Circular No. 207/2014/TT-BTC on determining land rental fees for agricultural and forestry companies using land for agricultural, forestry, and aquaculture purposes.

CIRCULAR

Article 24Prescribing the determination of land rent for agricultural and forestry companies

using land for agricultural, forestry production, and aquaculture purposes

forestry, aquaculture

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The Government issues this Decree on management and development of industrial clusters.

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013, promulgated by the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 46/2014/NĐ-CP dated May 15, 2014 of the Government on the collection of land rent and water surface rent;

Pursuant to Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government on the reorganization, renovation, development, and improvement of the operational efficiency of agricultural and forestry companies;

Pursuant to Decision No. 686/QĐ-TTg dated May 11, 2014 of the Prime Minister on the Program and Plan of the Government to implement Resolution No. 30-NQ/TW dated March 12, 2014 of the Politburo on continuing the reorganization, renovation, development, and improvement of the operational efficiency of agricultural and forestry companies;

At the proposal of the Director of the State Asset Management Agency,

The Minister of Finance issues this Circular prescribing the determination of land rent for agricultural and forestry companies using land for agricultural, forestry production, and aquaculture purposes.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular prescribes the determination of land rent for land used for agricultural, forestry production, and aquaculture purposes.

Article 2. Applicability

1. Agricultural and forestry companies include:

a) State-owned limited liability companies with 100% state capital (hereinafter referred to as agricultural and forestry companies) that have been converted according to Decree No. 170/2004/NĐ-CP dated September 22, 2004 of the Government on the reorganization, renovation, and development of state-owned agricultural farms, Decree No. 200/2004/NĐ-CP dated December 3, 2004 of the Government on the reorganization, renovation, and development of state-owned forestry farms, and Decree No. 25/2010/NĐ-CP dated March 19, 2010 of the Government on the conversion of state-owned enterprises into state-owned limited liability companies and the organization of management of state-owned limited liability companies.

b) State-owned agricultural and forestry farms that have not yet been converted into state-owned limited liability companies but are being reorganized, renovated, developed, and improved in accordance with Article 26 of Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government on the reorganization, renovation, development, and improvement of the operational efficiency of agricultural and forestry companies.

2. Other relevant agencies, organizations, units, and individuals.

Chapter II

SPECIFIC PROVISIONS

Article 3. Land Rent Rate

1. Determining the annual land rent rate Annual land rent rate = Percentage (%) x Price of land for rental income calculation.

a) The percentage (%) for determining the land rent rate is 0.5%.

b) The price of land for rental income calculation used for agricultural, forestry production, and aquaculture purposes equals the price of land for corresponding usage purpose at the Land Price Table prescribed by the People's Committee of the province/city directly under the central government (hereinafter referred to as the provincial People's Committee) multiplied by the land price adjustment coefficient issued by the provincial People's Committee at the time of determining the land rent rate. In cases where the leased land area belongs to multiple areas, zones, locations with different land prices and adjustment coefficients, the price of land for rental income calculation shall be determined based on the weighted average price for the entire leased land area.

2. Determining the lump-sum land rent rate for the entire lease period

The lump-sum land rent rate for the entire lease period for land used for agricultural, forestry production, and aquaculture purposes equals the price of land for corresponding usage purpose at the lease term prescribed by the provincial People's Committee in the Land Price Table multiplied by the land price adjustment coefficient issued by the provincial People's Committee at the time of determining the land rent rate.

In cases where the leased land area belongs to multiple areas, zones, locations with different land prices and adjustment coefficients, the lump-sum land rent rate for the entire lease period shall be determined based on the weighted average price for the entire leased land area.

In cases where the lease term differs from the term specified in the Land Price Table, the land price for determining the land rent rate shall be calculated according to the following formula:

3. Determining the land rent rate for land with water surfaces

a) For the portion without water surface, the determination of the annual land rent rate and the lump-sum land rent rate for the entire lease period shall be carried out in accordance with the provisions of Clause 1 and Clause 2 of this Article.

b) For the portion with water surface, the annual land rent rate and the lump-sum land rent rate for the entire lease period shall be 50% of the annual land rent rate or the lump-sum land rent rate for the entire lease period of adjacent land with the same usage purpose.

