Circular No. 192/2009/TT-BTC guides the pilot payment of land use fee for new urban area projects, housing projects, and industrial zone technical infrastructure projects as stipulated in Government Resolution No. 33/2008/NQ-CP dated December 31, 2008.

CIRCULAR

Guidelines for piloting the payment of land use fees for new urban area projects

new urban area, housing projects, technical infrastructure projects in industrial zones

pursuant to Resolution No. 33/2008/NQ-CP dated December 31, 2008 of the Government

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Pursuant to Resolution No. 33/2008/NQ-CP dated December 31, 2008 of the Government on implementing pilot administrative procedures in construction investment for new urban area projects, housing projects, and technical infrastructure projects in industrial zones;

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

Pursuant to Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on collecting land use fees;

To implement the pilot collection and payment of land use fees for investment projects as stipulated in Clause 3, Article 1 of Resolution No. 33/2008/NQ-CP dated December 31, 2008 of the Government, the Ministry of Finance issues the following guidelines:

Article 1. Scope and Applicability

1. These Circulars apply to primary investors granted land by the State for use or change of land use purpose to carry out the following construction investment projects:

1.1. New urban area construction investment projects as prescribed in Decree No. 02/2006/NĐ-CP dated January 5, 2006 of the Government on the issuance of regulations for new urban areas (applicable only to the portion of land for constructing residential buildings and other construction works permitted by law to raise capital from customers).

1.2. Construction projects for selling or leasing houses (including high-rise construction projects with multiple uses, including residential purposes).

1.3. Investment and business development projects for industrial zone infrastructure as prescribed in Article 90 of the Land Law 2003 (excluding projects where the State leases land to investors).

2. For primary investors who are overseas Vietnamese citizens or foreign organizations and individuals implementing housing construction projects for sale or lease, which are subject to paying land rental fees in one lump sum for the entire rental period as stipulated in Article 32 of Decree No. 84/2007/NĐ-CP dated May 25, 2007 of the Government, shall pay land rental fees according to the provisions of this Circular.

Article 2. Implementation of the collection and payment of land use fees as stipulated in Clause 3, Article 1 of Resolution No. 33/2008/NQ-CP of the Government:

1. Primary investors of new urban area projects, housing construction projects, and investment and business development projects for industrial zone infrastructure as prescribed in Article 1 of these Circulars (hereinafter referred to as investors) may pay land use fees according to the project implementation progress approved by competent authorities in accordance with laws on investment management and construction:

1.1. Based on the implementation progress recorded in the investment project approved by competent authorities, the investor must register in writing (accompanied by the investment project approval documents) with the financial authority and local tax authority (where the land is located) the project implementation progress plan as the basis for collecting and paying land use fees.

a) In case the investor needs to adjust the project implementation progress, within thirty working days from the date of the competent authority's decision to adjust the project implementation progress, the investor must re-register with the financial authority and local tax authority the adjusted project implementation progress plan in accordance with laws on investment and construction.

b) In case the actual project implementation progress is earlier than the registered project implementation progress plan with the financial authority and local tax authority, within fifteen working days, the investor must report in writing to the financial authority and local tax authority to calculate and collect land use fees based on the actual project implementation progress.

c) For new urban area projects, industrial zone projects, and housing projects with land occupation scale equivalent to or larger than that specified in Decree No. 02/2006/NĐ-CP of the Government, if the project implementation progress is divided into several phases corresponding to specific land areas of each phase, each phase of the project will be treated as an independent sub-project, and the determination and payment of land use fees for each phase of the project (sub-project) will be carried out according to the principles stipulated in Points 1.2 and 1.3 of Clause 1 of this Article.

d) In case the investor delays the project implementation progress after receiving part or all of the land but before commencing work, for the delayed period approved by the competent authority, the investor must pay the State an amount equivalent to the annual land rental fee rate set by the provincial People's Committee for the delayed period. The amount of land rental fee payable for the delayed period (if any) will be determined by the financial authority in accordance with laws on land rental fee collection and transferred to the tax authority for collection together with the land use fee.

