Circular No. 32/2018/TT-BTC guides the implementation of certain provisions of Decree No. 74/2017/NĐ-CP dated June 20, 2017 of the Government on special mechanisms and policies for Hoa Lac High-Tech Park.

CIRCULAR

Guidelines for implementing certain provisions of Decree No. 74/2017/NĐ-CP

dated June 20, 2017 of the Government on mechanisms and policies

with special characteristics for Hoa Lac High-Tech Park

On the basis of The Law on Land Tax for Non-Agricultural Purposes 2010;

Pursuant to the Law on Corporate Income Tax 2008, 2013, 2014;

Pursuant to the Law on Land 2013;

Pursuant to the Law on Investment 2014;

Pursuant to the Law on Export Duties and Import Duties 2016;

Pursuant to Decree No. 80/2014/NĐ-CP dated August 6, 2014 of the Government on drainage and wastewater treatment;

Pursuant to Decree No. 35/2017/NĐ-CP dated April 3, 2017 of the Government on land use fees, land rental fees, and water surface rental fees in economic zones and high-tech parks;

Pursuant to Decree No. 74/2017/NĐ-CP dated June 20, 2017 of the Government on mechanisms and policies with special characteristics for Hoa Lac High-Tech Park;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the State Asset Management Department and the Director of the Tax Policy Department,

The Minister of Finance issues this Circular guiding the implementation of certain provisions of Decree No. 74/2017/NĐ-CP dated June 20, 2017 of the Government on mechanisms and policies with special characteristics for Hoa Lac High-Tech Park.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the implementation of Clause 4, Clause 5 Article 4; Clause 3, Clause 4 Article 7; Article 8; Point c Clause 1 and Clause 4 Article 10; Article 11; Article 17, Article 18; Article 19 of Decree No. 74/2017/NĐ-CP dated June 20, 2017 of the Government on mechanisms and policies with special characteristics for Hoa Lac High-Tech Park (hereinafter referred to as Decree No. 74/2017/NĐ-CP).

Article 2. Applicability

1. Domestic and foreign organizations and individuals investing and working at Hoa Lac High-Tech Park (hereinafter referred to as High-Tech Park).

2. Hoa Lac High-Tech Park Management Board (hereinafter referred to as Management Board).

3. Relevant state management agencies and specialized agencies.

Chapter II

SPECIFIC PROVISIONS

Article 3. Land clearance and resettlement

Land clearance and resettlement shall be carried out in accordance with Article 4 of Decree No. 74/2017/NĐ-CP; Clauses 4 and 5 of this Article are specifically guided as follows:

1. The funds for land clearance work shall be prioritized to ensure sufficient allocation to the Management Board from the central government budget within the medium-term investment plan for the period 2016-2020, from the funds specified in Clause 2 of this Article, and other lawful sources to ensure the completion of land clearance and construction of technical infrastructure of the High-Tech Park according to the schedule stipulated in Clause 6 of Article 3 of Decree No. 74/2017/NĐ-CP.

3. The settlement of claims, support, and resettlement projects serving land clearance for the High-Tech Park shall be implemented in accordance with Circular No. 09/2016/TT-BTC dated January 18, 2016 of the Ministry of Finance on the settlement of completed projects funded by state capital.

Article 4. Management and operation of technical infrastructure works

The management and operation of technical infrastructure works shall be carried out in accordance with the provisions of Article 7 of Decree No. 74/2017/NĐ-CP; Clauses 3 and 4 of this Article shall be specifically guided as follows:

1. Infrastructure usage fee:

a) The infrastructure usage fee for technical infrastructure works invested by the State is the revenue as stipulated at point a, Clause 3, Article 7 of Decree No. 74/2017/NĐ-CP.

The average infrastructure usage fee of the High-Tech Zone is determined by the following formula:

Where:

- The estimated operational and maintenance costs are determined by the method of preparing budgets under the condition that all infrastructure works according to the planning have been completed and put into operation. pursuant to the completed and operational master plan.

