Latest principles of land use levy exemption or reduction in Vietnam

Latest principles of land use levy exemption or reduction in Vietnam (Internet image)

In this regard, Lawnet would like to answer as follows:

1. Principles of land use levy exemption or reduction in Vietnam

Principles of land use levy exemption or reduction in Vietnam under Article 10 of Decree 45/2014/ND-CP (amended in Decree 135/2016/ND-CP and Decree 123/2017/ND-CP) as follows:

- Households and individuals that are eligible for land use levy exemption or reduction may enjoy the exemption or reduction only once in the following cases: They are allocated land by the State for use as residential land or permitted for change from other land to residential land or granted residential land use right certificates.

- In case many members of a household are eligible for land use levy reduction, the reduction level of each member shall be added up into the aggregated reduction level of the entire household, but the maximum reduction level must not exceed the payable land use levy within the allocation quota for residential land.

- A person who is eligible for both exemption from and reduction of land use levy under Decree 45/2014/ND-CP or other relevant legal documents may enjoy the land use levy exemption; a person who is eligible for land use levy reduction at different levels under this Decree and other relevant legal documents may enjoy the highest reduction level.

- The land use levy exemption or reduction upon land allocation or permission for change of land use purpose by the State under Articles 11 and 12 of Decree 45/2014/ND-CP only apply directly to eligible entities and shall be calculated based on payable land use levy as prescribed in Articles 4 thru 9 of Decree 45/2014/ND-CP.

- Land use levy exemption or reduction under regulations on investment incentives is not applicable to investment projects on construction of commercial houses.

- Land users may enjoy land use levy exemption or reduction only after they have completed procedures for such exemption or reduction under regulations.

- Economic organizations that are allocated land by the State with land use levy and are eligible for land use levy reduction have the rights and obligations within the value of the rights to use land for which they have paid land use levy under the land law.

- Land users that are eligible for land use levy exemption or reduction but wish to pay land use levy (without incentives) shall fulfill land-related financial obligations like those ineligible for land use levy exemption or reduction and have the rights and obligations prescribed in the land law like those allocated land by the State with land use levy for the type of land with similar use purpose.

- No exemption, reduction of land levy shall be applicable to winners of land use right auction even though they are eligible for exemption or reduction of land levy. Exemption and reduction of land levy for subjects under housing improvement policies shall be based on relevant policies and shall not be applicable in case of land use right auction.

- 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 the remitted amount to state budget in line with the land price at the time when the land use right transfer is made.

2. Cases of land use levy exemption

According to Article 11 of Decree 45/2014/ND-CP, land use levy shall be exempted in the following cases:

- Land use levy shall be exempted for the land area within the allocation quota for residential land which is used for implementation of housing policies, residential land for people with meritorious services to the revolution who are eligible for land use levy exemption under regulations on people with meritorious services; poor households and ethnic minority households in areas with extremely difficult socio-economic conditions or in border areas or on islands; or land used for construction of social houses under the housing law; or houses for people who have to relocate due to natural disasters.

Poor households shall be identified under the Prime Minister’s decision while ethnic minority households or individuals shall be identified under the Government’s regulations.

- Land use levy shall be exempted for the land area within the allocation quota for residential land upon first-time grant of certificates for land changed from non-residential land to residential land as a result of separation of households for ethnic minority households or poor households in communes with extremely difficult socio-economic conditions in ethnic minority and mountainous areas on the Prime Minister-prescribed list of communes with extremely difficult socio-economic conditions.

- Land use levy shall be exempted for the land area allocated within the allocation quota for residential land for fishing households or people living in river or lagoon areas that move to resettlement areas under approved master plans, plans or projects.

- Land use levy shall be exempted for the land area allocated within the allocation quota for residential land for resettlement or allocated to households and individuals in flooded residential clusters and lines under approved projects.

- The Prime Minister shall decide on land use levy exemption in other cases submitted by the Minister of Finance at the proposal of ministers, heads of ministerial-level agencies or government-attached agencies or chairpersons of provincial-level People’s Committees.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE