Decree No. 198/2004/ND-CP on land use fee collection

DECREE OF THE GOVERNMENT

Regarding the collection of land use fee

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Land Law dated November 26, 2003;

At the proposal of the Minister of Finance,

DECREE:

PART I
General Provisions

Article 1. Scope of application

This Decree stipulates the collection of land use fee when:

1. The State grants land with payment of land use fee;

2. Changing the purpose of land use;

3. Converting from lease to grant of land with payment of land use fee;

4. Issuing certificates of land use rights to entities required to pay land use fee as prescribed in Article 2 of this Decree;

5. Establishing industrial zones, high-tech zones, economic zones.

Article 2. Subjects required to pay land use fee

1. Individuals or organizations receiving land from the State for the following purposes:

a) Households and individuals receiving residential land;

b) Economic organizations receiving land for construction of housing for sale or rent;

c) Economic organizations, households, and individuals in Vietnam receiving land for construction of production and business premises;

d) Economic organizations receiving land for construction of infrastructure for transfer or lease;

đ) Economic organizations, households, and individuals receiving land for construction of public works with commercial purposes as prescribed by the Government;

e) Economic organizations receiving land for agricultural, forestry, aquaculture, or salt production;

g) Overseas Vietnamese receiving land for investment projects.

2. Individuals currently using land in the following cases:

a) Agricultural land or non-agricultural land granted without payment of land use fee or leased land, now permitted by competent state authorities to be converted to residential land or non-agricultural land with payment of land use fee, or land for construction of public works with commercial purposes (socialization) in education, healthcare, culture, sports fields;

b) Agricultural land granted with payment of land use fee, now converted to non-agricultural land with payment of land use fee;

c) Non-agricultural land (excluding residential land) granted with payment of land use fee, now converted to residential land.

3. Households and individuals currently using residential land that has been used since October 15, 1993 until the issuance of certificates of land use rights, without payment of land use fee, now receiving certificates of land use rights from competent state authorities.

4. Other cases as prescribed by the Government.

Article 3. Subjects not required to pay land use fee

1. Individuals receiving land from the State without payment of land use fee as prescribed in Article 33 of the Land Law 2003.

2. Individuals leasing land from the State and required to pay land lease fee as prescribed in Article 35 of the Land Law 2003.

3. Individuals constructing shared infrastructure in industrial zones according to approved projects.

4. Households and individuals currently using land, when receiving certificates of land use rights in the following cases:

a) Land used stably, confirmed by the People's Committee of communes, wards, towns (hereinafter referred to as the People's Committee of communes) as having no disputes, falling under one of the cases prescribed in Clause 1, Clause 2, Clause 3, Clause 4 of Article 50 of the Land Law 2003;

b) Households and individuals receiving residential land from competent state authorities before October 15, 1993, as prescribed by laws on land.

5. Households and individuals using residential land area in cases where there are gardens or ponds, when receiving certificates of land use rights as prescribed in Article 87 of the Land Law 2003 and Article 45 of Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on implementing the Land Law.

6. Economic organizations receiving contributions or transfers of land use rights from other organizations, households, or individuals through monetary means not derived from the state budget, now receiving certificates of land use rights.

Article 4. Basis for calculating land use fee

The basis for calculating land use fee is the area of land, land price, and duration of land use.

1. The area of land for calculating land use fee is the area of land granted by the State, permitted to change its purpose of use, converted from lease to grant with payment of land use fee, or issued certificates of land use rights.

2. The land price for calculating land use fee is the land price according to the purpose of use at the time of granting land, determined by the People's Committee of provinces (hereinafter referred to as the People's Committee of provinces) as prescribed by the Government.

3. In cases of land auction or bidding for projects using land, the land price for calculating land use fee is the winning bid price.

4. The duration of land use is determined based on decisions on land grant, decisions on permission to change the purpose of land use, decisions on extension of land use period, or certificates of land use rights.

