Circular No. 120/2011/TT-BTC guiding the Government's Decree No. 20/2011/NĐ-CP dated March 23, 2011 detailing and guiding the implementation of Resolution No. 55/2010/QH12 dated November 24, 2010 of the National Assembly on the exemption and reduction of agricultural land use tax.

 CIRCULAR

Guidelines for Decree No. 20/2011/NĐ-CP dated March 23, 2011

of the Government detailing and guiding the implementation

Resolution No. 55/2010/QH12 dated November 24, 2010 of the National Assembly

on exemption and reduction of agricultural land use tax

_________________________________

 

Extend the period of exemption from agricultural land use tax as stipulated in Resolution No. 55/2010/QH12 dated November 24, 2010 of the National Assembly on the exemption and reduction of agricultural land use tax which has been amended and supplemented with some articles pursuant to Resolution No. 28/2016/QH14 dated November 11, 2016 of the National Assembly until December 31, 2025.

Pursuant to the Land Law 2003;

Pursuant to the Law on Tax Administration No. 78/2006/QH11;

Pursuant to Resolution No. 55/2010/QH12 dated November 24, 2010 of the National Assembly of the Socialist Republic of Vietnam, Session XII on exemption and reduction of agricultural land use tax;

Pursuant to Decree No. 20/2011/NĐ-CP dated March 23, 2011 of the Government detailing and guiding the implementation of Resolution No. 55/2010/QH12 dated November 24, 2010 of the National Assembly on exemption and reduction of agricultural land use tax;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Finance,

The Ministry of Finance guides the implementation as follows:

PART I

CONTENTS OF EXEMPTION AND REDUCTION OF AGRICULTURAL LAND USE TAX

Article 1. Subjects eligible for exemption from agricultural land use tax

The subjects eligible for exemption from agricultural land use tax shall be implemented in accordance with Article 1 of Decree No. 20/2011/NĐ-CP, specifically:

1. Exemption from agricultural land use tax for the entire area of agricultural land used for research and experimental production; the area of annual crop land that has at least one rice crop in a year; the area of salt-making land. The area of annual crop land that has at least one rice crop in a year includes the area of land planned and scheduled to plant at least one rice crop in a year or the area of land planned and scheduled to plant annual crops but actually planted at least one rice crop in a year.

2. Exemption from agricultural land use tax for the entire area of agricultural land granted or recognized by the State for poor households.

The determination of poor households shall be based on the poverty standard issued by the Prime Minister's Decision in each period.

For the period from 2011 to 2015, the determination of poor households shall be made according to the provisions of Decision No. 09/2011/QĐ-TTg dated January 30, 2011 of the Prime Minister on issuing the poverty and near-poverty standards for the period 2011-2015 and any subsequent amendments and supplements (if any).

In cases where provincial People's Committees have specific poverty standards applicable in their localities in accordance with the law, the poverty standard set by the provincial People's Committee shall be used to determine poor households.

3. Exemption from agricultural land use tax for the area of agricultural land within the quota allocated to the following subjects:

a) Households and individuals recognized by the State as having been assigned or acknowledged land for agricultural production, including inherited, donated, or transferred land.

Households and individuals engaged in agriculture including: those who have permanent residence registration in the locality; those whose main source of livelihood is agricultural, forestry, aquaculture, or salt-making and are confirmed by the People's Commune Council (hereinafter referred to as the People's Commune Council) as having long-term residence in the locality but without permanent residence registration; households and individuals previously working in non-agricultural sectors and having permanent residence registration in the locality but now unemployed; state civil servants, employees, and military personnel who have retired due to loss of capacity or job restructuring and are receiving one-time or multi-year allowances and living permanently in the locality; children of state civil servants, employees, and workers who have reached working age but are unemployed and live in the locality.

b) Households and individuals who are members of agricultural cooperatives that have received stable land allocation contracts from cooperatives, state-owned farms, or state-owned forest farms for agricultural production in accordance with the law.

The allocation of land contracts by cooperatives and state-owned farms and forest farms for agricultural production shall be carried out in accordance with Decree No. 135/2005/NĐ-CP dated November 8, 2005 of the Government and related guiding documents.

c) Households and individuals who are state-owned farm or forest farm workers who have received stable land allocation contracts from state-owned farms or forest farms for agricultural production in accordance with the law.

State-owned farm or forest farm workers include: officials, workers, and staff currently working for state-owned farms or forest farms; households with members currently working for state-owned farms or forest farms or who have retired or are receiving disability benefits and residing in the area; households with the need to directly engage in agricultural, forestry, or aquaculture production and residing in the area.

d) Households and individuals engaged in agricultural production who have the right to contribute their agricultural land to establish an agricultural cooperative in accordance with the Law on Cooperatives.

