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THE
GOVERNMENT
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No:
114-CP
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Hanoi,
September 05, 1994
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DECREE
DETAILING THE IMPLEMENTATION OF THE LAW ON THE TAX ON THE
TRANSFER OF THE LAND USE RIGHT
THE GOVERNMENT
Pursuant to the Law on
Organization of the Government on the 9th of September, 1992;
Pursuant to the Law on the Tax on the Transfer of the Land Use Right on the
22nd of June, 1994, and Resolution No. 215-NQ/UBTVQH9 on the 28th of July, 1994
of the Standing Committee of the National Assembly providing for the bracket
for the tax on the transfer of the land use right in the change of the purpose
of this use, from agricultural land to non-agricultural land.
At the proposal of the Minister of Finance,
DECREES:
Chapter I
TAX PAYERS AND TAXABLE
OBJECTS
Article 1.-
Tax payers:
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In the transfer of land
involving a disparity of the value, the receiver of the larger value shall have
to pay the tax on the transfer of the land use right.
In case the organization,
household or individual having the right to land use offers the land as
mortgage for capital loans, but who cannot pay the debt when it is due, and the
State authorized agency decides to transfer its land use right to another
person in order to retrieve the capital for the creditor, the concerned
organization, household or individual must pay the tax on the transfer of land
use right. The authorized State agency, which decides the transfer of the land
use right, must deduct fully the tax on the transfer of land use right, and
remit it to the State budget before paying the expenditures and the debts to
the creditors.
Article 2.-
Cases not liable to tax on the transfer of land use right:
1. The authorized State agency
stipulated in Article 23 and Article 24 of the Land Law which allots land to
the organization, household or individual for use under the provisions of law,
including the sale of house under State ownership, together with the transfer
of the right to use the land on which a house has been built;
2. The State recovers wholly or
part of the land currently used by the organization, household or individual in
cases stipulated in Article 26 and Article 27 of the Land Law;
3. The transfer of the land use
right to the inheritor, as provided for by the law on inheritance defined in
Article 76 of the Land Law, such as the following cases:
- The individuals, and to whom
the State has allotted agricultural land for the planting of annual trees or
raise aquatic products; after their death, their right to use land shall be
legated to their inheritors as prescribed by the law on inheritance;
- The individuals and members of
households who are allotted agricultural land by the State to plan perennial
trees, or forest land for afforestation, or residential land; after their
death, their right to land use shall be legated to their inheritors as
prescribed by the law on inheritance;
4. Members of the same family
who are allotted land and who transfer land to one another when a household is
detached from the family; or the spouses transfer the land use right to each
other in case of divorce;
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6. The organizations, households
or individuals that rent land or lease the house on this land to another
organization, household or individual, and that have paid the turnover tax and
profit tax on the total income from the rent of the land or the lease of the
house on this land.
Article 3.-
Taxable objects:
The taxable object of the tax on
the transfer of the land use right is the value of the area of land subject to
the transfer of the land use right as prescribed by law, including the houses
and other constructions on this land.
In case of the sale of a house
together with the transfer of the right to use the land on which a house has
been built, the taxable object is the value of the land subject to the transfer
of the right to use, not including the value of the house subject to the
transfer of the ownership.
In case of the exchange of land
with a disparity in the value of land, the taxable object is the disparity in
the value of land.
Chapter II
BASES FOR TAX
CALCULATION
Article 4.-
Bases for tax calculation:
The bases for calculating the
tax on the transfer of the land use right are the land area, the price of the
taxable land and the tax rate.
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The area of land subject to tax
on the transfer of the land use right is the actual area of land to be
transferred by an organization, household or individual to another
organization, household or individual, in conformity with the administrative
land map and the land register of the People's Committee of the commune, ward
or township where the land is located. Where there is yet no administrative
land map, the taxable land area must be certified by the land administrative
agency at district level.
Article 6.-
Price of taxable land:
The price of the taxable land,
of which the right of use is transferred, is the price set by the People's
Committee of the province or city directly under the Central Government, within
the price bracket of the Government and in conformity with the practical
conditions in the locality.
The land price table for the
taxable land shall be set by the People's Committee of the province or city
directly under the Central Government, posted up at a public place at the
office of the tax agencies and the managerial agency for houses, land and the
land administration in the locality.
