Circular No. 141/2007/TT-BTC guiding amendments and supplements to Circular No. 120/2005/TT-BTC dated December 30, 2005 of the Ministry of Finance on implementing Decree No. 142/2005/NĐ-CP dated November 14, 2005 of the Government on land rental fees and water surface rental fees.

CIRCULAR

HGuidelines for amending and supplementing Circular No. 120/2005/TT-BTC dated December 30, 2005 of the Ministry of Finance guiding the implementation of Decree No. 142/2005/NĐ-CP dated November 14, 2005 of the Government on land rental fees and water surface rental fees.

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Pursuant to the Land Law;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on the enforcement of the Land Law (hereinafter referred to as Decree No. 181/2004/NĐ-CP);

Pursuant to Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when the State recovers land (hereinafter referred to as Decree No. 197/2004/NĐ-CP);

Pursuant to Decree No. 142/2005/NĐ-CP dated November 14, 2005 of the Government on land rental fees and water surface rental fees (hereinafter referred to as Decree No. 142/2005/NĐ-CP);

Pursuant to Decree No. 17/2006/NĐ-CP dated January 27, 2006 of the Government amending and supplementing certain articles of decrees guiding the implementation of the Land Law and Decree No. 187/2004/NĐ-CP on converting state-owned companies into joint-stock companies (hereinafter referred to as Decree No. 17/2006/NĐ-CP);

The Ministry of Finance issues guidelines for amending and supplementing Circular No. 120/2005/TT-BTC dated December 30, 2005 of the Ministry of Finance guiding the implementation of Decree No. 142/2005/NĐ-CP dated November 14, 2005 of the Government on land rental fees and water surface rental fees (hereinafter referred to as Circular No. 120/2005/TT-BTC) as follows::

I. SUPPLEMENT POINT 1 SECTION II PART A AS FOLLOWS:

"1. Supplement at the end of paragraph 1.4 the following content:

Economic organizations that are leased land by the State as specified in paragraphs 1.3 and 1.4 of Point 1 of this Section include economic organizations established through joint ventures between domestic investors and foreign investors as provided for in Article 8 of Decree No. 108/2006/NĐ-CP dated September 22, 2006 of the Government detailing and guiding the implementation of certain provisions of the Investment Law..”

2. Supplement one additional paragraph (paragraph 1.7) as follows:

1.7From July 1, 2007 onwards, households and individualswho receive the transfer of agricultural land use rights under the forms of transfer, gift, or debt settlement according to the mortgage or guarantee contract with land use rights, and use such land for agricultural production, forestry, aquaculture, or salt-making purposes must convert the excess area beyond the limit prescribed in Resolution No. 1126/2007/NQ-UBTVQH11 dated June 21, 2007 of the Standing Committee of the National Assembly regarding the limit of transferring agricultural land use rights for households and individuals for agricultural purposes into leasehold land." II. REPLACE SECTION IV PART B AS FOLLOWS:

"IV- Determination of land rental fees and water surface rental fees as stipulated in Article 7 of Decree No. 142/2005/NĐ-CP; some contents are guided as follows:

1. Clause 1 is guided as follows:

1.1 Annual land rental fees and water surface rental fees are calculated by multiplying the leased land area with the rental price; the leased land area is determined based on the decision on land leasing (or Lease Contract) issued by the competent state authority. In cases where the actual land area used differs from the land area recorded in the decision on land leasing (or Lease Contract) issued by the competent state authority, the calculation shall be based on the actual land area used.

If part of the land allocated without payment for land use rights is used for business or service purposes, the land user must pay land rental fees for the actual land area used for business or service purposes.

1.2 In cases where the entity granted land without payment for land use rights uses the land both for political tasks and for business or service purposes (without being able to separate the land areas for these purposes), the land rental fees payable for the business or service purposes shall be calculated using the allocation method.

The basis for calculating the land rental fees for allocation is the annual land rental fees payable calculated based on the total land area (allocated) and the rental price set by the competent authority according to Article 6 of Decree No. 142/2005/NĐ-CP. The allocation criterion is the revenue from goods and services carried out in the year and implemented on the principle of a single price (business price) for allocation.

