Circular No. 11/2018/TT-BTC amends and supplements certain provisions of Circular No. 77/2014/TT-BTC guiding certain provisions of Decree No. 46/2014/NĐ-CP dated May 15, 2014 of the Government on land rental fees and water surface rental fees.

CIRCULAR

AMENDMENTS AND SUPPLEMENTS TO CERTAIN ARTICLES OF CIRCULAR NO. 77/2014/TT-BTC DATED JUNE 16, 2014 OF THE MINISTRY OF FINANCE GUIDING CERTAIN PROVISIONS OF DECREE NO. 46/2014/NĐ-CP DATED MAY 15, 2014 OF THE GOVERNMENT ON THE COLLECTION OF LAND RENT AND WATER SURFACE RENT

The Government issues this Decree on management and development of industrial clusters.

Pursuant to Decree No. 46/2014/NĐ-CP dated May 15, 2014 of the Government on the collection of land rent and water surface rent;

Pursuant to Decree No. 135/2016/NĐ-CP dated September 9, 2016 of the Government amending and supplementing certain provisions of decrees on the collection of land use fee, land rent, and water surface rent;

Pursuant to Decree No. 123/2017/NĐ-CP dated November 14, 2017 of the Government amending and supplementing certain provisions of decrees on the collection of land use fee, land rent, and water surface rent;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the State Asset Management Agency,

The Minister of Finance issues this Circular amending and supplementing certain articles of Circular No. 77/2014/TT-BTC dated June 16, 2014 guiding certain provisions of Decree No. 46/2014/NĐ-CP dated May 15, 2014 of the Government on the collection of land rent and water surface rent.

Article 1. Supplement Clause 6a, 10a as follows:

"6a. In cases where the State leases land to entities using houses and land at construction projects with mixed purposes that belong to state ownership or have areas under state management and cannot be separated into individual areas for each user, the land rent payable shall be allocated to each user according to a distribution coefficient (x) multiplied by the floor area used by each user, applicable from July 1, 2014. Specifically:

a) The distribution coefficient is determined as the ratio between the area subject to land rent calculation and the total floor area used by all users.

b) If the building has a basement, 50% of the basement area will be added to the total floor area of the construction project to calculate the distribution coefficient.

If the basement area is determined to be jointly owned by all users of the construction project, the basement area will be evenly distributed among all users.

If the basement area is determined to be owned by the entity required to pay land rent, the basement area will be included in the calculation of land rent for that entity.

10a. When the land use period is extended and the land user is required to pay land rent, the land rent shall be determined based on the policy and land price at the time of extension.

For annual land rental payments, the stable unit price for land rent shall be calculated from the date the competent authority issues the decision to extend the land lease period.

If the land lease period expires but the competent authority has not issued a decision to extend the lease period, the land user must pay the land rent for each year of land use from the expiration date until the decision to extend the lease period is issued, based on the unit price determined according to the land price table, land price adjustment factor, and percentage rate (%) for calculating the unit price of land rent issued by the provincial People's Committee for each year of land use; during this period, the unit price for land rent (every five years) shall not be stabilized."

Article 2. Supplement Clause 9 as follows:

"9. In cases where the State leases land to an entity that has paid the full lease fee for the entire lease period and is exempted from all land lease fees, but during the lease period, such entity wishes to pay the land lease fees (without enjoying any benefits), the amount of land lease fees to be paid once for the remaining lease period shall be determined according to the policy and land price at the time when the land user submits a written request to pay the land lease fees. The single payment land lease rate for the remaining lease period shall be determined as follows:

a) In cases where the area subject to land lease fee collection of the plot or land area has a value (based on the land price in the Land Price Table) under VND 300 billion for central cities; under VND 100 billion for mountainous and highland provinces; under VND 200 billion for other provinces:

Where:

- The time required to pay the land lease fee equals the lease term minus the actual time of land use

- The term of the land type in the Land Price Table as prescribed by the Government regarding land prices.

b) In cases where the area subject to land lease fee collection of the plot or land area has a value (based on the land price in the Land Price Table) equal to or above VND 300 billion for central cities; equal to or above VND 100 billion for mountainous and highland provinces; equal to or above VND 200 billion for other provinces, the single payment land lease rate for the remaining lease period shall be determined by the Department of Natural Resources and Environment, transferred to the Appraisal Committee for Land Prices chaired by the Department of Finance for appraisal, and submitted to the People's Committee of the province for approval."

Article 3. Supplement Clause 9a as follows:

"9a. In cases where investors have paid compensation and land clearance costs according to the plan approved by the competent state agency (including self-negotiated compensation or self-acquired transfer) before July 1, 2004, and are leased land from July 1, 2004 onwards, they may deduct the compensation for land and support for land according to the approved plan or the value of the lawful land use right received through self-negotiated compensation or self-acquired transfer (determined and approved by the competent state agency at the time of self-negotiation or self-acquisition) corresponding to the remaining lease period and the area subject to land lease fee collection and not yet accounted for in production and business expenses from the land lease fees payable. The amount deducted from the land lease fees payable shall be converted into the completed annual land lease fee payments. The land lease rate for conversion purposes shall apply according to the policy and land price as of January 1, 2016.

The handling of compensation and land clearance costs according to the plan approved by the competent state agency (including self-negotiated compensation or self-acquired transfer) which the land user has paid according to the law before July 1, 2004 shall be implemented in accordance with Article 9 of Circular No. 333/2016/TT-BTC."

Article 4. Effective date

1. This Circular takes effect from March 20, 2018.

2. For cases arising and required to fulfill financial obligations from the effective date of Decree No. 135/2016/NĐ-CP and Decree No. 123/2017/NĐ-CP until the effective date of this Circular, the financial obligations shall be determined according to the provisions of Decree No. 135/2016/NĐ-CP, Decree No. 123/2017/NĐ-CP, and the guidance provided in this Circular.

3. During implementation, if there are difficulties or obstacles, it is requested that relevant agencies, units, organizations, and individuals promptly report to the Ministry of Finance for consideration and resolution./.