What are bases for land use levy calculation in Vietnam?

Land use levy payers in Vietnam

Pursuant to the provisions in Article 2 of Decree 45/2014/ND-CP, the land use levy payers include:

(1) 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 refereed 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.

(2) 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.

(3) 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 1, 2014, shall, upon grant of certificates of land use rights and ownership of houses and other land-attached assets (below refereed to as certificates), fulfill financial obligations under Articles 6, 7, 8 and 9 of Decree 45/2014/ND-CP.

What are bases for land use levy calculation in Vietnam? (Internet image)

Bases for land use levy calculation in Vietnam

Pursuant to the provisions of Article 3 of Decree 45/2014/ND-CP and Clause 1, Article 2 of Decree 123/2017/ND-CP, land users that are allocated land, have land use purpose changed or have land use rights recognized by the State shall pay land use levy in accordance with the Land Law based on the following grounds:

(1) Area of land which is allocated or of which the use purpose is changed or use rights are recognized.

(2) Land use purpose.

(3) Land price used for land use levy calculation:

- The land price on the Land Price Table prescribed by the People’s Committee of the province or centrally run city (below refereed to as the provincial-level People’s Committee) is applicable in case households or individuals have land use rights recognized or have land use purpose changed for within-quota areas of residential land.

The determination of within-quota areas of land under this Point must adhere to the principle that for every household (even households separated under law) or individual, the area of land within the allocation quota or recognition quota for residential land shall be determined only once and within the same province or centrally run city.

For a household or an individual that has more than one land parcel within the same province or centrally run city, the areas of its/his/her land parcels shall be aggregated for determining the area of land within the allocation quota or recognition quota for residential land, provided that the total of the selected land areas must not exceed the allocation quota or recognition quota of residential land in the locality where the land areas are selected.

Households and individuals shall take responsibility before law for the truthfulness and accuracy of the declaration of the area of land parcels within the allocation quota or recognition quota for residential land subject to land use levy; if they are detected to make, untruthful declaration, households and individuals shall have land use levy retrospectively collected in accordance with the land law and shall be sanctioned in accordance with the tax law.

- The specific land price determined by the method of direct comparison, deduction, income or surplus prescribed in the Government’s Decree on land prices shall be applied in the following cases:

= Determining land use levy in case the land use levy-liable area of the land parcel or land lot is valued (calculated at the land price in the Land Price Table) at VND 30 billion or more, for centrally run cities; VND 10 billion or more, for mountainous and highland provinces; or VND 20 billion or more, for other provinces, in the following cases:

Organizations are allocated land not through auction of land use rights or have land use purpose changed or land use rights recognized; households and individuals are allocated land not through auction of land use rights, have land use rights recognized or have land use purpose changed for the over-quota area of residential land.

= Determining the reserve price for auction of land use rights when the State allocates land with land use levy through auction of land use rights.

- The specific land price determined by the method of land price adjustment coefficient shall be applied in case the land use levy-liable area of the land parcel or land lot is valued (calculated at the land price in the Land Price Table) at under VND 30 billion, for centrally run cities; under VND 10 billion, for mountainous and highland provinces; or under VND 20 billion, for other provinces, for determining land use levy in the following cases:

= Organizations are allocated land by the State with land use levy not through auction of land use rights or have land use rights recognized or land use purpose changed;

= Households and individuals are allocated land by the State not through auction of land use rights;

= Households and individuals have land use rights recognized or land use purpose changed by the State for the over-quota area of residential land.

Annually, provincial-level People’s Committees shall provide the land price adjustment coefficient for application in the cases specified at this Point.

- 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. The time for conducting surveys to develop coefficients k shall be from October 01 every year.

Costs related to coefficient k development (including costs of hiring consulting service providers if necessary) shall be funded by state budget under regulations of law on state budget. Selection of consulting service providers responsible for conducting surveys and developing coefficients k shall comply with regulations of law on bidding.

In the cases where the People’s Committee of province has not issued coefficient k from the date of determining land levy, coefficient k issued in the previous year shall be applied and such People’s Committee may take responsibility for loss of budget due to failure to issue coefficient k on schedule (if any).

Mai Thanh Loi

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