Article 2. Subjects eligible for reduction in agricultural land use tax

The subjects eligible for reduction in agricultural land use tax shall be implemented in accordance with the provisions of Article 2 of Decree No. 20/2011/NĐ-CP, specifically:

1. Reduce by 50% the annual recorded agricultural land use tax on the area of agricultural land exceeding the quota of allocated agricultural land but not more than the quota of transferred rights to use agricultural land for households and individuals as stipulated in Clause 3, Article 1 of Decree No. 20/2011/NĐ-CP.

For the area of agricultural land exceeding the quota of transferred rights to use agricultural land, 100% of the agricultural land use tax must be paid.

2. For the area of agricultural land that the State allocates to economic organizations, political organizations, socio-political organizations, social-professional organizations, public institutions, and other units, it is regulated as follows:

a) Reduce by 50% the annual recorded agricultural land use tax on the area of agricultural land that the State allocates to economic organizations, political organizations, socio-political organizations, social-professional organizations, public institutions, and other units which directly use the land for agricultural production.

b) For the area of agricultural land that the State allocates to economic organizations, political organizations, socio-political organizations, social-professional organizations, public institutions, and other units which manage but do not directly use the land for agricultural production and lease to other organizations or individuals under contracts for agricultural production, the land recovery shall be carried out in accordance with the Land Law. During the period when the State has not recovered the land, 100% of the agricultural land use tax must be paid.

3. Reduce by 50% the annual recorded agricultural land use tax on the area of agricultural land that the State allocates to people's armed forces units for management and use.

Chapter II

QUOTA OF LAND AND LAND CLASSIFICATION

Article 3. Quota of allocated agricultural land, quota of transferred rights to use agricultural land

1. The quota of allocated agricultural land shall be implemented in accordance with the provisions of Article 70 of the Land Law, Article 69 of Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on the implementation of the Land Law, and specific levels set by provincial People's Committees and municipal People's Committees under the Central Government for application at localities.

In cases where provincial People's Committees and municipal People's Committees under the Central Government have not issued specific levels regarding the quota of allocated agricultural land, the maximum level prescribed in Article 70 of the Land Law and Article 69 of Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government shall be applied.

2. The quota of transferred rights to use agricultural land shall be implemented in accordance with the provisions of Article 71 of the Land Law, Resolution No. 1126/2007/NQ-UBTVQH11 dated June 21, 2007 of the Standing Committee of the National Assembly, and specific levels set by provincial People's Committees and municipal People's Committees under the Central Government for application at localities.

In cases where provincial People's Committees and municipal People's Committees under the Central Government have not specified specific levels regarding the quota of transferred rights to use agricultural land, the maximum level prescribed in Resolution No. 1126/2007/NQ-UBTVQH11 dated June 21, 2007 of the Standing Committee of the National Assembly shall be applied.

3. The quota of agricultural production land is determined according to each type of land:

3.1. In cases where the taxpayer of agricultural land use tax has both areas of agricultural production land for annual crop cultivation (excluding rice fields) and areas for perennial crop cultivation, the quota of agricultural production land serving as the basis for exemption and reduction of tax shall be calculated separately for each type of land for annual crop cultivation and each type of land for perennial crop cultivation.

Example 1: Mr. A's household, residing in the Red River Delta, has two types of agricultural production land: Land for annual crop cultivation is 6 hectares (the quota of allocated agricultural land according to regulations is 2 hectares, the quota of transferred rights to use agricultural land according to regulations is 4 hectares); Land for perennial crop cultivation is 15 hectares (the quota of allocated land according to regulations is 10 hectares, the quota of transferred rights to use agricultural land according to regulations is 20 hectares).

Mr. A's household is exempted from agricultural land use tax as follows:

- For the area of land for annual crop cultivation:

▪ Exempted from tax on the area within the quota of allocated agricultural land: 2 hectares;

▪ Reduced by 50% on the area exceeding the quota of allocated agricultural land but not more than the quota of transferred rights to use agricultural land: 2 hectares (4 hectares - 2 hectares = 2 hectares);

▪ Must pay 100% of the agricultural land use tax on the area exceeding the quota of transferred rights to use agricultural land: 2 hectares (6 hectares - 4 hectares = 2 hectares).

- For the area of land for perennial crop cultivation:

▪ Exempted from tax on the area within the quota: 10 hectares;

▪ Reduced by 50% of the recorded tax on the area exceeding the quota of allocated agricultural land but not more than the quota of transferred rights to use agricultural land: 5 hectares.

