Thông tư 35/2001/TT-BTC

CIRCULAR No CIRCULAR No. 35/2001/TT-BTC OF MAY 25, 2001 GUIDING THE PAYMENT OF LAND RENT AND CONTRIBUTION OF CAPITAL TO JOINT VENTURES WITH LAND USE RIGHT VALUE BY DOMESTIC ORGANIZATIONS, FAMILY HOUSEHOLDS AND INDIVIDUALS Pursuant to the Land Law and the Law Amending and Supplementing a Number of Articles of the Land Law; Pursuant to the Law on Domestic Investment Promotion; Pursuant to the Government�s Decree No.04/2000/ND-CP of February 11, 2000 detailing the implementation of the Law Amending and Supplementing a Number of Articles of the Land Law; Pursuant to the Government�s Decree No.178/CP of October 28, 1994 on tasks, powers and organizational structure of the Finance Ministry; The Finance Ministry hereby guides the payment of land rent and contribution of capital to joint ventures with the land use right value by domestic organizations, family households and individuals, as follows: Part I PAYMENT OF LAND RENT I. Land rent payers 1. Subjects leased land by the State as defined in Article 9 of the Government�s Decree No.04/2000/ND-CP of February 11, 2000 detailing the implementation of the Law Amending and Supplementing a Number of Articles of the Land Law (hereinafter referred to as Decree No.04/2000/ND-CP), (see Appendix I to this Circular), shall have to pay land rent for the whole leased land area. 2. Economic organizations assigned land for use for agricultural production, forestry, aquaculture or salt making after January 1, 1999. 3. Subjects assigned land without the collection of land use levy as defined in Clause 1, Article 7 of Decree No.04/2000/ND-CP and using part of the assigned land area for production, business and/or service purposes other than the assigned land use purposes (specified in Appendix I to this Circular) shall have to pay land rent for the land area used for production, business and/or service activities. 4. Economic organizations which have been assigned land by the State with the collection of land use levy or transferred with the land use right, and have paid land use levy or transfer charge, which originates from the State budget, shall have to switch to land lease and pay land rent. 5. Organizations and individuals performing the tasks of exploiting minerals and building materials,... shall have to annually pay land rent for the land area where the exploitation is carried out. II. Subjects not liable to land rent 1. Organizations, family households and individuals that are assigned land by the State with the collection of land use levy as defined in Article 8 of Decree No.04/2000/ND-CP (Appendix II to this Circular). 2. Subjects assigned land without the collection of land use levy as defined in Clauses 2 and 3, Article 7 (Appendix II to this Circular) and Clause 1, Article 7 of Decree No.04/2000/ND-CP (except for land area used for production and business purposes mentioned in Clause 3, Section I, Part I of this Circular). 3. Economic organizations which have been transferred with the lawful land use right from other persons or assigned land by the State with the collection of land use levy, which does not originate from the State budget, shall not have to switch to land lease. In cases where the transfer of the right to use agricultural or forestry land is received together with the change of land use purpose permitted by the competent State bodies with money paid for such transfer reception and land use purpose change not originating from the State budget, the land use right transferees shall neither have to switch to land lease nor pay land rent. 4. Organizations currently using land, which was previously residential land lawfully used by family households or individuals, after being permitted by the competent State bodies to use such land area for building offices or workshops for production and/or business activities, must neither switch to land lease nor pay land rent. 5. State organizations which are permitted by the competent State bodies to contribute land use right value as capital to joint ventures with foreign organizations and/or individuals. 6. Organizations and individuals that are permitted to exploit underground minerals shall not have to pay land rent for unused land surface area. III. Determination and payment of land rent 1. Land rent for one year (VND/year) shall be calculated equal to the leased land area (m 2 ) multiplied by the land rent rate per year (VND/m 2 /year). - The land area for calculating land rent is the whole area currently managed and used by an organization, family household or individual for production and/or business activities. Such an area shall be determined under the land lease contract and the written declaration for land rent payment registration. Where the land lease contract is not available yet, the land assignment dossier, the dossier on the hand-over of production and/or business establishment, the land lease dossier or written declaration by the land user shall serve as basis for such determination. Once