In case of the sale of a flat
belonging to a multi-story building together with the transfer of the right to
use the land on which the house is constructed, the price of the taxable land is
distributed to each story as provided for in Decree No.61-CP on the 5th of
July, 1994 of the Government on the buying, selling of dwelling houses, and
dwelling house business dealing.
In case the transfer of the land
use right takes place along with the change of the purpose of land use from
agricultural to non-agricultural land, the price of the taxable land is the
price of the non-agricultural land.
Article 7.-
Tax rate applied to the transfer of the land use right without changing the
purpose of land use:
The tax rate applied to the
transfer of the land use right represents a percentage (%) of the value of the
transferred land. More concretely:
1. In case the organization,
household and individual that have been granted the right to land use without
having to pay the land use right fee, or having not yet paid the land use right
fee at the time of the land allotment or of the issue of the certificate of
land use right as prescribed by the land law, the following shall apply when
they are allowed to transfer the land use right:
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b/ With regard to residential
land or construction land and other kinds of land, the tax rate is 20% (twenty
percent).
2. In case the organization,
household and individual that have been granted the right to land use and have
paid the fee for land use as provided by the land law, and that now transfer
the right to land use for the second and or more time after having paid the fee
for the first time as stipulated in Item 1 of this Article, the tax rate is 5%
(five percent) if they now transfer the land use right for another time.
The organization, household and
individual that are granted the right to land use in the following cases, are
also considered to have paid the land use fee as prescribed by the land law:
a/ When they are allotted the
land they have paid compensations under Decision No.186-HDBT on the 31st of
May, 1990 of the Council of Ministers (now the Government) concerning the
compensations for the agricultural land and forest land when the land is
changed to another use.
b/ They have paid the land use
fee to the State budget as stipulated in Circular No.60-TC/TCT on the 16th of
July, 1993 of the Ministry of Finance on the buying of houses under State
ownership or not under State ownership, together with the granting of the right
to use the land with the house on it; or that have been allotted land to build
a house and other construction; or that are allotted land in replacement of the
payment of the value of the infrastructure projects.
c/ They have bought houses owned
by the State, houses of the Housing Business Companies of the State as provided
for in Decree 61-CP on the 5th of July, 1994 of the Government on the buying,
selling of houses and housing business.
d/ They have bought the house
while receiving the right to use the land with the house on it and have paid
the income tax under the Ordinance on Income Tax for High Income Earners.
3. In case the exchange of land
involving a disparity in the value due to the difference in area and location
or land category, the tax rate is 5% (five per cent) of the disparity in the
value.
4. In case of assignment of the
land use right, following a transfer on which tax has been paid as stipulated
in Item 3 of this Article:
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b/ If the land use fee has been
paid under the Land Law, the tax rate shall be applied as stipulated in Item 2
of this Article.
Article 8.-
Tax rate applied to cases of transfer of the land use right along with the
change in the purpose of land use.
1. The tax rate on the transfer
of the land use right, in case of the transfer of the use of the land from
agricultural land to non-agricultural land, is defined as follows:
In case of the transfer of the
land use right together with the transfer of the use of land from traditional
rice growing to non-agricultural purposes, the tax rate is 50% (fifty per
cent); and from other agricultural lands to non-agricultural purposes, the tax
rate is 40% (forty per cent).
The traditional rice-growing
land stipulated in this Decree is the rice growing land supplied with adequate
irrigation and drainage facilities, or having a rainfall enough to ensure
stable rice growing.
With regard to the transfer of
agricultural land to land for the construction of industrial projects:
a/ From the traditional
rice-growing land to land for the construction of industrial projects, the tax
rate is 30% (thirty per cent).
b/ From other agricultural lands
to the lands for construction of industrial projects, the tax rate is 20%
(twenty per cent).
c/ The industrial projects must
be built according to plan, and must be ratified by the authorized State agency
according to Article 63 of the 1993 Land Law.
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Chapter
III
DECLARATION OF TAX
RETURNS AND TAX PAYMENT
Article 9.-
Declaration of tax returns:
The organizations, households
and individuals, when filling the procedures asking permission to transfer the land
use right, must also declare to the tax agency where the land is located about
the category of land, its area, location and value, according to the form
issued by the tax agency attached to the permit to change the purpose of land
use (if any). They must also supply the necessary documents related to the tax
calculation at the request of the tax agency.