3.2. In cases where the total area of land for annual crop cultivation of the taxpayer includes both parts for planting at least one paddy crop in a year and parts for planting other annual crops, the quota of agricultural production land for consideration of exemption and reduction of tax shall be calculated separately for the part for planting other annual crops.

Example 2Mr. B's household, residing in the Red River Delta, has a total area of land for annual crop cultivation of 3 hectares (the quota of allocated agricultural land according to regulations is 2 hectares), including an area of land for planting at least one paddy crop in a year of 0.5 hectares, and an area of land for planting other annual crops of 2.5 hectares.

Mr. B is exempted from agricultural land use tax on the area of land for planting paddy crops of 0.5 hectares; exempted from agricultural land use tax on the area of land for planting other annual crops within the quota of 2 hectares; reduced by 50% of the recorded tax on the area of land for planting other annual crops exceeding the quota of 0.5 hectares.

3.3. In cases where the taxpayer registers their permanent residence in one commune but has areas of agricultural production land in other communes (including communes in different districts within the same province) eligible for exemption and reduction of agricultural land use tax, the quota of agricultural production land according to each type of land serving as the basis for exemption and reduction of tax shall be calculated separately for the total area of each type of land in different communes.

Article 4. Tax Category for Agricultural Land

The tax category for agricultural land use shall be stable for ten years, from January 1, 2011 to December 31, 2020, based on the land categories that have been defined and implemented during the period from 2003 to 2010.

In cases where localities have been approved by the Prime Minister to adjust the tax category for agricultural land use starting from 2011, such adjustments shall be implemented stably until the end of 2020.

Chapter III

IMPLEMENTATION

Article 5. Authority and Procedure for Exemption and Reduction of Tax

The authority to determine and the procedure for issuing decisions on exemption and reduction of agricultural land use tax shall be carried out in accordance with the laws on tax management, specifically:

1. The tax authority determines and issues decisions on exemption and reduction of agricultural land use tax:

The Director of the Tax Department decides on exemption and reduction for taxpayers directly managed by the Tax Department.

The Head of the District Tax Office decides on exemption and reduction for taxpayers directly managed by the District Tax Office.

2. Procedure for Exemption and Reduction of Tax:

Based on the list of exemptions and reductions sent by the People's Committee of the commune, along with the declaration forms of taxpayers and documents proving the exempted or reduced tax objects of taxpayers, the District Tax Office determines the amount of tax exempted or reduced for each taxpayer.

For taxpayers directly managed by the Tax Department (including cases where the Tax Department manages but delegates collection to the District Tax Office), the District Tax Office prepares a separate list and the amount of tax exempted or reduced for each taxpayer to submit to the Tax Department for review and issuance of the decision on exemption and reduction for taxpayers.

For taxpayers managed by the District Tax Office, the Head of the District Tax Office issues the decision on exemption and reduction of tax along with the list of taxpayers exempted or reduced for each commune.

Based on the list of exemptions and reductions of agricultural land use tax decided by the tax authority, the People's Committee of the commune announces the amount of tax exempted or reduced to each approved taxpayer and publicly posts it at convenient locations for taxpayers to know.

For cases exempted from tax according to Clause 1, Article 1 of Decree No. 20/2011/NĐ-CP, the tax authority issues a single decision on exemption of tax for multiple years consistent with the exemption period specified by law for specific cases.

3. The District Tax Office reports annually on the exemptions and reductions implemented in 2011 to the Provincial Tax Department for monitoring and inspection. Each year, if there are adjustments to the tax-exempted or reduced objects and amounts, the District Tax Office submits supplementary reports to the Provincial Tax Department. Reports must be submitted to the Provincial Tax Department within 15 days from the date of issuance of the exemption and reduction decision.

The Provincial Tax Department under the Central Government compiles the situation of exemptions and reductions of agricultural land use tax in the locality and reports to the General Department of Taxation before December 31, 2011. Each year, if there are adjustments to the tax basis leading to changes in the amount of agricultural land use tax exempted or reduced for the province, the Provincial Tax Department under the central government compiles and submits supplementary reports to the General Department of Taxation before December 31 of the year.