Based on the price coefficient of one or two types of services accounting for the highest proportion in the total revenue of the unit, the tax authority and the unit agree on the principle of ensuring the unit's obligations to the State budget while avoiding overcharging. Calculation is illustrated as follows:Example: A provincial government guesthouse carries out both political tasks and business services such as room accommodation, dining, conference room rental, parking, etc. The annual land rental fees payable for the guesthouse's land area is 25 million VND; - Revenue from commercial room accommodation is 300 million VND - Revenue from internal room accommodation is 100 million VND

- Revenue from other commercial activities is 150 million VND

- Revenue from other internal activities is 50 million VND

Based on the total revenue from room accommodation, the average price per bed per day-night for commercial room accommodation is 150,000 VND, and for internal room accommodation is 100,000 VND, thus the business price and internal price ratio is 1.5 times. The total converted revenue (for calculating the land rental fees payable) is as follows:

300 million + (100 million x 1.5) + 150 million + (50 million x 1.5) = 675 million.

The land rental fees payable = (25 million / 675 million) x (300 million + 150 million) = 12,150,000 VND

Annually, the tax authority bases on the financial report of the previous year to negotiate with the unit about the provisional land rental fees payable for the current year. In the following year, based on the financial report of the previous year, the tax authority and the unit will agree on the land rental fees payable for the previous year and adjust it in the Notice of Land Rental Fees Payment for the current year.

2. Clause 2 is guided as follows:

For oil and gas exploitation projects in Vietnam's territorial waters and continental shelf, the determination of water surface rental fees (sea surface) is as follows:

- The area for calculating water surface rental fees (sea surface) is the development area according to the Project Development Plan approved by the Prime Minister.

2. Clause 2 is guided as follows:

For oil and gas exploitation projects in Vietnam's territorial sea and continental shelf, the determination of surface water rental fees (sea surface) shall be as follows:

- The area for calculating the surface water rental fee (sea surface) is the Development Area according to the Project Development Plan approved by the Prime Minister.

- The rental price for water surface (sea surface) shall be applied at the maximum level within the range of rental prices for water surface as stipulated in Clause 1 and Clause 2 of Article 5 of Decree No. 142/2005/NĐ-CP.

- The time for calculating the rental fee for water surface (sea surface) shall be calculated from the effective date of the Development Plan of the oil and gas exploitation project after being approved by the Prime Minister.

3. The deduction of compensation and support for land from the land rental fee to be paid according to Clause 3 of Article 7 of Decree No. 142/2005/NĐ-CP (amended and supplemented by Clause 1 of Article 4 of Decree No. 17/2006/NĐ-CP) shall only apply to the area of land subject to payment of the land rental fee and shall be specifically guided as follows:

3.1 Organizations and individuals who have been granted land rental by the State and have prepaid funds to pay for land compensation and support according to Decree No. 197/2004/NĐ-CP and implement the payment of land rental fees according to Decree No. 142/2005/NĐ-CP (applicable for the period of land rental starting from January 1, 2006 onwards) shall be allowed to deduct the amount of land compensation and support already paid (with valid supporting documents and according to the plan approved by the competent authority) from the land rental fee to be paid; the amount deducted shall not exceed the total land rental fee payable for the entire lease term recorded in the land rental decision or land rental contract (excluding the extended lease term).

In cases where the individual or organization renting land from the State negotiates the amount of land compensation and support with the person whose land is being expropriated (without going through the Compensation, Support, and Resettlement Committee as stipulated in Article 39 of Decree No. 197/2004/NĐ-CP), the amount of land compensation and support to be deducted shall be calculated based on the land value for the purpose of land use assigned or recognized by the People's Committee of the province at the time when the land expropriation decision of the competent state agency becomes effective.

In cases where organizations and individuals renting land from the State have paid land compensation and support according to Decree No. 197/2004/NĐ-CP and paid the land rental fee annually in 2005 according to Decision No. 189/2000/QĐ-BTC dated November 24, 2000 of the Minister of Finance regarding the issuance of regulations on land rental fees, water surface rental fees, and sea surface rental fees applicable to foreign investment forms in Vietnam, Circular No. 35/2001/TT-BTC dated May 25, 2001 of the Ministry of Finance guiding the payment of land rental fees and joint venture capital contributions based on the value of land use rights of domestic organizations, households, and individuals, they shall not be allowed to deduct the amount of land compensation and support from the land rental fee to be paid; From January 1, 2006 onwards, if they continue to rent land and pay the land rental fee according to Decree No. 142/2005/NĐ-CP, they may deduct the amount of land compensation and support (not yet allocated to production and business costs) from the land rental fee to be paid according to the above provisions.