Article 4. Area Subject to Payment of Land Rent

The area subject to payment of land rent is the area of land used for agricultural production, forestry, aquaculture as recorded in the decision on land lease or the land lease contract issued by the competent state agency.

In cases where, after the agricultural and forestry company has reviewed the current land use status according to Article 13 of Decree No. 118/2014/NĐ-CP dated December 17, 2014 of the Government on the reorganization, renovation, development, and improvement of the efficiency of agricultural and forestry companies (hereinafter referred to as Decree No. 118/2014/NĐ-CP), there is no decision on land lease or land lease contract issued by the competent state agency, the area subject to payment of land rent shall be the area of land used for agricultural production, forestry, and aquaculture as approved in the land use plan by the provincial People's Committee.

Article 5. Principles for Adjusting the Unit Price of Land Rent for Annual Land Rent Payments

1. The unit price of land rent for agricultural, forestry production, and aquaculture purposes shall remain stable for five years from the date when the land lease must be converted.

2. At the end of the period during which the unit price of land rent remains stable, based on the land price in the Land Price Table, the land price adjustment factor, and the percentage rate for calculating the unit price of land rent as prescribed by the provincial People's Committee, the tax authority shall reassess the unit price of land rent and notify the annual land rent payable for the next stability period to the lessee organization.

3. For cases where there is no decision on land lease or land lease contract, the unit price of land rent for annual land rent payments shall not remain stable as prescribed in Clause 1 of this Article.

Article 6. Procedures for Determining and Collecting Land Rent

The procedures for determining and collecting land rent shall be implemented in accordance with Decree No. 46/2014/NĐ-CP dated May 15, 2014 of the Government on the collection of land rent and water surface rent and the guiding documents for its implementation.

Article 7. Exemption and Reduction of Land Rent

1. The principles, levels, documents, procedures, formalities, and authorities for exempting and reducing land rent for agricultural, forestry, and aquaculture purposes shall be carried out in accordance with Articles 18, 19, 20, and 21 of Decree No. 46/2014/NĐ-CP dated May 15, 2014 of the Government on the collection of land rent and water surface rent and the Circulars guiding the implementation of this Decree.

2. The exemption and reduction of land rent for special investment priority projects in agriculture, investment priority projects in agriculture, and encouraged investment projects in agriculture shall be carried out in accordance with the Government's policies encouraging enterprises to invest in agriculture and rural areas.

Chapter III

IMPLEMENTATION

Article 8. Implementation organization

1. The provincial People's Committee shall be responsible for directing financial agencies, tax agencies, state treasuries, natural resources and environment agencies, and relevant local agencies to implement the determination and collection of land rent in accordance with the guidance provided in this Circular and the laws on land rent and water surface rent collection.

2. The provincial People's Committee shall consider and decide to allow other entities that are not the agricultural and forestry companies specified in Article 2 of this Circular, currently leasing land from the State for agricultural, forestry, and aquaculture purposes, to apply the provisions of this Circular for calculating land rent payments when they reach the time to determine the unit price of land rent for the next stability period.

3. For cases of annual land rent payments where the land lease contracts have been signed and are within the period of stable unit price of land rent, if they are enjoying preferential periods under the laws on land rent collection, upon expiration of the stable unit price period and the preferential period, they shall apply the unit price of land rent as prescribed in this Circular. If the unit price of land rent during the stable period is higher than the unit price prescribed in this Circular, it may be adjusted according to the provisions of this Circular if the lessee requests in writing. The tax authority shall take the lead in coordinating with relevant agencies to reassess the unit price of land rent for such cases; the reassessment date and the start of the stable unit price period shall be applied from January 1, 2015.

4. For cases of annual land rent payments where the time to adjust the unit price of land rent was before January 1, 2015 but had not been adjusted, adjustments shall be made according to this Circular for the remaining lease period. For the period of land use that had not been adjusted for the unit price of land rent, adjustments shall be made according to the policies and laws of each period to settle and finalize land rent payments.

Article 9. Effective Date

1. This Circular takes effect from February 15, 2015.

2. Repeal Circular No. 216/2012/TT-BTC dated December 10, 2012 of the Ministry of Finance guiding the determination of land rent for rubber plantation land.

3. During the implementation process, if there are difficulties or obstacles, please promptly report them to the Ministry of Finance for consideration and resolution.