Decree No. 114-CP provides detailed regulations for the implementation of the Law on Land Transfer Tax.

DECREE

Regulations for Implementing the Law on Land Transfer Tax

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

Based on the Law on Land Transfer Tax dated June 22, 1994, and Resolution No. 215-NQ/UBTVQH9 dated July 28, 1994, of the Standing Committee of the National Assembly, which sets the framework for land transfer tax rates when changing the purpose of land use from agricultural to non-agricultural purposes;

At the proposal of the Minister of Finance;

DECREE:

PART I

TAXPAYERS AND TAX SUBJECTS

Article 1

Taxpayers.

Organizations, households, and individuals with land use rights who obtain land transfer rights according to the laws on land must pay land transfer tax, except for cases specified in Article 2 of the Law on Land Transfer Tax and detailed in Article 2 of this Decree.

In cases where there is a difference in value when transferring land between parties, the party receiving the higher value of the land must pay the land transfer tax.

When organizations, households, or individuals with land use rights mortgage their land to borrow money but fail to repay the debt upon maturity and are therefore decided by competent state authorities to transfer the land use rights to another person to recover the debt for the creditor, they must pay the land transfer tax. The competent state authority deciding on the transfer of land use rights must deduct the full amount of land transfer tax and deposit it into the state budget before settling any expenses and repaying debts to the creditor.

Article 2

Cases not subject to land transfer tax.

1- State agencies authorized under Articles 23 and 24 of the Land Law allocating land for use by organizations, households, and individuals according to the law, including cases where state-owned houses are sold together with the transfer of land use rights;

2- The State recovers all or part of the land from organizations, households, and individuals currently using it in cases stipulated in Articles 26 and 27 of the Land Law;

3- Transferring land use rights to heirs as prescribed by the law on inheritance in cases stipulated in Article 76 of the Land Law, as follows:

Individuals granted agricultural land by the State for annual crop cultivation or aquaculture, upon death, their land use rights are transferred to their heirs as prescribed by the law on inheritance;

Individuals or members of households granted agricultural land by the State for perennial crop cultivation, forestry land for planting forests, or residential land, upon death, their land use rights are transferred to their heirs as prescribed by the law on inheritance;

4- Members of the same household transferring land use rights to each other upon separation; spouses transferring land use rights to each other upon divorce;

5- Organizations or individuals registered for real estate business selling real estate together with the transfer of land use rights attached to that real estate, which are subject to income tax and profit tax on the total revenue from the sale of real estate and the transfer of land use rights;

6- Organizations, households, or individuals leasing land or renting houses together with the land attached to those houses to other organizations, households, or individuals, which are subject to income tax and profit tax on the total revenue from leasing land or renting houses together with the land attached to those houses.

Article 3

Tax Subjects.

The tax subject for land transfer tax is the value of the land area transferred according to the law, including land with buildings and structures on it.

In cases where houses are sold together with the transfer of land use rights on which the houses stand, the tax subject is the value of the land transferred, excluding the value of the house transferred.

In cases where there is a difference in value when transferring land between parties, the tax subject is the difference in the value of the land.

PART II

BASIS FOR TAXATION

Article 4

Basis for Tax Calculation.

The basis for calculating land transfer tax is the land area, taxable land price, and tax rate.

Article 5

Land Area for Tax Calculation.

The land area for calculating land transfer tax is the actual land area transferred by organizations, households, or individuals to other organizations, households, or individuals, consistent with the cadastral map and land book of the People's Committee of the commune, ward, or town where the land is located. Where there is no cadastral map, the land area for tax calculation must be confirmed by the local land management agency at the district level.

Article 6

Taxable Land Price.

The taxable land price for land transfer tax is the price set by the Provincial People's Committee within the framework of prices established by the Government, reflecting the actual situation in the locality.

The list of taxable land prices for land transfer tax is regulated by the Provincial People's Committee and publicly displayed at the offices of tax authorities and housing and land management agencies, as well as local land management agencies.

