Decision No. 1357-TC/QD/TCT on the framework for land rental prices for domestic organizations renting land from the State

Pursuant to …;

Regarding the framework for land rental prices for domestic organizations leased by the state

within the country is leased land by the state

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THE MINISTER OF FINANCE

Pursuant to the Land Law dated July 14, 1993;

Pursuant to the Ordinance on the rights and obligations of domestic organizations granted land and leased land by the State dated October 14, 1994;

Pursuant to Article 3 of Decree No. 18/CP dated February 13, 1995 of the Government detailing the implementation of the Ordinance on the rights and obligations of domestic organizations granted land and leased land by the State;

Pursuant to Decree No. 178/CP dated October 28, 1994 of the Government stipulating the tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to the opinion of the Prime Minister in Circular No. 7463/KTN dated December 30, 1995 of the Government Office;

DECISION:

Article 1: Attached to this Decision is the Framework Rental Price for Land Lease to Domestic Organizations by the State.

Article 2: This Decision takes effect from January 1, 1996.

REGULATIONS

Framework for land rental prices for domestic organizations leased by the state

is leased land by the state

(Annexed to Decision No. 1357 TC/QĐ/TCT dated December 30, 1995)

of the Minister of Finance)

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Article 1. State-owned enterprises, enterprises of political and social organizations, defense and security enterprises, joint-stock companies, limited liability companies, private enterprises, collective economic organizations using land for production and business purposes other than agricultural, forestry, aquaculture, and salt-making (except for special cases prescribed by the Prime Minister) must pay land rental fees according to this Regulation when they are leased land by competent state authorities.

Article 2: The framework price for 1 square meter² of leased land is defined as follows:

1. For material production industries, Construction, and Transportation: Equal to 0.5% of the price of 1 square meter² of land issued by the People's Committee of provinces and centrally-administered cities together with Decree No. 87/CP dated August 17, 1994 of the Government.

2. For Commerce, Tourism, Postal Services, Banking, and other service activities: Equal to 0.7% of the price of 1 square meter² of land issued by the People's Committee of provinces and centrally-administered cities together with Decree No. 87/CP dated August 17, 1994 of the Government.

3. In cases where domestic enterprises and organizations are allowed by competent state authorities to contribute capital through the value of land use rights to form joint ventures with foreign organizations and individuals as stipulated in Decree No. 191/CP dated December 31, 1994 of the Government, the land rental form shall be applied according to Decision No. 1417 TC/TCĐN dated December 31, 1994 of the Ministry of Finance.

4. In cases where state-owned enterprises and domestic organizations have been granted land by competent state authorities before and have paid land use fees in accordance with regulations into the state budget before January 1, 1996, they will not switch to the land rental form but continue to pay land tax according to the current Property Tax Ordinance.

All other cases previously subject to property tax now switching to the land lease system according to this Framework will no longer need to pay property rent.

Article 3: The land rental price shall be stable for a minimum of five years.

The rental price for land will be adjusted in the following circumstances: When the provincial People's Committee adjusts the land price and the rental price for land has been stable for more than five years.

Each adjustment shall not exceed 15% of the value of the lease contract and shall only apply to the remaining payment periods.

Article 4. Time for calculating land rental fees:

1. Domestic organizations specified in Article 1 of this Regulation that were previously using land without paying land use fees into the state budget must now register and complete procedures for leasing land with the competent state authority and pay land rental fees into the state budget starting from January 1, 1996.

2. Cases of land leasing before January 1, 1996, shall implement payment of land rent according to this framework from the date the competent state authority signs the land lease decision.

3. Cases of land leasing after January 1, 1996, shall calculate land rent from the date the competent state authority signs the land lease decision.

Article 5. The amount of land rental fee is calculated based on the rental price stipulated in Article 2 of this Regulation, which applies to the current status of the land at the time of leasing. When there is a change in the lease decision, the rental fee will be recalculated based on the area specified in the new decision.

Article 6. Calculating the land rental fee.

1. Amount of land rent for one year:

Amount of rental fee = Single price x Leased area

leasing land for = leasing land x leasing

per year (đ) (đ/m²/year) (m²)

2. Amount of land rent for the first and last year:

Amount of rental fee = ------------------------------------------- x Leased

first year 12 months area

3. In cases where an organization leases land for multiple businesses with different rental prices, the specific area used for each business should be determined to calculate the rental fee. If it is not possible to determine the specific area for each business, the rental price of the main business activity shall be applied to the entire plot of land.

3. In cases where an organization leases land for multiple businesses with different land rental prices, the specific area used for each business must be determined to calculate the land rent. If it is not possible to determine the separate area used for each business, the main production and business activity's rental price shall be applied to the entire plot of land.

Article 7: Land rental fees shall be paid to the National Treasury as follows:

- Paid annually in installments: Land rent is paid in two installments, each installment being 50% of the annual rent, the first installment due no later than June 30; the second installment due no later than December 15 of the same year.

Article 8. Exemption and reduction of land rent.

1. In cases where newly established organizations are in the survey and construction period according to approved economic and technical justifications, they only need to pay 50% of the rental fee as stipulated in Article 2 of this Regulation.

2. In cases where land rent is paid in one lump sum for multiple years, the reduction of land rent is as follows:

- Paying in installments every five years results in a 10% reduction in the total amount payable;

- Paying periodically over more than 5 years, a reduction of 10% for the first 5 years and more than 2% for each year starting from the sixth year onwards, calculated progressively, but the maximum reduction shall not exceed 30% of the rental fee payable under the land lease contract.

Example: Enterprise B is leased a plot of land by the state with an annual rental fee of 100 million. The enterprise pays the rental fee for 8 years in the first year. The reduction in the rental fee is calculated as follows:

- Reduction for the first five years: 100 million VND x 5 years x 10% = 50 million VND

- Reduction for the sixth year: 100 million VND x 1 year x 12% = 12 million VND

- Reduction for the seventh year: 100 million VND x 1 year x 14% = 14 million VND

- The reduction amount for the eighth year: 100 million x 1 year x 16% = 16 million

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The total amount of land rent reduction is 92 million

The total land rent paid upfront for eight years is:

(100 million VND/year x 8 years) - 92 million = 708 million VND.

The Director of the Provincial Tax Departments shall inspect and verify the implementation of the land rent exemption and reduction regime as prescribed in this Article.

Article 9: This regulation takes effect from January 1, 1996.