Article
10.- Time frame for the notification of tax collection:
Upon receipt of the declaration
of tax payment for the transfer of the land use right of the taxable objects,
the tax agency must issue a receipt and open a book to monitor this question.
Within 30 days (thirty days)
after receiving the tax payment declaration on the transfer of the land use
right, the tax agency must notify the tax payer of the tax to be paid, and the
time limit for the tax payment. The tax must be paid within ten days at the
latest after the issue of the tax notice.
Article
11.- Place of tax payment:
The tax on the transfer of the
land use right is paid at the local tax agency where the land concerned is
located.
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Article
12.- Time limit for tax payment:
The tax on the transfer of the
land use right is paid at one time at the date stipulated in the tax payment
notice of the tax agency. When collecting, the tax agency must issue to the tax
payer a tax receipt issued by the Ministry of Finance.
The authorized State agency
shall issue the certificate of land use right to the receiver of the land use
right, when the transferrer of this right has paid fully the tax and produce
the receipt of tax payment issued by the Ministry of Finance.
Chapter IV
TAX EXEMPTION, TAX
RELIEF
Article 13.-
Tax exemption:
1. Tax exemption on the transfer
of the land use right is applied to the households and individuals that
transfer the land use right to move to and settle in new economic zones,
mountainous areas or islands, by decision of the authorized State agency.
The mountainous areas stipulated
in this Item is the commune in the mountainous areas as listed by the Committee
for Nationalities and Mountainous Areas of the Government.
The new economic zones
stipulated in this Item are the areas planned for the settlement of the
population to carry out socio-economic development projects under the plans
already ratified by the authorized State agency.
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3. Tax exemption also applies to
the State officials, workers and employees who move their residence after
accomplishing their tasks in the new economic zones, mountainous areas or
island, or upon their retirement.
Article
14.- Tax relief:
The tax on the transfer of land
use right is reduced by 50% (fifty per cent) in the following cases:
1. The head of the family is an
invalid soldier Categories 1/4 and 2/4, or diseased soldier Categories 1/3 and
2/3;
2. The head of the family is a
close relative of a fallen hero and beneficiary of the State allowance regime.
3. Invalid persons having lost
their working capacity, minors and lonely elderly people.
4. State officials, workers and
employees moving their residence to areas not belonging to new economic zones,
mountainous areas, islands, in case of transfer of work, or upon their
retirement.
Article
15.- Procedures and competence in considering tax exemption or reduction:
Each object stipulated at
Article 13 and 14 of this Decree shall be considered for tax exemption or
reduction, when transferring their land use right on the land allotted by the State
for the first time (based on the certificate of the land use right and the land
register of the People's Committee in the commune, ward or township where the
concerned land is located), together with the criteria required for
consideration for tax exemption or relief.
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The Minister of Finance shall
provide concrete guidance on the procedures and competence in considering
exemption or reduction of the tax on the transfer of the land use right.
Chapter V
FINAL PROVISIONS
Article
16.- Handling of violations:
Any tax agency, tax officer, tax
payer and other individuals, who take acts of violation of the law on the tax
on the transfer of the land use right, shall be sanctioned as stipulated in
Article 17, 18, 19 and 20 of the Law on the Tax on the Transfer of the Land Use
Right, and other provisions of the Government concerning administrative
sanctions in the domain of tax.
Article
17.- Commendations and rewards:
Any tax agency or officer that
accomplishes well the task assigned, and all those who have the merit of
detecting the violations of the Law on the Tax on the Transfer of the Land Use
Right, shall be commended and rewarded according to the common regime of the
Government.
Article
18.- This Decree takes effect as from the 1st of July 1994.
All the earlier provisions which
are contrary to this Decree are now annulled.
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Article
20.- The Ministers, the Heads of the ministerial-level agencies, the Heads
of the agencies attached to the Government, and the Presidents of the People's
Committees in the provinces and cities directly under the Central Government
shall have to organize the implementation of this Decree.
ON
BEHALF OF THE GOVERNMENT
FOR THE PRIME MINISTER
DEPUTY PRIME MINISTER
Phan Van Khai