the land area is officially determined, the calculated figures shall be readjusted according to the reality. - The land rent rate per year is determined as follows: Coefficient for calculating land Price of 1 m 2 of rent rate applicable to each group land prescribed by of business lines or trades prescribed Land rent rate provincial-level People�s in Article 2 of the Regulation on land rent per year = Committee according x rate bracket for domestic organizations (VND/m 2 /year) to the Government�s leased land by the State, promulgated price bracket of land of together with the Finance Minister�s various categories Decision No. 1357/TC/QD/TCT of December 30, 1995 + Land rent rates applicable to investment projects for the construction of infrastructure of industrial parks (IP), export processing zones (EPZ) and hi-tech parks (HTP) shall be equal to 80% of those determined according to the above-said method. + Land rent calculated for the first year and the last year of the land lease term shall be determined according to the number of months during which the land is actually leased. For the land area to be returned to the State, the land rent shall be calculated up to the time of hand-over. In cases where an organization, family household or individual had made a written request for land return, but the State has not yet received the hand-over of land, one month after the record on acceptance of land return is made between the land lessee and the State body competent to lease land, such organization, family household or individual shall not have to pay land rent for such area. 2. Time point for land rent calculation: Time point of land rent calculation is that when the enterprise is handed the land for use. 3. Payment of land rent: - Organizations, family households and individuals that are liable to pay land rent shall have to submit written declarations for land rent payment registration and relevant vouchers to land rent collecting bodies within 1 month after the land rent is calculated. - Land rent (including capital use levy collected in cases where the land use right value is contributed as capital to joint ventures as prescribed in Part II of this Circular) for leased land in a certain geographical area (rural or urban district) shall be paid into the State budget at the State Treasury located in such geographical area (rural or urban district) according to the current State budget index. The payment of land rent shall be made twice a year, with 50% of the land rent calculated for one year being paid each time. The first payment time must not be later than June 30, the second time must not be later than October 30 of the year. - Land rent may be paid annually and accounted into annual production and/or business costs of land lessees. In cases where the land rent is paid in lump sum for many years, it shall be distributed to the number of years for which the land rent is paid and be accounted into the production and/or business costs corresponding to such number of years. 4. Obligations of organizations, family households and individuals when being leased land by the State: 4.1. Organizations, family households and individuals leased land by the State shall have to pay land rent in full and on time to the State Treasury and follow the guidance of the tax offices directly managing the land rent collection. 4.2. Land under use for which the land rent has already been paid according to the provisions of this Circular shall not be subject to agricultural land use tax or house and land tax. 5. Land rent exemption and reduction: Domestic organizations, family households and individuals that are leased land by the State shall be entitled to land rent exemption or reduction in the following cases: 5.1. The land rent shall be exempt during the period of capital construction of the projects. In cases where a project consists of numerous construction items or independent construction stages, the land rent exemption or reduction shall be calculated for each construction item or independent construction stage. In cases where the land rent exemption or reduction cannot be calculated separately according to construction items or independent construction stages, the capital construction period shall be calculated according to the construction item with the largest capital proportion. 5.2. The land rent shall be exempt as from the date the capital construction is completed in order to effect the domestic investment promotion (see Appendix III to this Circular) according to the investment projects� approval by the competent State bodies. 5.3. The land rent shall be exempt for 3 years as from the date the capital construction is completed for enterprises having their factories or plants located in inner quarters of cities or provincial towns when such factories or plants are relocated to the city outskirts or suburban areas under the planning. 