Cases of exemption from non-agricultural land use tax in Vietnam

Cases of exemption from non-agricultural land use tax in Vietnam (Internet image)

Cases of exemption from non-agricultural land use tax in Vietnam

Pursuant to the provisions of Article 10 of Circular 153/2011/TT-BTC and Article 4 of Circular 130/2016/TT-BTC, the cases of exemption from non-agricultural land use tax in Vietnam include:

(1) 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; and 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 as specified in the Ministry of Labor, War Invalids and Social Affairs' Circular 40/2009/TT-BLDTBXH and its amending documents.

(2) 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 Enterprises Law 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.

(3) 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.

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

(5) 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; and disadvantaged Agent Orange victims.

(6) 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.

(7) 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.

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

(9) 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.

(10) A household or individual shall be exempted from the annual tax on non-agricultural land use if the tax payable, after reduced owing to any tax exemption or deduction as per the Law on taxation of non-agricultural land use and guiding documents, is fifty thousand Vietnam dongs or less. If such household or individual has several land parcels in a province, the exemption of the tax on non-agricultural land use, according to this Article, shall be based on the total tax payable on all land parcels.

A household or individual who has paid the tax on non-agricultural land use to the state budget though being eligible for exemption of such tax as per this Circular, shall receive a refund of the tax from tax authorities according to the Law on tax administration and guiding documents.

Competence to decide on tax exemption and reduction in Vietnam

Pursuant to Article 12 of Circular 153/2011/TT-BTC, managing tax agencies shall base on tax declaration dossiers specified in Article 15 of this Circular to determine non-agricultural land use tax amounts to be exempted or reduced and decide on tax exemption or reduction for taxpayers according to each tax period.

Some specific cases:

- For households and individuals eligible for tax exemption or reduction under Clauses 4, 5 and 6, Article 10, and Clauses 2 and 3, Article 11 of Circular 153/2011/TT-BTC, directors of district-level Tax Departments shall, based on the list proposed by commune-level People's Committees, issue common decisions on non-agricultural land use tax exemption or reduction.

Annually, commune-level People's Committees shall revise and send a list of entities eligible for tax exemption or reduction to tax agencies for the latter to effect tax exemption or reduction according to their competence.

- For taxpayers eligible for tax exemption or reduction under Clause 9, Article 10, and Clause 4, Article 11 of Circular 153/2011/TT-BTC, heads of their managing tax agencies shall issue tax exemption or reduction decisions on the basis of taxpayers' applications and certification of commune-level People's Committees of localities where exists the damaged land.

- For other cases, taxpayers shall send their dossiers, enclosed with papers proving their eligibility for tax exemption or reduction as required or certification of commune-level People's Committees of localities where exists the taxable land, to their managing tax agencies for settlement.

Mai Thanh Loi

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