent state agencies;

+ Organizations and individuals operating under the Law on Enterprises that have investment projects, joint-venture or associated activities or establish establishments qualified for carrying out socialized activities under regulations of competent state agencies;

+ Public non-business establishments that contribute capital to, or raise capital for jointly setting up independent cost-accounting units or enterprises carrying out socialized activities under decisions of competent slate agencies;

+ Tax exemption for foreign-investment projects carrying out socialized activities shall be decided by the Prime Minister at the proposal of the Ministry of Planning and Investment and relevant line ministries.

Establishments carrying out socialized education, vocational training, healthcare, cultural, sports and environmental activities must satisfy the requirements on operation scope and standards under the Prime Minister's decisions.

- Land for construction of gratitude houses, great-unity houses and nursing homes for lonely elderly people, people with disabilities or orphans, and social disease- treatment establishments.

- Within-quota residential land in geographical areas with extreme socio-economic difficulties.

- Within quota residential land of persons engaged in

+ Revolutionary activities before August 19, 1945; war invalids of 1/4 or 2/4 grade;

+ Persons entitled to policies like war invalids of 1/4 or 2/4 grade;

+ Diseased soldiers of grade 1/3;

+ Heroes of people's armed forces;

+ Heroic Vietnamese mothers;

+ Natural parents and nurturing persons of martyrs during their childhood; spouses of martyrs;

+ Martyrs' children eligible for monthly allowances;

+ Agent Orange victims who are revolutionary activists;

+ Disadvantaged Agent Orange victims.

- Within-quota residential land of poor households identified under the Prime Minister's decision on poverty line.

In case provincial-level People's Committees have specified a poverty line applicable in their localities according to law, poor households shall be identified under the poverty line promulgated by provincial-level People's Committees.

- Households and individuals whose residential land is recovered by the State in a year under approved master plans or plans will be exempt from tax on recovered land and the land in the new place of residence in that year.

- Land with garden houses certified by a competent state agency as historical-cultural relics.

- Taxpayers facing difficulties due to force majeure circumstances, if the value of damage related to land and houses on land accounts for over 50% of the taxable price.

In this cases, certification of commune-level People's Committees of the localities where exists such land is required.

- Non-agricultural land use tax exemption for households and individuals whose non-agricultural land use tax must be paid annually (after deducting the exempted or reduced tax amount (if any) in accordance with the Tax Law on non-agricultural land use and guiding documents) of fifty thousand VND or less.

In cases where households and individuals have many land plots within a province or centrally run city, the exemption from non-agricultural land use tax as prescribed in Article 10 of Circular 153/2011/TT-BTC shall be calculated on the total tax payable of all land parcels.

The order and procedures for non-agricultural land use tax exemption outlined in this article shall comply with the guidance in Circular 153/2011/TT-BTC.

For households and individuals that are eligible for exemption from non-agricultural land use tax as guided in this circular but have already paid tax into the state budget, the tax authority shall refund the tax according to the provisions of the Law on Tax Administration and other guiding documents.

(Article 10 of Vietnam's Circular 153/2011/TT-BTC)

Ngoc Nhi


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