5.4. The land rent shall be exempt or reduced for traders conducting trade activities in mountainous regions, islands and/or regions inhabited by ethnic minority people according to the provisions of the Government�s Decree No.20/1998/ND-CP of March 31, 1998 as follows: - Land rent exemption for the first 5 years and 50% reduction for the 5 subsequent years for traders conducting business in region II. - Land rent exemption for the construction or expansion of business establishments for traders conducting business in region III. 5.5. Organizations, family households and individuals renting land and simultaneously being entitled to different land rent exemption or reduction levels provided for in Items 5.2, 5.3 and 5.4 of this Clause 5 or other legal documents, shall only enjoy the highest exemption or reduction level. After the land rent exemption or reduction provided for in Item 5.1, 5.2, 5.3 or 5.4 of this Clause 5 is effected, the organizations, family households and individuals that pay land rent in advance for many years right in the first year shall be entitled to further land rent reduction as follows: If the land rent is paid for 5 years, land rent shall be reduced by 5% for such 5 years. If the land rent is paid for a land lease term of over 5 years, each additional year shall be entitled to 1% reduction more (6% for 6 years paid, 7% for 7 years paid...), but the total reduction level must not exceed 25% of the payable land rent amount for such period. In cases where the land rent is paid for the total land lease term of over thirty (30) years, the 30% reduction of the payable land rent shall be given. 5.6. For hotels, rest houses and guest houses, engaged in seasonal business activities, if they fully pay land rent according to the provisions of this Circular but suffer from losses, they shall be considered for land rent reduction. The reduced land rent must be equal to the loss amount, but the maximum reduction level shall be 50% of the payable land rent amount. 5.7. For leased land used for agricultural production, forestry, aquaculture or salt making purpose but hit by natural calamities or fire, which cause loss to the production output, the land rent exemption or reduction corresponding to the agricultural land use tax exemption or reduction level shall be considered, concretely as follows: + For one year�s output loss of between 10 and under 20%, the land rent shall be reduced correspondingly to the loss level; + For one year�s output loss of between 20 and under 30%, the 60% reduction of the payable land rent shall be given; + For one year�s output loss of between 30 and under 40%, the 80% reduction of the payable land rent shall be given; + For one year�s output loss of 40% or higher, the land rent shall be exempt for one year. The determination of loss level for effecting the land rent exemption or reduction prescribed in this Item shall be made by the method of determining damage level to effect the agricultural land use tax reduction or exemption. 5.8. For leased land used for production and business purposes other than agricultural production, forestry, aquaculture and salt making, when property damage is caused by natural calamities, fire or force majeure events, which is equal to 20% to under 50% of the property value, the 50% reduction of land rent payable in one year shall be given. For property damage level of 50% or higher, the land rent exemption for the whole year shall be given. The damage level shall be calculated equal to the damaged property value on the total existing property value at the time right before the damage is caused. 5.9. The land rent amount to serve as basis for calculating exemption or reduction according to the provisions in Items 5.6, 5.7 and 5.8 is the land rent to be paid after the exemption or reduction amount is subtracted according to the provisions in Items 5.1, 5.2, 5.3 and 5.4 of Clause 5 (if any). 5.10. The land rent exemption or reduction under this Circular shall apply to all projects with land leased by the State before and after the effective date of this Circular. - Projects, being in the stage of capital construction and entitled to land rent reduction according to Circular No.70/TC-QLCS of October 7, 1997, shall now enjoy the land rent exemption according to the provisions in Item 5.1 of this Clause 5 for the remaining capital construction period. - Projects, which have commenced operation from the date of completion of their capital construction up to the effective date of this Circular and are still eligible for land rent exemption or reduction as prescribed in Items 5.2, 5.3 and 5.4 of this Clause 5 to go, shall enjoy land rent exemption or reduction for the remaining land rent exemption or reduction period. 