Based on the approved compensation and support plan for land and other relevant documents and materials about the amount of land compensation and support already paid, the lessee shall prepare a final report on land compensation and support (including comprehensive and detailed figures), clearly stating the figures according to the approved plan, the actual payments made, and the unallocated portion to production and business costs (for projects that have paid land compensation and support according to Decree No. 197/2004/NĐ-CP and paid the land rental fee in 2005 under the regulations in effect before the Decree No. 142/2005/NĐ-CP took effect); send it to the Department of Finance (for plans approved by the Provincial People's Committee) or the District People's Committee (for plans approved by the District People's Committee) for confirmation of the final report. The tax authority shall base on the confirmed final report, verify the accuracy and appropriateness of the figures (if necessary), implement the deductions according to this Circular, and retain one original copy in the lessee's land rental fee calculation file.

3.2 Based on the amount of land compensation and support to be deducted determined according to Subparagraph 3.1 of this point, the deduction of land compensation and support from the land rental fee to be paid shall be carried out as follows:

a) In cases where the land rental fee is paid once for the entire lease period, the land compensation and support can be deducted from the entire lease period's land rental fee; if the land rental fee for the entire lease period exceeds the land compensation and support, the lessee must pay the difference in full to the state budget in the first year of paying the land rental fee.

b) In cases where the land rental fee is paid annually, the tax authority shall calculate the gradual deduction from the annual land rental fee notification based on the amount of land compensation and support to be deducted from the land rental fee to be paid and the annual land rental fee to be paid, but not exceeding the amount specified in Clause 1 of Article 4 of Decree No. 17/2006/NĐ-CP. The lessee must continue to pay the remaining amount after the deduction has been completed (if still within the lease period).

Cases that have determined "the number of years (n) during which land compensation and support can be deducted from the land rental fee to be paid (no need to pay the land rental fee)" according to the guidance in Subparagraph b of Point 2 of Section IV of Part B of Circular No. 120/2005/TT-BTC now must implement the "gradual deduction" according to the guidance in this Circular.

3.3 In cases where land is rented without paying the land rental fee; projects exempted from land rental fees according to Clause 1 and Clause 2 of Article 14 of Decree No. 142/2005/NĐ-CP, the entity renting land from the State must compensate and support the person whose land is being expropriated according to the laws on compensation, support, and resettlement; the costs of compensation, support, and resettlement shall be accounted for as part of the project's investment costs.

3.4 Projects exempted from land rental fees according to Clause 3 and Clause 4 of Article 14 of Decree No. 142/2005/NĐ-CP, the land compensation and support can be deducted from the land rental fee to be paid immediately after the exemption period for land rental fees ends.”

III. AMEND POINT 1 OF SECTION V OF PART B AS FOLLOWS:

“1. Clause 2 shall be guided as follows:

1.1 Investment projects with land lease decisions, which were handed over for use before January 1, 2006, and pay annual land lease fees shall continue to implement the principle of adjusting the unit price of land lease fees as recorded in the Investment License, Land Lease Decision issued by competent state agencies to investors, or Land Lease Contract signed between state authorities and the lessee, as follows:

For investment projects where one of the following three types of documents: Investment License, Land Lease Decision, or Land Lease Contract, issued (signed) according to the provisions of the Law on Foreign Investment, the Law on Domestic Investment, stipulates the unit price of land leasing and water surface leasing and the principle of adjusting the unit price of leasing according to the regulations on unit prices for land leasing and water surface leasing by the Ministry of Finance (Decision No. 210A-TC/VP dated April 1, 1990, Decision No. 1417TC/TCĐN dated December 30, 1994, Decision No. 179/1998/QĐ-BTC dated February 24, 1998, Decision No. 189/2000/QĐ-BTC dated November 24, 2000, Decision No. 1357TC/QĐ-TCT dated December 30, 1995), shall be:

- Continue to implement the unit price of land leasing and water surface leasing specified in the Investment License; Land Lease Decision or Land Lease Contract if the stabilization period of five years has not yet expired.

- After the expiration of the five-year stabilization period, adjust the unit price of leasing according to the principle of adjusting the unit price of leasing recorded in the Investment License; Land Lease Decision or Land Lease Contract.