- The anticipated costs for maintenance work calculated according to the annual maintenance plan determined in accordance with Clause 2, Article 5 of Circular No. 03/2017/TT-BXD dated March 16, 2017, issued by the Ministry of Construction on guiding the determination of construction project maintenance costs (hereinafter referred to as Circular No. 03/2017/TT-BXD).

- The estimated maintenance costs are calculated based on the annual maintenance plan as prescribed in Clause 2, Article 5 of Circular No. 03/2017/TT-BXD dated March 16, 2017, issued by the Ministry of Construction on guiding the determination of construction project maintenance costs (hereinafter referred to as Circular No. 03/2017/TT-BXD).

- The total planned land area for lease does not include the area planned for constructing transportation works and technical infrastructure, green spaces, concentrated water bodies, public parks which are exempted from the entire land rental fees as stipulated in point a, Clause 3, Article 8 of Decree No. 74/2017/NĐ-CP and point a, Clause 2, Article 14 of Decree No. 35/2017/NĐ-CP dated April 3, 2017, of the Government on collecting land use fees, land rental fees, and surface water rental fees in economic zones and high-tech zones (hereinafter referred to as Decree No. 35/2017/NĐ-CP).

b) Based on the average infrastructure usage fee of the High-Tech Zone prescribed in point a of this clause, the current infrastructure status, and actual investment attraction situation, the Management Board decides the infrastructure usage fee for each functional zone annually.

c) The amount of infrastructure usage fee that infrastructure users must pay equals the infrastructure usage fee prescribed in point b of this clause multiplied by the area of land used.

2. Wastewater treatment fee:

a) The wastewater treatment fee for the wastewater treatment system invested by the State is the revenue as stipulated in point c, Clause 3, Article 7 of Decree No. 74/2017/NĐ-CP. The Management Board determines the wastewater treatment fee based on the principle of sewage service prices linked to the quality of sewage service provision, without distinguishing between domestic and foreign organizations and individuals, in line with state policies to cover the operating, maintenance, and repair costs of the wastewater treatment system. The determination of the wastewater treatment fee is based on the volume of wastewater and pollutant content in the wastewater as prescribed in Decree No. 80/2014/NĐ-CP dated August 6, 2014, of the Government on Sewage and Wastewater Treatment, and the Management Board sends written opinions to the competent state management agencies on sewage and price management at the local level before making a decision.

(tonnes CO

/year)

- The estimated operational and maintenance costs are determined by the method of preparing budgets under the condition that the wastewater treatment system reaches its designed capacity.

- The estimated maintenance costs are calculated based on the annual maintenance plan as prescribed in Clause 2, Article 5 of Circular No. 03/2017/TT-BXD.

- The total designed capacity of the wastewater treatment system is calculated by multiplying the designed capacity (m3/day) by 365 days.

c) In case the pollutant content in the wastewater does not meet the internal standards of the High-Tech Zone, the wastewater treatment fee is determined by adding an additional surcharge decided by the Management Board to the fee prescribed in point b of this clause.

d) The amount of wastewater treatment fee that dischargers into the wastewater treatment system must pay equals the wastewater treatment fee prescribed in points b and c of this clause multiplied by the volume of wastewater generated.

3. Infrastructure usage fee and cost recovery for leveling land for construction projects invested by infrastructure investors as stipulated in point c, Clause 1 and Clause 4, Article 10 of Decree No. 74/2017/NĐ-CP, excluding funds from the state budget, shall be managed and used by the infrastructure investor according to the management regulations issued by the Management Board as prescribed in Clause 2, Article 15 of Decree No. 74/2017/NĐ-CP.