1.2. The financial authority, based on the land use fee collection policy prescribed by the Government, will take the lead in coordinating with relevant agencies at the local level to determine and submit to the provincial People's Committee for decision the land use fee collection rate and land price according to the Government's policy and regulations at the time of land allocation; in cases where the actual land handover date does not match the date recorded in the land allocation decision, the land use fee will be determined according to the policy and land price at the actual land handover date.

1.3. The tax authority, based on the land use fee collection rate determined by the financial authority and the project implementation progress (registered by the investor), will issue a notice for land use fee payment in accordance with current regulations. The investor's payment of land use fees will be divided into two (2) installments as follows:

a) First installment, seventy percent (70%) of the land use fee determined under Point 1.2, Clause 1 of this Article, collected when the investor is allowed to raise capital from customers according to the Law on Housing, the Law on Real Estate Business, and the Land Law; specifically as follows:

- For housing construction projects, the time for submitting the first land use fee payment is when the primary investor has constructed the foundation of the project according to the progress specified in Point 1.1 Clause 1 of this Article (meeting the conditions to mobilize capital from customers). In cases where there are two or more housing constructions within the planned land area, the primary investor must submit the first land use fee payment within thirty days from the date of mobilizing capital from customers for the first housing construction project, covering the entire area subject to land use fee payment.

- For industrial infrastructure investment and construction projects, the time for submitting the first land use fee payment is when the primary investor has constructed the technical infrastructure of the project according to the content and progress specified in Point 1.1 Clause 1 of this Article (meeting the conditions to mobilize capital from customers). If, after constructing the technical infrastructure (meeting the conditions to mobilize capital from customers), the primary investor transfers more than seventy percent of the land area subject to land use fee payment that has been developed with technical infrastructure to secondary investors, then within thirty days from the date of transferring the portion exceeding seventy percent, the primary investor must pay one hundred percent of the land use fee into the state budget.

- For new urban area development projects planned for multiple uses (residential construction area, service facilities, technical infrastructure systems, social infrastructure), the time for submitting the first land use fee payment is when the primary investor has constructed the technical infrastructure serving the project (meeting the conditions to mobilize capital from customers). If, after constructing the technical infrastructure (meeting the conditions to mobilize capital from customers), the primary investor transfers more than seventy percent of the land area subject to land use fee payment that has been developed with technical infrastructure to secondary investors, then within thirty days from the date of transferring the portion exceeding seventy percent, the primary investor must pay one hundred percent of the land use fee into the state budget. In cases where the primary investor directly invests in mixed-use construction projects including residential buildings and other service facilities within the new urban area as permitted by law to mobilize capital from customers, the calculation and payment of the land use fee for this area shall be carried out as stipulated for housing construction projects under Clause 1 of this Article.

In cases where at the time of the first land use fee payment, the land price set and announced by the provincial People's Committee varies by twenty percent or more compared to the land price set and announced by the provincial People's Committee at the time of the land allocation decision (or actual land handover), the financial agency must reassess the land price based on the actual market transfer price under normal conditions to recalculate seventy percent of the land use fee payable for the first submission and transfer it to the tax agency to issue a Notice of Land Use Fee Collection.

b) The second payment, collecting the remaining thirty percent of the land use fee after the completion and handover of the project for use, but not exceeding eighteen months from the date of the first land use fee payment (for housing construction projects); after twenty-four months from the date of the first land use fee payment (for new urban area development projects and industrial infrastructure investment and construction projects).

In cases where at the time of the second land use fee payment, the land price set and announced by the provincial People's Committee varies by twenty percent or more compared to the land price set and announced by the provincial People's Committee at the time of the land allocation decision (or actual land handover), the financial agency must reassess the land price based on the actual market transfer price under normal conditions to recalculate the remaining thirty percent of the land use fee payable and transfer it to the tax agency to issue a Notice of Land Use Fee Collection.

(Example: Investor A was decided by the People's Committee of Province X to allocate 40,000 square meters of land with land use fee payment for implementing a housing construction project in the locality on March 1, 2009; the actual land handover date was December 1, 2009. According to the project implementation schedule, Investor A must submit the first land use fee payment by October 2010 and the second land use fee payment by May 2012.