- The procedures and formalities for adjusting the unit price of land leasing and water surface leasing shall be implemented according to the provisions of Clause 2 Article 17 of Decree No. 142/2005/NĐ-CP and the guidance at Point 2 Section I Part D Circular No. 120/2005/TT-BTC.

1.2 Other cases (paying annual land lease fees or without recording the principle of adjusting the unit price of land lease fees in the Investment License; Land Lease Decision issued by competent state agencies to investors or Land Lease Contract signed between state authorities and the lessee) shall adjust the unit price of land leasing according to the provisions of Clause 2 Article 9 of Decree No. 142/2005/NĐ-CP as follows:

- Other cases not falling within the scope of conditions prescribed in Item 1.1 above include: projects paying annual land lease fees where the Investment License or Land Lease Decision or Land Lease Contract issued (signed) does not specify the leasing unit price or the principle of adjusting the unit price of land lease fees, shall adjust the unit price of leasing according to the provisions of Clause 2 Article 9 of Decree No. 142/2005/NĐ-CP.

- The rental price of land and water surface for adjustment shall be implemented according to the provisions of Articles 4, 5, and 6 of Decree No. 142/2005/NĐ-CP and the guidance at Sections I, II, III Part B Circular No. 120/2005/TT-BTC.”

IV. REPLACE SECTION VI PART B AS FOLLOWS:

“VI. Transition from land allocation to land leasing for households and individuals as prescribed in Article 10 of Decree No. 142/2005/NĐ-CP shall be specifically guided as follows:

1. Households and individuals who have been allocated agricultural land within the limit of agricultural land use by the State, now permitted by competent state authorities to change the purpose of land use to non-agricultural production and business purposes and choose the form of land leasing shall be allowed to deduct the value of the right to use agricultural land from the land lease fee payable; the deduction amount shall not exceed the land lease fee payable.

The value of the right to use agricultural land to be deducted from the land lease fee payable shall be calculated based on the area of land subject to payment of lease fees, according to the land price of the type of agricultural land issued and applied by the provincial People's Committee at the time of transition from land allocation to land leasing according to the decision of the competent state authority.

2. Households and individuals who have been allocated land with payment of land use fees or received transfer of land use rights from legitimate land users, now transitioning to land leasing shall be allowed to deduct the value of the land use rights granted or received through transfer from the land lease fee payable; the deduction amount shall not exceed the land lease fee payable.

The value of the land use rights granted or received through transfer to be deducted from the land lease fee payable shall be calculated based on the area of land subject to payment of lease fees, according to the price of the type of land granted or received through transfer issued and applied by the provincial People's Committee at the time of transition to land leasing according to the decision of the competent state authority."

V. REPLACE SECTION VII PART B AS FOLLOWS:

“VII. Transition from land allocation to land leasing for organizations as prescribed in Article 11 of Decree No. 142/2005/NĐ-CP; some contents in Clause 1, Clause 3 are guided as follows:

Organizations that have been allocated land with payment of land use fees or received legitimate transfer of land use rights from others where the land use fees paid or the transfer payments made do not originate from the state budget, now transitioning to land leasing shall deduct the value of the land use rights granted or received through transfer from the land lease fee payable, calculated based on the area of land subject to payment of lease fees, according to the price of the type of land granted or received through transfer issued and applied by the provincial People's Committee at the time of transition to land leasing according to the decision of the competent state authority; the deduction amount shall not exceed the land lease fee payable.

Cases eligible for deduction from the land lease fee payable as prescribed in Section VI, Section VII of Circular No. 120/2005/TT-BTC (now amended in Section IV, Section V of this Circular), tax authorities shall gradually deduct from the Notice of Annual Land Lease Fee Payment but not exceeding the land lease fee payable as stipulated in Article 10, Article 11 of Decree No. 142/2005/NĐ-CP. Lessees must continue to pay after the full deduction (if still within the lease term). Cases that have determined "Number of Years Remaining to Pay Land Lease Fees" according to the guidance at Point 2 Section VII Part B of Circular No. 120/2005/TT-BTC shall now implement the "gradual deduction" as directed above.”