Chapter II
Specific Provisions

Article 5. Collection of land use fee when the State grants land

1. When granting land through auction of land use rights or bidding for projects using land, the land use fee is calculated based on the provisions of Clause 1 and Clause 3 of Article 4 of this Decree.

2. When granting land for long-term stable use through decisions of competent state authorities without auction of land use rights, the land use fee is calculated based on the provisions of Clause 1 and Clause 2 of Article 4 of this Decree.

3. When granting land for use with a term through decisions of competent state authorities:

a) Projects with a land use term of 70 years, the land use fee is calculated based on the provisions of Clause 1 and Clause 2 of Article 4 of this Decree;

b) Projects with a land use term less than 70 years, the land use fee is reduced by 1.2% of the amount payable for 70 years for each year not granted land use.

4. In cases where the individual receiving land compensates and supports individuals whose land is being reclaimed according to Article 3 of Decree No. 197/2004/NĐ-CP dated December 3, 2004 of the Government on compensation, support, and resettlement when the State reclaims land, the amount paid for compensation and support for land can be deducted from the land use fee payable, but the deduction amount shall not exceed the land use fee payable.

Article 6. Collection of land use fee when changing the purpose of land use

1. For economic organizations:

a) When transferring from agricultural land or non-agricultural land allocated without payment of land use fee to land allocated for stable long-term use with payment of land use fee, the land use fee shall be paid according to the provisions of Clause 2, Article 5 of this Decree;

b) When transferring from agricultural land or non-agricultural land allocated without payment of land use fee to land allocated for use with a term, the land use fee shall be paid according to the provisions of Clause 3, Article 5 of this Decree.

2. For households and individuals:

a) When transferring from garden or pond land within the same plot containing residential buildings in residential areas that have not been recognized as residential land to residential land, the land use fee shall be fifty percent of the difference between the land use fee calculated based on the price of residential land and the land use fee calculated based on the price of agricultural land;

b) When transferring from agricultural land allocated by the State without payment of land use fee to residential land, the land use fee shall be the difference between the land use fee calculated based on the price of residential land and the land use fee calculated based on the price of agricultural land;

c) When changing the purpose of land use from land acquired through transfer from a lawful land user to residential land, the land use fee shall be paid as follows:

Land acquired through transfer with its origin being agricultural land, the land use fee shall be the difference between the land use fee calculated based on the price of residential land and the land use fee calculated based on the price of agricultural land;

Land acquired through transfer with its origin being non-agricultural land (not residential land), the land use fee shall be the difference between the land use fee calculated based on the price of residential land and the land use fee calculated based on the price of non-agricultural land.

3. When changing the purpose of land use from residential land allocated for stable long-term use to land for production and business purposes, no land use fee shall be collected.

4. When changing the purpose of land use from land allocated with a term to residential land (for stable long-term use), the land use fee shall be calculated based on the price of residential land minus the land use fee already paid based on the price of the type of land allocated with a term.

Article 7. Collecting land use fee when transferring from lease land to land allocation with payment of land use fee

1. Allocating land for stable long-term use:

When transferring from lease land to land allocation with payment of land use fee for stable long-term use, the land use fee shall be paid according to the provisions of Clause 2, Article 5 of this Decree.

2. Allocating land for use with a term:

When transferring from lease land to land allocation with payment of land use fee for use with a term, the land use fee shall be paid according to the provisions of Clause 3, Article 5 of this Decree.

3. In cases where land is transferred from lease land to land allocation with payment of land use fee, and before that, the land user has paid compensation for land and prepaid land lease fees, the compensation for land paid according to the law on compensation and support and the prepaid land lease fees (for the remaining period) shall be deducted from the land use fee payable.

Article 8. Collecting land use fee when issuing certificates of land use rights to current land users

1. Households and individuals using residential land from October 15, 1993 to the date of issuance of the certificate of land use rights who have not yet paid the land use fee must pay the land use fee according to the provisions of Clause 1 and Clause 2, Article 4 and point b, c Clause 2, Article 6 of this Decree.