In cases where apartments in multi-story buildings are sold together with the transfer of land use rights on which the buildings stand, the taxable land price is allocated to each floor according to the provisions of Government Decree No. 61-CP dated July 5, 1994, on the purchase and sale of housing.

In cases where land use rights are transferred along with a change in the purpose of land use from agricultural to non-agricultural purposes, the taxable land price is the price of non-agricultural land.

, Clause 1, Clause 2 Article 7a of this Regulation.

Tax Rate for Cases of Land Transfer Without Changing the Purpose of Land Use.

The tax rate for land transfer tax is calculated as a percentage (%) of the value of the land transferred, as follows:

1- For organizations, households, or individuals with land use rights who do not need to pay land use fees or have not paid land use fees when being allocated land or obtaining land use right certificates according to the laws on land, when permitted to transfer land use rights:

a) For agricultural production land, forestry land, aquaculture land, salt-making land, the tax rate is 10% (ten percent).

b) For residential land, construction land, and other types of land, the tax rate is 20% (twenty percent).

2- In cases where organizations, households, or individuals have the right to use land and have paid the land use fee as prescribed by laws on land, and in cases where the transfer of land use rights occurs for the second time or more and the previous transfer was subject to the land transfer tax as stipulated in Clause 1 of this Article, when permitted to transfer land use rights, the tax rate shall be 5% (five percent).

Organizations, households, or individuals with land use rights in the following cases shall also be considered as having paid the land use fee as prescribed by laws on land:

a) When allocated land and paid compensation for losses according to Decision No. 186-HĐBT dated May 31, 1990 of the Council of Ministers (now the Government) regarding compensation for losses of agricultural land and forested land when converted to other purposes.

b) Paid the land use fee into the State Budget according to Circular No. 60-TC/TCT dated July 16, 1993 of the Ministry of Finance when purchasing state-owned houses and purchasing non-state-owned houses together with receiving land use rights for houses thereon; allocated land for constructing residential buildings and works; allocated land instead of payment for the value of infrastructure construction works.

c) Purchased state-owned houses or houses from state-owned real estate companies according to Decree No. 61-CP dated July 5, 1994 of the Government on buying and selling residential houses.

d) Purchased houses together with receiving land use rights for houses thereon which are subject to income tax under the Income Tax Ordinance for high-income earners.

3- In cases where land is exchanged between parties with differences in value due to differences in area, location, or land category, the tax rate shall be 5% (five percent) on the difference in value.

4- In cases where the transfer of land use rights occurs after a previous conversion and payment of tax as prescribed in Clause 3 of this Article.

a) If no land use fee has been paid or has not yet been paid according to laws on land, the tax rate shall be applied as prescribed in Clause 1 of this Article.

b) If the land use fee has been paid according to laws on land, the tax rate shall be applied as prescribed in Clause 2 of this Article.

Article 8

The tax rate for cases involving the transfer of land use rights together with a change in land use purpose.

1- The tax rate for the transfer of land use rights from agricultural land to non-agricultural land is prescribed as follows:

In cases where the transfer of land use rights involves changing the purpose from stable rice-growing agricultural land to non-agricultural land, the tax rate is 50% (fifty percent); from other agricultural land to non-agricultural land, the tax rate is 40% (forty percent).

Stable rice-growing agricultural land as defined in this Decree is land for growing rice that is irrigated or has sufficient rainfall to ensure stable rice production.

Specifically, in cases where the transfer is from agricultural land to industrial construction land:

a) From stable rice-growing agricultural land to industrial construction land, the tax rate is 30% (thirty percent);

b) From other agricultural land to industrial construction land, the tax rate is 20% (twenty percent);

Industrial constructions must be built according to planning and must be approved by competent state authorities in accordance with Article 63 of the Land Law 1993.

2- In cases where the transfer is from non-agricultural land to agricultural land, the tax rate is 0% (zero percent).

PART II

DECLARATION AND PAYMENT OF TAX

Article 9

Declaration.

Organizations, households, or individuals when applying for permission to transfer land use rights must simultaneously declare to the tax authority at the location of the land being transferred about the type of land, area, location, and value of the land according to the tax declaration form and attach a permit for changing land use purpose (if applicable); provide necessary documents related to tax calculation as required by the tax authority.