5.11. To enjoy land rent exemption or reduction, organizations, family households and individuals shall have to file applications for land rent exemption or reduction enclosed with necessary papers to tax offices directly managing the land rent collection, each dossier comprises: - An application for land rent exemption or reduction. Particularly for cases of application for reduction or exemption specified in Items 5.7 and 5.8 of this Clause 5, dossiers and papers evidencing production and/or property damage must be enclosed. - The investment license or business registration; - The land lease decision or written declaration for land rent payment registration; - The certificate of investment preferences issued by the competent State body (if any). Part II CONTRIBUTION OF CAPITAL TO JOINT VENTURES WITH LAND USE RIGHT VALUE; HANDLING OF CASES WHERE DEBTS HAVE BEEN ACKNOWLEDGED AND LAND RENTS CONTRIBUTED AS CAPITAL TO JOINT VENTURES HAVE BEEN REFUNDED, WHERE LAND USE LEVY HAS BEEN PAID OR WHERE THE TRANSFER OF LAND USE RIGHT HAS BEEN RECEIVED I. CONTRIBUTION OF CAPITAL WITH LAND USE RIGHT VALUE TO JOINT VENTURES WITH DOMESTIC ORGANIZATIONS AND/OR INDIVIDUALS 1. When the value of the right to use assigned agricultural land and forestry land is contributed as capital to joint ventures for further use for agricultural production, forestry, aquaculture or salt making purpose, the land use right value of the party contributing land as capital to a joint venture shall be agreed upon by the joint venture parties, provided that the land price for determining the land use right value must not be lower than the agricultural land price prescribed by the provincial People�s Committee within the land price bracket promulgated by the Government. The parties contributing land as capital to joint ventures shall have to pay agricultural land use tax as prescribed by law, but not have to pay land rent and State budget capital use levy. 2. Capital contribution in cases of permission for change of use purposes from agricultural land or forestry land to other purposes or capital contribution with leased land, the land use right value contributed as capital to joint ventures shall be determined as equal to the land rent paid into the State budget according to the new use purposes within the joint venture duration. 3. In cases where the land use levy has already been paid according to the provisions of Section IV, Part II for land contributed as capital to joint ventures, the parties contributing land to the joint ventures shall have to pay only the land tax but not the land rent and State budget capital use levy. II. CONTRIBUTION OF CAPITAL WITH LAND USE RIGHT VALUE TO JOINT VENTURES WITH FOREIGN ORGANIZATIONS AND/OR INDIVIDUALS For Vietnamese organizations, which are permitted by the State to contribute land use right value (land rent) as capital to joint ventures or business cooperation contracts with foreign organizations and individuals, the land rent rate shall be agreed upon by the parties but must not be lower than the land, water surface and sea surface rent rates applicable to the forms of foreign investment in Vietnam. The contribution of capital with land use right value is specified as follows: 1. Organizations, which have been assigned land by the State with the collection of land use levy, and organizations, which have been transferred the lawful land use right from other persons with money paid for such transfer having not originated from the State budget or which have used land of family households and/or individuals with lawful land use right and such land is not the land leased by the State, when being permitted to contribute the land use right value to joint ventures, shall not have to pay the levy for the use of the State budget capital for the land use right value contributed to joint ventures, but shall have to annually pay land use tax (land tax) to the State according to the current law provisions. 2. For organizations leased land by the State: 2.1. State enterprises leased land by the State and permitted to contribute land use right value (land rent) to joint ventures with foreign countries, the land rent amount contributed as capital to the joint ventures shall be the capital invested by the State in such enterprises (the Vietnamese parties) and such enterprises shall have to pay the levy for the use of the State budget capital according to the current regulations. The time for calculating and paying the State budget capital use levy shall be counted from the time the land rent is contributed as capital to joint ventures. In cases where they have paid land rent for the whole land lease term, when being permitted by the State to contribute the land use right value to joint ventures within the term for which the land rent has already been paid, they shall not have to pay the levy for the use of the State budget capital for the land use right value contributed as capital to joint ventures. 2.2. Organizations other than State enterprises, which are leased land by the State and have paid land rent for the whole land lease term or for the remaining land lease term of at least 5 years, when being permitted by the State to contribute the land use right value as capital to joint ventures within the term for which the land rent