2. Households and individuals currently using land as prescribed in Clause 6, Article 50 of the Land Law 2003, when issued certificates of land use rights, the land use fee shall be calculated at fifty percent of the land price determined by the provincial people's committee or the municipal people's committee under the central government at the time of issuance of the certificate of land use rights.

3. Households and individuals currently using residential land transferred from organizations allocated land by the State without payment of land use fee, leased land by the State, or self-changed the purpose of land use to residential land and distributed such residential land to employees of the organization during the period from October 15, 1993 to the effective date of this Decree, when issued certificates of land use rights, the land use fee shall be paid according to the provisions of Clause 2, Article 5 of this Decree, specifically as follows:

a) Pay fifty percent of the land use fee for the area within the residential land allocation limit; this provision can only be implemented once for each household and individual; subsequent land allocations shall collect one hundred percent of the land use fee;

b) Pay one hundred percent of the land use fee for the area exceeding the residential land allocation limit.

Article 9. Collecting land use fee for industrial zone land

1. The State allocates land with payment of land use fee to economic organizations and overseas Vietnamese for investment in construction and operation of industrial zone infrastructure, the land use fee shall be regulated as follows:

a) Allocation of land according to the decision of competent state authorities, the land use fee shall be paid according to the provisions of Clause 2 and Clause 3, Article 5 of this Decree;

b) Allocation of land through auction or bidding for projects using land, the land use fee shall be paid according to the provisions of Clause 1, Article 5 of this Decree;

c) The area of land used to construct common infrastructure works according to approved project plans shall not be subject to payment of land use fee.

2. Organizations, households, individuals, and overseas Vietnamese requiring land use in industrial zones developed by the State for production and business purposes, the land use fee shall be regulated as follows:

a) Allocation of land through auction, the land use fee shall be paid according to the provisions of Clause 1, Article 5 of this Decree;

b) Allocation of land according to the decision of competent state authorities, the land use fee shall be calculated based on the provisions of Clause 1 and Clause 2, Article 4 of this Decree.

Article 10. Collecting land use fee for high-tech zone land and economic zone land

Organizations, households, individuals, and overseas Vietnamese requiring land use in high-tech zones and economic zones for production and business purposes, the land use fee shall be regulated as follows:

1. Allocation of land through auction, the land use fee shall be paid according to the provisions of Clause 1, Article 5 of this Decree.

2. Allocation of land according to the decision of competent state authorities, the land use fee shall be calculated based on the provisions of Clause 1 and Clause 2, Article 4 of this Decree.

Chapter III
Exemption and reduction of land use fee

Article 11. Principles for implementing exemption and reduction of land use fee

1. A household or individual falling within the category eligible for exemption or reduction of land use fee shall only be exempted or reduced once in the following cases: being granted land by the State to build a house or being permitted to change the purpose of land use from other types of land to residential land or being issued a certificate of land use rights for residential land.

2. In a household where multiple members fall within the category eligible for reduction of land use fee, the reductions of each member shall be combined to form a total reduction for the entire household, but the maximum reduction shall not exceed the amount of land use fee payable within the residential land allocation limit.

3. In the case where a household or an individual falls within the category eligible for both exemption and reduction of land use fee, they shall be entitled to the exemption of land use fee; if an individual eligible for reduction of land use fee has multiple levels of reduction, they shall be entitled to the highest level of reduction.

4. Exemption or reduction of land use fee shall not be applied in the case of auctioning the right to use land to grant land with payment of land use fee; transferring from leasehold land to grant land with payment of land use fee for production and business purposes.

5. Exemption or reduction of land use fee as prescribed in Article 12 and Article 13 of this Decree shall only be directly implemented for the eligible subjects and calculated based on the amount of land use fee payable as stipulated in Articles 5, 6, 7, 8, 9, and 10 of this Decree.