Article 10

Time limit for notification of tax collection.

Upon receipt of the tax declaration for the transfer of land use rights from the taxpayer, the tax authority must issue a receipt and record the matter.

Within thirty days from the date of receipt of the tax declaration for the transfer of land use rights, the tax authority must notify the taxpayer of the amount of tax due and the deadline for payment. The payment deadline stated in the tax notice shall not exceed ten days from the date of issuance of the tax notice.

Article 11

Place of tax payment.

The tax for the transfer of land use rights shall be paid at the local tax authority where the land being transferred is located.

In cases where land is exchanged between parties with differences in value, the tax for the transfer of land use rights shall be paid at the tax authority where the land has a higher value.

Article 12

Deadline for tax payment.

The tax for the transfer of land use rights shall be paid once within the deadline specified in the tax payment notice issued by the tax authority. When collecting taxes, the tax authority must issue a tax receipt issued by the Ministry of Finance to the taxpayer.

Competent state authorities shall only issue certificates of land use rights to the recipient of land use rights when the transferor has fully paid the tax and presented the tax receipt issued by the Ministry of Finance.

PART IV

EXEMPTION FROM TAX, REDUCTION OF TAX

Article 13

Exemption from tax.

1- Exempt from tax on the transfer of land use rights for households and individuals transferring land use rights to move and settle in new economic zones, mountainous areas, and islands, according to the decision of competent state authorities:

Mountainous regions as defined in this clause are mountainous communes listed in the directory of the National Ethnic Minorities Committee and the Mountainous Areas of the Government.

New economic zones as defined in this clause are areas planned to relocate people to implement economic and social development projects according to approved plans by competent state authorities.

2- Exempt from tax on the transfer of land use rights for cadres, workers, and civil servants who move to settle in new economic zones, mountainous areas, and islands due to job transfers according to decisions of competent authorities;

3- Exempt from tax on the transfer of land use rights for cadres, workers, and civil servants who move their residences upon completion of tasks in new economic zones, mountainous areas, and islands and retirement.

Article 14

Reduction of tax.

Reduce the tax on the transfer of land use rights by 50% (fifty percent) in the following cases:

1- Households headed by persons classified as first-class disabled veterans, second-class disabled veterans, and first-class disabled servicemen, and second-class disabled servicemen.

2- The head of a family of martyrs' relatives is entitled to receive state allowances;

3- Disabled persons who are no longer capable of working, minors under the age of majority, and elderly individuals living alone without support;

4- Officials, workers, and civil servants relocated to areas not classified as new economic zones, mountainous regions, or islands due to job transfer or retirement.

Article 15

Procedures and authority for exemption and reduction of taxes.

Each subject specified in Article 13 and Article 14 of this Decree shall only be eligible for tax exemption or reduction on the land transfer tax for the initial area of land granted by the State (based on the land use right certificate and the land registry of the People's Committee of the commune, ward, or town where the land transfer takes place), in accordance with the criteria for tax exemption or reduction.

The examination of tax exemption or reduction on land transfer tax shall be carried out by the tax authority.

The Minister of Finance shall provide detailed guidance on the procedures and authority for tax exemption and reduction on land transfer tax.

CHAPTER V

FINAL PROVISIONS

Article 16

Handling violations.

Tax authorities, tax officials, taxpayers, and other individuals who violate laws related to land transfer tax shall be dealt with according to Articles 17, 18, 19, and 20 of the Law on Land Transfer Tax and government regulations on administrative penalties in the field of taxation.

Article 17

Awards.

Tax authorities, tax officials who perform their tasks well, and individuals who contribute to detecting violations of the Law on Land Transfer Tax shall be rewarded according to the general government system.

Article 18

This Decree shall take effect from July 1, 1994.

All previous regulations contrary to this Decree are hereby abolished.

Article 19

The Minister of Finance shall guide the implementation of this Decree.

Article 20

The Minister, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, and Chairmen of Provincial People's Committees directly under the Central Government are responsible for organizing the implementation of this Decree./.