VI. REPLACE SECTION I PART C AS FOLLOWS:

“I- Principles of exemption and reduction of land lease fees and water surface lease fees as prescribed in Article 13 of Decree No. 142/2005/NĐ-CP; Clause 5 is specifically guided as follows:

1. For projects currently operating that have been granted tax exemptions or reductions on land rent and water surface lease fees but with lower preferential levels (lower exemptions or reductions) than those stipulated in Articles 14 and 15 of Decree No. 142/2005/NĐ-CP, the exemption or reduction shall be implemented according to the provisions of Articles 14 and 15 of Decree No. 142/2005/NĐ-CP for the remaining period of exemption or reduction. The remaining period of exemption or reduction is calculated based on the time specified in Articles 14 and 15 of Decree No. 142/2005/NĐ-CP minus the time already exempted or reduced before Decree No. 142/2005/NĐ-CP took effect.

A project currently operating that has been granted preferential treatment is a project that has been issued an Investment Incentive Certificate or recorded in the Investment License or has had a decision on exemption or reduction made by the tax authority according to the law before Decree No. 142/2005/NĐ-CP took effect. In cases where the date for calculating land rent is before the effective date of Decree No. 142/2005/NĐ-CP, but from the date Decree No. 142/2005/NĐ-CP took effect, the land lessee newly applies for exemption or reduction, the provisions on exemption or reduction and other provisions according to Decree No. 142/2005/NĐ-CP shall apply.

2. For projects currently operating and paying annual land rent, which were not eligible for exemption or reduction before Decree No. 142/2005/NĐ-CP took effect, if they continue to pay land rent according to Decree No. 142/2005/NĐ-CP and fall under the category eligible for exemption or reduction on land rent and water surface lease fees as stipulated in Articles 14 and 15 of Decree No. 142/2005/NĐ-CP, they shall be entitled to such exemption or reduction for the remaining preferential period.

3. In cases where individuals leasing land and paying annual land rent before Decree No. 142/2005/NĐ-CP took effect now initiate investment projects on leased land and fall under the category eligible for exemption or reduction as stipulated in Articles 14 and 15 of Decree No. 142/2005/NĐ-CP, they shall be entitled to such exemption or reduction according to this Decree.

VII. ADD ONE NEW POINT (POINT 3); AMEND AND REPLACE POINT 3 WITH POINT 4 OF SUBSECTION II PART C AS FOLLOWS:

“3. Point 3 is further guided as follows:

In cases where the lessee uses the land for agricultural production (planting perennial crops) according to a project approved by the competent authority, the construction period for establishing orchards exempted from land rent shall be applied according to the planting and care procedures for perennial crops prescribed by the Ministry of Agriculture and Rural Development.

4. Exempt land rent until the year 2010 for the area of agricultural land within the limit prescribed by law for each region for households engaged in agriculture, members of agricultural cooperatives, and cooperative members who have taken over the assignment of land from enterprises or agricultural cooperatives and must now lease the land and sign a land lease contract with the competent state agency according to the Land Law.”

VIII. REPLACE POINT 2, POINT 3 OF SUBSECTION III PART C AS FOLLOWS:

“2. Point 2 stipulates that for land leased for agricultural, forestry, aquaculture, or salt-making purposes, if damaged by natural disasters or fire, then:

- If the damage is less than 40% of the yield, the land rent may be reduced according to the corresponding percentage of the damage.

- If the damage is 40% or more, the land rent for the affected year may be waived.

The percentage of yield loss is based on the harvest yield of the previous normal production season or the most recent normal production season prior to the damage.

3. Reduce 50% of the annual land rent until the year 2010 for the area of agricultural land of entities not eligible for land rent exemption as stipulated in Point 3 of Subsection II, Point 3 of Subsection III Part C of Circular No. 120/2005/TT-BTC (now amended at Point 4 of Subsection VII, Point 3 of Subsection VIII of this Circular) and the area of agricultural land exceeding the limit prescribed by law for households engaged in agriculture, members of agricultural cooperatives, and other agricultural producers.”

IX. ADD SUBSECTION IV PART C AS FOLLOWS:

“IV. Procedures and formalities for exemption or reduction of land rent and water surface lease fees (hereinafter referred to collectively as land rent) for the cases stipulated in Articles 14 and 15 of Decree No. 142/2005/NĐ-CP shall be carried out as follows:

1. Documents for exemption or reduction of land rent:

Organizations, households, individuals; overseas Vietnamese, foreign organizations, and individuals leasing land from the State (hereinafter referred to collectively as the lessee) shall provide the following documents to the Tax Authority in the first year of exemption or reduction:

1.1 Application for exemption or reduction of land rent, clearly stating: the area of leased land (including the area within the limit and the excess area - for cases stipulated in Point 3 of Subsection II, Point 3 of Subsection III Part C of Circular No. 120/2005/TT-BTC now amended at Point 4 of Subsection VII, Point 3 of Subsection VIII of this Circular); the lease term; reasons for exemption or reduction and the duration of the exemption or reduction of land rent.