Article 12. Exemption of land use fee

1. Exemption of land use fee as prescribed by laws on encouraging investment.

2. Land granted to implement projects for building houses to implement housing policies for persons who have rendered meritorious services to the revolution according to the laws on persons who have rendered meritorious services.

3. For land granted to construct dormitories for students funded by state budget; land for constructing houses for people who need to be relocated due to natural disasters; land for constructing multi-story apartment buildings for ethnic minority people in areas with special difficulties in socio-economic conditions; land for constructing multi-story apartment buildings for workers in industrial zones.

4. Land for constructing public works with commercial purposes (socialized) in the fields of education, health care, culture, physical education, and sports.

5. Residential land within the allocation limit (including granting land, issuing certificates of land use rights to current land users, changing the purpose of land use) for persons who have rendered meritorious services to the revolution according to the decision of the Prime Minister.

6. Households or individuals who have been issued certificates of land use rights but the land was stably used before October 15, 1993 and still owe land use fees.

7. Other cases as decided by the Prime Minister.

Article 13. Reduction of land use fee

1. Reduction of land use fee as prescribed by laws on encouraging investment.

2. Reduction of 50% of land use fee for residential land allocated to poor households. The criteria for identifying poor households shall be regulated by the Ministry of Labor, Invalids and Social Affairs.

3. Reduction of 20% of land use fee when the State grants land to factories and enterprises that must relocate according to planning; however, the maximum area of land to be reduced shall not exceed the area at the relocation site.

4. Residential land within the allocation limit (including granting land, changing the purpose of land use, issuing certificates of land use rights to current land users) for persons who have rendered meritorious services to the revolution according to the decision of the Prime Minister.

5. Other cases as decided by the Prime Minister.

Chapter IV
Collection and Payment of Land Use Fee

Article 14. Determination of Land Use Fee and Other Charges

1. The land registry documents sent by the Land Registration Office or the environmental resources management agency serve as the basis for the tax authority to determine the amount of land use fee and other charges that organizations, households, and individuals must pay.

2. Within three working days from the date of receipt of the land registry documents sent by the Land Registration Office or the environmental resources management agency, the tax authority must perform the following tasks:

a) Review the land registry documents, determine the amount of land use fee and other charges to be paid; in cases where there is insufficient basis to calculate the land use fee and other payments, a written notice must be issued to the sending agency to provide additional information;

b) Notify the land use fee and other charges to be paid to the sending agency of the land registry documents. The notification must clearly state the name of the organization, household, or individual responsible for payment, the amount to be paid for each item, the payment location (State Treasury), the payment deadline, and other contents as prescribed by the Ministry of Finance.

In cases where the Land Registration Office or the environmental resources management agency needs to send supplementary land registry documents, the three-day period starts from the date of receipt of the supplementary documents.

Article 15. Deadline for Payment of Land Use Fee and Other Charges

1. Within three working days from the date of receipt of the tax authority's notification, the Land Registration Office or the environmental resources management agency must send a notification of receipt to the organization, household, or individual responsible for financial obligations.

2. Within thirty working days from the date of receipt of the notification of payment of land use fee and other charges, the organization, household, or individual must pay the full amount of land use fee and other charges at the designated payment location according to the notification.

3. Based on the notification of the tax authority sent by the Land Registration Office or the environmental resources management agency, the agency (Treasury) directly collecting the land use fee and other charges must immediately deposit them into the State Treasury when the organization, household, or individual fulfills their obligation to pay the land use fee and other charges.

Article 16. Responsibilities of the Tax Authority, Treasury, and the Land Use Fee Payer

1. Tax Authority:

a) Accurately calculate and notify the land use fee and other charges within the specified time frame;

b) Explain any queries from the land use fee payer; within three working days from the date of receipt of the request from the person responsible for fulfilling financial obligations, review and adjust the amount of land use fee and other charges, and send a notification of adjustment or non-adjustment to the Land Registration Office or the environmental resources management agency within their jurisdiction.