Assuming the land price in the project area set and announced by the provincial People's Committee on January 1, 2009 was 12 million VND/square meter, on October 1, 2010 was 13 million VND/square meter, and on May 1, 2012 was 16 million VND/square meter; the reassessed land price based on the actual market price at the time of actual land handover (December 1, 2009) was 15 million VND/square meter, and at the time of May 2012 was 20 million VND/square meter.

Based on the provisions of this Circular, the Tax Department determines and announces the amount to be paid as follows:

+ Notice of First Payment:

Since the fluctuation rate of the land price set and announced by the provincial People's Committee at the time of the first land use fee payment did not increase by twenty percent (13/12 million VND = 108.3%), the land use fee collection price remains unchanged, specifically, the amount to be notified for the first payment is: 40,000 square meters x 15 million VND/square meter x 70% = 420,000 million VND.

+ Notice of Second Payment:

Since the fluctuation rate of the land price set and announced by the provincial People's Committee at the time of the second land use fee payment increased by over twenty percent (16/12 million VND = 133.3%), the Department of Finance must reassess the price (assuming the reassessed price is 20 million VND/square meter; thus, the amount to be notified for payment is 40,000 square meters x 20 million VND/square meter x 30% = 240,000 million VND.

The total land use fee to be paid for both payments is: 420,000 million VND + 240,000 million VND = 660,000 million VND).

In the event that during the implementation of the project, the Project Investor has constructed technical infrastructure or has built the foundation of the construction work (meeting the conditions for mobilizing capital from customers) earlier than the planned schedule registered (or re-registered) with the Financial Authority and Tax Authority but fails to report and declare to be counted and paid land use fee to the state budget in time, then the first-level Project Investor must pay a fine of 0.05% per day on the amount of land use fee due from the date when the investment project meets the conditions for mobilizing capital from customers.

1.4. In the case where the first-level Project Investor wishes to pay once (100%) the land use fee after the project meets the conditions for being allowed to mobilize capital from customers according to the law, it shall be permitted to make a single payment as stipulated in paragraph a point 1.3 Clause 1 of this Article at a rate of 100% of the land use fee.

Within three months from the date the project meets the conditions for mobilizing capital from customers, the first-level Project Investor must fully pay the land use fee for the allocated land area subject to payment into the state budget.

1.5. In the case where the first-level Project Investor advances funds for land compensation and support according to the approved plan by the competent authority, they are entitled to deduct the amount of land compensation and support from the land use fee payable according to the laws on compensation, support, and resettlement and the laws on land use fee collection.

The deduction of land compensation and support shall be immediately applied to the first installment of the land use fee; if the amount of compensation and support exceeds the first installment of the land use fee, the excess will be deducted from the second installment of the land use fee.

2. For land that has been cleared:

2.1. In the case where the Project Investor is assigned land by the Provincial People's Committee through public auction of land use rights, they must pay the land use fee within the deadline specified in the Auction Regulation approved by the competent authority, but the maximum payment period shall not exceed three months from the date of the decision approving the auction results issued by the competent state agency according to the law on public auction of land use rights.

2.2. In the case where the Project Investor is assigned land by the Provincial People's Committee without going through the public auction of land use rights, within three months from the date of the decision assigning land by the competent state agency, the investor must fully pay the land use fee for the allocated land area into the state budget.

Article 3. Implementation:

1. This Circular takes effect 45 days from the date of signature.

2. For projects that have been determined and notified about the payment of land use fee by the competent state agency before the effective date of this Circular but the first-level Project Investor has not yet paid into the state budget, the following shall apply:

2.1. In the case where the first-level Project Investor chooses to pay the land use fee according to the notification of the competent state agency, they shall make the payment according to the amount notified and pay the late payment penalty according to the law on tax management.

2.2. In the case where the first-level Project Investor chooses to pay the land use fee according to Resolution No. 33/2008/NQ-CP dated December 31, 2008 of the Government, they must recalculate the land use fee payable and implement the payment of the land use fee according to the guidance in this Circular.

3. In the case where the competent state agency has issued a notification on the payment of land use fee and the investor has already made the payment into the state budget, there will be no retroactive refund or reassessment of the payment of land use fee according to this Circular.

During the implementation process, if any difficulties arise, please promptly reflect them to the Ministry of Finance for research and resolution.