Article 6. Implementation Organization

1. Annual Tax Register:

Based on the 2010 Agricultural Land Use Tax Register and actual conditions in the locality, the District Tax Office collaborates with the People's Committee of the commune to identify the tax-exempted objects, tax-reduced objects, and those required to pay 100% agricultural land use tax from 2011 onwards to establish the tax register as follows:

1.1. Establishing the Original Tax Register to Monitor Agricultural Land Users:

The original tax register must reflect the total area of agricultural production land of organizations, households, and individuals, including: Total area of agricultural production land of organizations, households, and individuals; area of agricultural land exempted from tax as stipulated in Article 1 of Decree No. 20/2011/NĐ-CP; area of agricultural land eligible for tax reduction as stipulated in Article 2 of Decree No. 20/2011/NĐ-CP; area of agricultural land exceeding the quota for transfer of land use rights required to pay 100% agricultural land use tax, and other cases required to pay 100% agricultural land use tax.

After the original tax register is completed, the portion of the area eligible for 50% tax reduction (required to pay 50% of the recorded tax) and the area required to pay 100% agricultural land use tax are transferred to the tax collection monitoring register as stipulated below point 1.2 for tax collection management.

Taxpayers who are exempted from tax only need to prepare the application procedures for tax exemption once for multiple years.

Taxpayers who have prepared the application procedures for tax exemption and are listed in the original tax register for exemption from 2010, now fall under the tax exemption category according to Decree No. 20/2011/NĐ-CP, do not need to re-declare and re-prepare the tax exemption application procedures, the tax authority will transfer the monitoring register from the 2010 tax register to the 2011 tax register.

If there is a change in the tax basis during the year, taxpayers must re-declare and submit the declaration form to the People's Committee of the commune to adjust the tax register.

The tax-exempted objects listed in the original tax register serve as the basis for monitoring tax-exempted objects from the 2011 tax year to the 2020 tax year.

1.2. Establishing the Tax Collection Monitoring Register to Monitor Objects Required to Pay 50% and 100% Agricultural Land Use Tax Annually (referred to as the Tax Collection Monitoring Register).

Based on the Tax Collection Monitoring Register, the tax authority monitors annual tax payments and tax reductions according to current regulations.

The Tax Collection Monitoring Register is established once (transferred from the Original Tax Register). If there is a change in the tax basis during the year, taxpayers must re-declare and submit the declaration form to the People's Committee of the commune to adjust the tax register.

The settlement of agricultural land use tax and the process of establishing the tax register for taxpayers required to pay agricultural land use tax are carried out in accordance with the guidance provided in Circular No. 89-TC/TCT dated November 9, 1993, issued by the Ministry of Finance to guide the implementation of Decree No. 74/CP dated October 25, 1993, of the Government detailing the implementation of the Law on Agricultural Land Use Tax.

2. For households and individuals who are farm and forest workers, cooperative members receiving stable land leases from farms and forests:

In cases where tax exemptions or reductions are being implemented according to Resolution No. 15/2003/QH11 dated June 17, 2003 of the National Assembly, they shall be carried out in accordance with the provisions of Clause 1, Article 6 of this Circular.

In cases where tax exemptions or reductions have not been implemented according to Resolution No. 15/2003/QH11 but now fall under the category eligible for tax exemptions or reductions on agricultural land use taxes pursuant to Resolution No. 55/2010/QH12 and Decree No. 20/2011/NĐ-CP, the following procedures shall be followed: The Tax Office shall coordinate with forestry and farm enterprises to issue tax declaration forms for agricultural land use taxes to households that lease land; check and compare the tax calculation declarations with the lease contracts regarding the area of land, land classification, and the annual agricultural land use tax recorded for each household, and enter these into the original tax ledger as the basis for directly reviewing and granting tax exemptions or reductions to each taxpayer.

For households and individuals contributing farmland to establish agricultural production cooperatives, the Tax Authority shall base its actions on the certificates of land use rights for agricultural production issued to each household. If such certificates have not yet been issued, the Tax Authority shall rely on the declarations made by each household when joining the cooperative, confirmed by the People's Committee of the commune, to establish the original tax ledger in accordance with the provisions of Clause 1 of this Article.

For households and individuals having agricultural production land areas in different communes, the following procedures shall apply:

The procedure for granting tax exemptions on agricultural land use in communes where the agricultural producers do not have permanent residence registration shall be conducted first; thereafter, tax exemptions shall be considered for the portion of agricultural production land areas in communes where the taxpayers have permanent residence registration, specifically as follows:

Households with agricultural production land areas in different communes shall be responsible for declaring on the form issued together with this Circular, which must be confirmed by the People's Committee of the commune where the agricultural production land is located regarding the area of land, land classification for taxation, and the amount of tax already exempted or reduced.