2. Treasury:

a) Collect the full amount of land use fee and other charges into the State Treasury on the day the person responsible for fulfilling financial obligations makes the payment.

b) Shall not transfer the collection of money to the next day after having received all the procedures for payment from the person responsible for fulfilling financial obligations;

c) Shall not refuse to collect for any reason.

3. Responsibilities of land users.

If the deadline for paying the land use fee as notified by the tax authority has passed without full payment of the land use fee and other payments, penalties for late payment shall be imposed according to Clause 1, Article 18 of this Decree.

Article 17. Payment of land use fees for cases with outstanding debts

1. Households and individuals currently using land that was used from October 15, 1993 to the date this Decree takes effect, who have been issued a certificate of land use rights but still owe land use fees, must pay the land use fees into the state budget according to the regulations at the time the certificate of land use rights was issued.

2. In cases where households and individuals have been issued a certificate of land use rights for land that was stably used before October 15, 1993, and have paid the land use fees into the state budget according to the law, the state budget will not refund such payments.

Chapter V
Handling violations and complaints

Article 18. Penalties

1. For late payment of land use fees into the state budget, a penalty of 0.02% (two ten-thousandths) per day of delay shall be imposed on the amount of land use fees delayed.

2. Any person who abuses their position or power, intentionally creates difficulties or obstacles for those paying land use fees, misappropriates, embezzles land use fees; falsifies records, causing loss to the state budget, shall be subject to disciplinary action, administrative fines, compensation for damages, or criminal prosecution according to the provisions of the law depending on the severity of the violation.

Article 19. Complaints and Resolution of Complaints

1. The person required to pay the land use fee has the right to complain about the incorrect implementation of the regulations on collecting land use fees under this Decree. The complaint must be submitted to the agency directly responsible for calculating and collecting land use fees within thirty days from the date of receipt of the notification to pay the land use fee. During the waiting period for resolution, the complainant must pay the correct amount and the full land use fee as notified within the stipulated time.

2. The resolution of complaints shall be carried out in accordance with the provisions of the Law on Complaints and Petitions.

Chapter VI
Implementation Provisions

Article 20. Implementation

1. The Ministry of Finance shall guide the payment of land use fees, provide guidance on procedures and documents, and specify the authority to decide on exemptions and reductions of land use fees according to the provisions of this Decree.

2. The Ministry of Natural Resources and Environment shall guide the determination of land types, land area usage, valid and legitimate documents regarding land use rights as the basis for calculating land use fees according to the provisions of this Decree.

3. Provincial People's Committees and municipal people's committees under the central government shall be responsible for directing levels and sectors under their management to implement the collection of land use fees according to the provisions of this Decree, inspecting and handling cases of incorrect declaration and determination of actual land usage periods that cause losses to the State as well as to those paying land use fees.

Article 21. Effectiveness

1. This Decree shall take effect fifteen days after its publication in the Official Gazette.

2. The collection of land use fees when selling state-owned houses to tenants shall be carried out according to the provisions of Government Decree No. 61/CP dated July 5, 1994 on the purchase and sale of housing.

3. This Decree replaces Government Decree No. 38/2000/NĐ-CP dated August 23, 2000 on the collection of land use fees, and Clause 1, Article 13 of Government Decree No. 71/2001/NĐ-CP dated October 5, 2001 on preferential investment incentives for building houses for sale and lease.

All previous regulations on the collection of land use fees that conflict with the provisions of this Decree are hereby abolished.

Article 22. Responsibility for Implementation

The Minister of Finance shall be responsible for guiding the implementation of this Decree.

Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial and municipal people's committees under the central government, organizations, households, and individuals using land shall be responsible for implementing this Decree./.