Specifically, for cases eligible for exemption of land rent as stipulated in Clause 6 of Article 14 of Decree No. 142/2005/NĐ-CP:

a) For projects encountering difficulties and having to temporarily suspend construction:

- Within seven (07) days from the date of suspension of construction, the lessee must submit to the tax authority: An application for exemption of land rent during the temporary suspension of construction, clearly stating the reasons and duration of the suspension, accompanied by confirmation from the investment permit issuing authority or business registration authority;

- Supplementary contract for construction or Minutes (regarding the temporary suspension of construction) established between the contracting party and the contractor, specifying the suspension of the construction contract due to: Faults of both parties; mutual agreement; or force majeure as defined in Clause 6.1 of Subsection II Part II of Circular No. 02/2005/TT-BXD dated February 25, 2005 of the Ministry of Construction guiding construction contracts in construction activities.

b) For projects encountering difficulties that must temporarily cease operations: the land lessee shall submit to the tax authority no later than seven (07) days from the date of temporary cessation of operations: an application for exemption from land rent during the period of temporary cessation of operations, confirmed by the investment permit issuing agency or business registration agency;

1.2 The investment project has been approved by the competent authority.

1.3 The decision on land lease issued by the competent authority in accordance with the laws on land; the Land Lease Contract (and the Contract or document on the assignment of agricultural land between enterprises, agricultural production cooperatives, and farm members, cooperative members - in cases where exemptions or reductions are provided for in Point 3, Section II, Point 3, Section III, Part C of Circular No. 120/2005/TT-BTC which has been amended at Point 4, Section VII, Point 3, Section VIII of this Circular);

1.4 Investment Permit or Business Registration Certificate (applicable to the cases stipulated in Clauses 1, 2, 3, 4, 5, 6 of Article 14 and Clause 1, 2, 3 of Article 15 of Decree No. 142/2005/NĐ-CP);

1.5 Investment Certificate issued by the competent state agency in cases where the investment project must be recorded in the Investment Certificate by the state investment management agency or the project falls under the category not required to register investment but the investor requests confirmation of investment incentives in accordance with Decree No. 108/2006/NĐ-CP dated September 22, 2006 of the Government detailing and guiding the implementation of certain provisions of the Investment Law (applicable to the cases stipulated in Clause 1, Clause 4 of Article 14 of Decree No. 142/2005/NĐ-CP);

1.6 - In cases of exemption as prescribed in Clause 3 of Article 14 of Decree No. 142/2005/NĐ-CP, submission of the dossier is divided into two stages:

a) During the construction phase, starting from the time when land rent must be calculated according to Clause 2 of Article 7 of Decree No. 142/2005/NĐ-CP:

- Construction Permit issued by the competent authority;

- Construction Contract;

- Field handover record;

b) After completion and handover for operation of the project or part thereof:

The acceptance and handover record of the completed project or part thereof for operation is established between the project owner and the construction contractor.

1.7 Agreement, or agreement, or commitment of the Government of Vietnam with international organizations regarding exemption or reduction of land rent; or Confirmation Letter of the Ministry of Foreign Affairs or local foreign affairs agencies authorized by the Ministry of Foreign Affairs (applicable to the provisions stipulated in Clause 7 of Article 14 and Clause 4 of Article 15 of Decree No. 142/2005/NĐ-CP).

1.8 Damage assessment record in accordance with the procedures prescribed in Circular No. 89/TC-TCT dated November 9, 1993 guiding the implementation of Decree No. 74/CP on agricultural land use tax or damage assessment record due to natural disasters, fire, or unforeseen accidents confirmed by the People's Committee, Ward, Town, or relevant state management agencies (applicable to the cases stipulated in Clause 2 of Article 15 of Decree No. 142/2005/NĐ-CP).