Based on this confirmation, the People's Committee of the commune where the household has permanent residence registration shall aggregate the total area to determine the agricultural production land area within the exemption limit and the excess area allocated for agricultural land use rights transfer but not exceeding the limit for transferring agricultural land use rights, which must pay 100% agricultural land use tax. After confirming the specific exempted and reduced tax objects and areas for each household, it shall notify in writing the County Tax Office to implement the tax exemptions or reductions on agricultural land use and inform the People's Committee of the commune where the household has agricultural production land for monitoring and management.

In cases where households have agricultural production land in a locality other than their registered place of permanent residence, but the households do not declare and do not provide confirmation from the People's Committee of the commune where the agricultural production land is located to the People's Committee of the commune where they have permanent residence registration, they shall not be eligible for tax exemptions on agricultural land use, but only for tax reductions on the area not exceeding the limit for transferring agricultural land use rights. The excess area beyond the limit for transferring agricultural land use rights must pay 100% agricultural land use tax.

Example 3Household Mr. A is a farmer with 2 hectares of annual crop land in Commune H, Province B, where he has permanent residence registration in the Southeast region (the limit for agricultural production land for annual crops is set at 3 hectares, and the limit for transferring agricultural land use rights is 20 hectares). In Commune K, where Mr. A does not have permanent residence registration, there is an area of 4 hectares of annual crop land, which has been confirmed by the People's Committee of Commune K; the average tax recorded on the entire area is 500 kg/ha.

Based on the confirmation by the People's Committee of Commune K regarding Mr. A's agricultural production land area of 4 hectares, the People's Committee of Commune H determines the total area of annual crop land of Mr. A to be 6 hectares. According to the regulations, Mr. A will be granted tax exemptions and reductions as follows:

Mr. A will be exempted from agricultural land use tax for 3 hectares within the limit in Commune K, while the remaining 3 hectares exceeding the limit (1 hectare in Commune K and 2 hectares in Commune H) will be subject to a 50% reduction in the recorded tax. The People's Committee of Commune H, where Mr. A has permanent residence registration, shall notify in writing the People's Committee of Commune K about the tax exemption for Mr. A's agricultural land use in Commune K for 3 hectares, and the 1 hectare will be subject to a 50% reduction in the annual recorded agricultural land use tax, while also notifying the Tax Office in the district where Commune K is located for monitoring and management.

If Mr. A does not declare and does not provide confirmation from the People's Committee of Commune K, Mr. A will only be exempted from agricultural land use tax for 2 hectares in Commune H, while the remaining 4 hectares in Commune K will only be subject to a 50% reduction in the recorded tax.

For the agricultural land use tax temporarily collected in 2011, final settlement must be completed by the end of the year based on the tax ledger established according to the prescribed regulations.

Matters concerning declaration, notification deadlines, payment of tax, offsetting tax payments, refunding tax, and penalties for tax violations shall be carried out in accordance with the Law on Tax Administration and guiding documents implementing the Law on Tax Administration.

For subjects eligible for tax exemptions or reductions on agricultural land use not specified in Resolution No. 55/2010/QH12 and Decree No. 20/2011/NĐ-CP, but specified in the 1993 Land Use Tax Law and guiding documents implementing the 1993 Land Use Tax Law, tax exemptions or reductions shall be implemented according to the provisions of those documents.

Agricultural land funds used for communal public purposes, leased to households and individuals, are not subject to agricultural land use tax according to the provisions of the Law on Land Use Tax and guiding documents, and do not qualify for tax exemptions or reductions on agricultural land use tax as stipulated in Decree No. 20/2011/NĐ-CP and this Circular.

Taxpayers who are entitled to both tax exemptions and reductions on agricultural land use tax according to Resolution No. 55/2010/QH12, Decree No. 20/2011/NĐ-CP, and the provisions of the Land Use Tax Law shall enjoy the highest level of tax exemptions or reductions on agricultural land use tax.

Article 7. Effective Date

This Circular takes effect from October 1, 2011. The review and decision-making process for tax exemptions or reductions on agricultural land use tax as stipulated in this Circular shall be implemented from the 2011 tax year until the end of the 2020 tax year.

The forms of declaration number 01/SDNN, form 02/SDNN, form 03/SDNN, and the tax payment notification form number 04/SDNN issued together with this Circular replace the previous forms of declaration and agricultural land tax notifications issued together with Circular No. 28/2011/TT-BTC dated February 28, 2011, guiding the implementation of Decree No. 85/2007/NĐ-CP dated May 25, 2007, and Decree No. 106/2010/NĐ-CP dated October 28, 2010, of the Government.

In the course of implementation, if any difficulties arise, organizations and individuals are requested to promptly report them to the Ministry of Finance for study and resolution.