What are the cases of reduction in land rent and water surface rent in Vietnam?

What are the cases of reduction in land rent and water surface rent in Vietnam? (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of reduction in land rent and water surface rent in Vietnam

According to Clause 1, Article 20 of Decree 46/2014/ND-CP, the land rents and water surface rents shall be reduced in these following cases:

- A land rent for the land leased by a cooperative to be used as business and production premises shall be reduced by 50%.

- A rent for the land or water surface leased to serve the purposes of agricultural production, forestry, aquaculture and salt making shall be reduced by a corresponding rate if less than 40% of its yield is damaged by disaster or conflagration; exempted if 40% or more of its yield is damaged in such year.

- A rent for the land or water surface leased to serve the purposes of production and business other than the agricultural production, forestry, aquaculture and salt making or the case prescribed in the Clause 2 Article 20 of Decree 46/2014/ND-CP shall be reduced by 50% during the pause in production and business in case of disaster, conflagration or force majeure.

2. Rules for exempting, reducing land rent and water surface rent in Vietnam

Rules for exempting, reducing land rent and water surface rent in Vietnam include:

- Exemption, reduction of land and water surface rents shall be done according to each investment project attached with new land lease except following cases:

+ State farms allocated with land without land levy eligible for exemption, reduction of land rent according to the areas, administrative divisions of investment incentives according to the Law on Investment when switching to the form of land lease according to the Law on Land.

+ Public service organizations allocated with land without land levy eligible for exemption of land rent with regard to the land for construction of public service works as prescribed in the Law on Land when switching to the form of land lease.

+ Organizations, individuals that have been issued Decision on allocation of land without land levy, Decision on land lease, or Contract for land lease according to laws before July 01, 2014 and have to lease the land in its quo status and are eligible for exemption, reduction of land rent as prescribed in Points d, dd, e, g, h, I, k, Clause 1, Article 19, Clause 1, Article 20 of Decree 46/2014/ND-CP.

+ Organizations and/or individuals as land lessees who are eligible for exemption, reduction of land rent according to the Government, Prime Minister’s regulations.

- Any land renter or water surface renter eligible for both rent exemption and reduction shall be exempted from the land rent or water surface rent. After that his rent shall be reduced in the remaining lease term under the regulations (if any). In case the renter is eligible for various level of reduction, the highest level shall apply.

- Exemption, reduction of land, water surface rents as prescribed in Articles 19, 20 of Decree 46/2014/ND-CP shall be applicable to those who are eligible for the lease of land from the state and calculated on the land, water surface rents to be paid, unless otherwise as regulated in Point b, Clause 1, Article 19 of Decree 46/2014/ND-CP.

- Any active project whose exemption or reduction in land rent and water surface rent is higher than the exemption and reduction prescribed in this Decree shall receive such incentives in the remaining time. If the exemption or reduction is less than the prescribed ones, the prescribed incentives shall apply in the remaining time from the effective date of Decree 46/2014/ND-CP.

- The exemption and reduction in land rent or water surface rent shall not apply to projects on natural resource and mineral extraction

- The land rent and water surface rent of the renters shall be exempted or reduced after they complete the procedures for the exemption and reduction under the regulations.

- Where a competent state authority detects the land user whose land rent is remitted but failing to fulfill requirements for remission of land rent stated in the decision or agreement on land lease and not having land appropriated in accordance with regulations of law on land or having land appropriated in compliance with the provision of Point 1 Clause 1 Article 64 of the Land Law, the land user shall reimburse the remitted land rent to state budget as follows:

+ The remitted land rent reimbursed shall be determined according to land prices on the land price list, coefficient k and rate (%) for calculating the land rent/m2 provided by the People’s Committee of province at the time when the decision on remission of land rent is given and plus the amount of late payment over the reimbursed amount in conformity with regulations of law on management of tax in each period. The land user shall not reimburse the remitted amount in the area having investment incentives.

+ The amount of late payment specify in Point a shall be calculated from the date when the tax authority gives the decision on remission of land rent to the date when the competent state authority appropriate the remitted land rent.

+ The Department of Taxation of province shall request the People’s Committee thereof to appropriate the remitted land rent if the land user is an overseas entity or foreign-invested enterprise.

+ The Department of Taxation of district shall request the People’s Committee thereof to appropriate the remitted land rent if the land user is a household or individual.

+ The tax authority shall make decisions on remission of land rent.

- If an entity leasing land from the State pays a lump sum for the entire lease term and enjoys the land rent exemption but wishes to pay the land rent during the lease term, (s)he shall fulfill the financial obligations and has the rights and obligations of land similar to the entities paying the land rent.

- Land rent reduction is not applied in the case of auction of land use rights for lease.

- Where a land user leases land from the State with lump-sum payment and receives exemption from the entire land rent but wishes to pay for land rent (without incentives) during the land lease term, the payable land rent paid in lump sum for the remaining land lease term shall be determined according to policies and land prices at the time when the land user makes a request for land rent payment. The land user shall have the rights to land corresponding to the remaining land lease term when the land rent is not exempted.

- If the land lessee not subject to remission of land rent or subject thereto but the remission expires when a competent state authority allows land repurposing for the execution of the project subject to remission of land rent but the lease term of land after repurposing from at least 50 years from the date when the decision on land repurposing is given onwards shall have land rent remitted.

(Article 18 of Decree 46/2014/ND-CP, as amended in Decree 135/2016/ND-CP and Decree 123/2017/ND-CP)

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