1.9 Damage assessment record due to natural disasters, fire, or unforeseen accidents confirmed by the People's Committee, Ward, Town, or relevant state management agencies (applicable to the cases stipulated in Clause 3 of Article 15 of Decree No. 142/2005/NĐ-CP).

1.10 Decision of the Prime Minister (applicable to the cases stipulated in Clause 8 of Article 14 and Clause 5 of Article 15 of Decree No. 142/2005/NĐ-CP).

1.11 Land Rent Declaration Form No. 01-05/TTĐ "Land Rent Declaration" issued together with Joint Circular No. 30/2005/TTLT/BTC-BTNMT dated April 18, 2005 of the Ministry of Finance and the Ministry of Natural Resources and Environment guiding the circulation of dossiers of land users fulfilling financial obligations (hereinafter referred to as Circular No. 30/2005/TTLT/BTC-BTNMT).

The land lessee who falls under the exemption or reduction of land rent as prescribed in the relevant Articles and Clauses shall provide the corresponding documents as stipulated above. The documents mentioned in Sub-items 1.1, 1.8, 1.9, and 1.11 of this point are original copies; the documents mentioned in Sub-items 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, and 1.10 of this point are certified copies with the seal of a notary public or the signature and full name of the head of the business establishment (land lessee) confirming the true copy.

2 Submission of Dossier for Exemption or Reduction of Land Rent:

The land lessee submits the dossier for exemption or reduction of land rent simultaneously with the declaration and payment of the first year's land rent at the Land Registration Office or the Department of Natural Resources and Environment. If the request for exemption or reduction of land rent is not submitted simultaneously with the declaration and payment of land rent, the "Exemption or Reduction of Land Rent Dossier" shall be submitted to the direct tax collection agency.

3 Notification and Decision on Exemption or Reduction of Land Rent:

3.1 For cases stipulated in Clause 1, 2, 4, 5, 6, 7, 8 of Article 14 and Clause 1, 2 of Article 15 of Decree No. 142/2005/NĐ-CP, Point 3, Section II and Point 3, Section III, Part C of Circular No. 120/2005/TT-BTC (now amended at Point 4, Section VII, Point 3, Section VIII of this Circular), based on the "Exemption or Reduction of Land Rent Dossier," the Tax Authority shall inspect and issue a decision on exemption or reduction in accordance with the authority prescribed in Article 16 of Decree No. 142/2005/NĐ-CP.

The decision on exemption or reduction of land rent must clearly state: the reason for exemption or reduction, the duration of land lease, the period of exemption or reduction of land rent, and the amount of land rent exempted or reduced according to the land rent rate specified by the Provincial People's Committee or the People's Committee of a centrally administered city at the time of issuance of the decision on exemption or reduction of land rent.

3.2 For cases of exemption from land rent as prescribed in Clause 3 of Article 14 of Decree No. 142/2005/NĐ-CP:

a) In the first year of the exemption period, based on the "Exemption or Reduction of Land Rent Dossier," the Tax Authority shall inspect and issue a provisional exemption notification in accordance with the model attached to this Circular (Model No. 01-07/TMTTĐ). The provisional exemption notification must clearly state: the reason for exemption, the provisional exemption period (consistent with the construction period stated in the Construction Contract and construction progress).

In the event that difficulties arise during construction causing the project to temporarily halt, the land lessee must submit a request (and supporting documents) as prescribed in item 1.1(a) point 1 Section of this Article. Based on the submitted documents, the Tax Authority shall issue a notice extending the period for temporary exemption from land lease fees during the suspension of construction.

b) After the completion and handover for operation/use of the project or its components, the land lessee must supplement the documents as stipulated in item 1.6(b) point 1 Section of this Article; based on these documents, the Tax Authority shall settle the actual amount exempted according to the actual situation and issue a decision on exemption and reduction of land lease fees in accordance with the authority prescribed in Article 16 of Decree No. 142/2005/NĐ-CP.

The decision on exemption from land lease fees must clearly state: the reason for exemption, the duration of exemption, and the amount of land lease fees exempted as settled above.

3.3 For cases of reduction in land lease fees as prescribed in Clause 3 of Article 15 of Decree No. 142/2005/NĐ-CP:

Based on the "Record of Damage Status and Degree" prescribed in item 1.9 point 1 Section of this Article and other relevant documents as prescribed, the tax authority shall issue a notice temporarily reducing 50% of the land lease fees during the period of suspended production and business operations (PBO).

Within no more than seven working days from the date of resuming PBO activities, the land lessee must submit a written notification to the tax authority, clearly stating the period of suspended operations, the start date, and the end date of the suspension period, and bear legal responsibility for the contents of the notification.

Based on this notification, depending on specific circumstances, the tax authority may conduct on-site inspections at the PBO facility, and issue a decision to reduce land lease fees within its authority as prescribed.

3.4 Time limit for processing exemptions/reductions in land lease fees: The tax authority shall issue a notice of temporary exemption from land lease fees within ten days from the date of receipt of complete and valid documents as prescribed in this Circular.

Within thirty days from the date of receipt of complete and valid documents as prescribed in this Circular, the tax authority shall issue a decision on exemption/reduction of land lease fees or notify the land lessee of the reasons why they do not qualify for such exemptions/reductions.

The decision on exemption/reduction of land lease fees shall be implemented according to the model (Model No. 04-07/QĐTTĐ) issued together with this Circular.

4. Rotation of files and delivery of notifications/decisions on exemption/reduction of land lease fees:

4.1 In cases where the land lessee submits applications for exemption/reduction of land lease fees to the Natural Resources and Environment Department, the rotation of files and delivery of notifications/decisions on exemption/reduction of land lease fees shall be carried out in accordance with Circular No. 30/2005/TTLT/BTC-BTNMT.

4.2 In cases where the land lessee submits applications for exemption/reduction of land lease fees to the Tax Authority, the Tax Authority shall be responsible for delivering notifications/decisions on exemption/reduction of land lease fees to the land lessee.

When receiving notifications/decisions on exemption/reduction of land lease fees, the land lessee must clearly record the date and month, sign, and write their full name in the logbook of the issuing authority.

X. REPLACE SECTION II PART D AS FOLLOWS:

"II. The tax authority directly managing the determination of land lease fees and water surface lease fees payable by the lessee shall be carried out in accordance with Article 18 of Decree No. 142/2005/NĐ-CP; paragraph b of Clause 1 of Article 18 of Decree No. 142/2005/NĐ-CP is hereby clarified as follows:

The year for payment of land lease fees and water surface lease fees is calculated according to the Gregorian calendar, from January 1st to December 31st each year. In the case of the first year of leasing land or water surface, or the final year of leasing land or water surface which does not last a full twelve months, the annual lease fee for the first year and the final year shall be calculated based on the number of months leased.

In cases where the leasing period of the first month or the final month of leasing does not cover a full month:

- If the number of leased days is fifteen days or more but less than a full month (>= 15 days), it shall be considered as a full month.

- If the number of leased days is less than fifteen days (< 15 days), no lease fee shall be charged."

XI. ADD AN ADDITIONAL POINT (POINT 4) TO SECTION III PART D AS FOLLOWS:

"4. Summary and reporting of land lease fee revenue:

4.1 The Tax Authority directly collecting land lease fees must establish a land lease fee collection ledger at the local level, including:

- An annual land lease fee collection ledger (general ledger) according to the model issued together with this Circular (Model No. 02-07/SBTTĐ).

- A ledger for tracking and updating land lease fee revenue for each individual lessee according to the model issued together with this Circular (Model No. 03-07/STTTĐ).

4.2 Regularly compile the results of land lease fee collection in the area monthly to report to the higher-level Tax Authority in accordance with the reporting system.

4.3 Before April 30th each year, the Provincial Tax Office shall submit to the General Department of Taxation a settlement report on land lease fee revenue of the previous year according to the model issued together with this Circular (Model No. 05-07/QTTTĐ attached) and a report on the planned land lease fee revenue (according to the general ledger model prescribed in point 4.1)."

XII. AMEND POINT 2 OF SECTION VI PART D AS FOLLOWS:

"Repeal the third bullet point of point 2 of Section VI Part D."

XIII. EFFECTIVE DATE.

This Circular shall take effect fifteen days after its publication in the Official Gazette. Provisions in Circular No. 120/2005/TT-BTC dated December 30, 2005, of the Ministry of Finance, which have not been amended or supplemented in this Circular, shall continue to be effective.

Any previous guiding documents of the Ministry of Finance that conflict with this Circular shall be repealed.

During the implementation of this Circular, if there are any issues, organizations and individuals are requested to promptly reflect them to the Ministry of Finance for further study and supplementary guidance./.