4. The source of funds for the operation, maintenance, and repair of technical infrastructure works and the wastewater treatment system invested by the State shall be implemented in accordance with Clause 4, Article 7 of Decree No. 74/2017/NĐ-CP. The supplementary state budget funds are determined as follows:

a) Annually, when preparing the state budget estimate, the Management Board prepares the total budget for the operation, maintenance, and repair of technical infrastructure works and the wastewater treatment system invested by the State; the total income from the infrastructure usage fee and wastewater treatment fee of organizations and individuals operating in the High-Tech Zone as prescribed by the Management Board; the shortfall in the case where income is insufficient to cover expenses is included in the Management Board's state budget expenditure estimate and submitted to the Ministry of Finance for consolidation and submission to the competent authority in accordance with the State Budget Law.

c) The source of state budget funds to be supplemented is allocated from the annual regular expenditure of the state budget based on the capacity of the state budget for that year.

5. Units assigned by the Management Board to collect infrastructure usage fees and wastewater treatment fees shall establish and issue invoices to users and fulfill tax obligations in accordance with the provisions of the law. Invoices for infrastructure usage fees and wastewater treatment fees shall be issued in accordance with the provisions of the law on invoices.

Article 5. Determination of Land Rent, Handling of Compensation and Land Clearing Funds, and Land Preferential Policies in the High-Tech Zone

The determination of land rent, handling of compensation and land clearing funds, and land preferential policies in the High-Tech Zone shall be carried out in accordance with the provisions of Article 8 of Decree No. 74/2017/ND-CP; certain contents of this provision are specifically guided as follows:

1. Specific land prices for calculating land rent in the High-Tech Zone shall be determined using the land price adjustment factor method and decided by the Management Board in accordance with Clause 2 of Article 8 of Decree No. 74/2017/ND-CP; specifically: The land price is calculated according to the purpose of leased land at the detailed price list for various types of land in the High-Tech Zone multiplied (x) by the land price adjustment factor, wherein:

a) The detailed price list for various types of land in the High-Tech Zone is issued by the People's Committee of Hanoi City based on approved planning and specific conditions regarding technical infrastructure as stipulated in Clause 1 of Article 8 of Decree No. 74/2017/ND-CP.

b) The land price adjustment factor is issued annually and publicly announced during implementation according to each area, road, and location corresponding to each land use purpose according to approved planning after soliciting opinions from the People's Committee of Hanoi City but not less than 1.0 and applied from January 1st of each year.

2. Determination of Annual Land Rent Payment

a) Annual land rent payment must be paid by multiplying (x) the rental rate by the area subject to land rent payment. Specifically:

- The rental rate is determined by multiplying (x) the percentage rate (%) by the specific land price prescribed in Clause 2 of Article 8 of Decree No. 74/2017/ND-CP and guided in Clause 1 of this Article. The percentage rate (%) is issued annually and publicly announced during implementation according to each area, road, and location corresponding to each investment sector after soliciting opinions from the People's Committee of Hanoi City, applied from January 1st of each year at a rate of 1%, except for:

+ Land used for implementing projects in special investment priority industries as prescribed by law at a rate of 0.5% to 1%.

+ Land used for commercial and service purposes at a rate of 1% to 3%.

- The area subject to land rent payment is the area recorded in the decision on land lease.

b) In cases where the lessee is exempted from land rent payments according to Clause 3 of Article 8 of Decree No. 74/2017/ND-CP or has amounts deducted from the land rent payable through conversion into time periods for completing financial obligations related to land rent payments, the amount of land rent payable is determined according to the policy and land price at the time when land rent payments begin. Specifically:

- Amounts deductible from land rent payable include compensation, support, resettlement, and organizational expenses for compensation and land clearance (hereinafter referred to as compensation and land clearance amounts) that the lessee has repaid or voluntarily prepaid.

- The time when land rent payments begin is after the period of exemption from land rent payments as prescribed by law and the period determined for completing financial obligations related to land rent payments due to deductions from land rent payable. During the period of exemption from land rent payments and the period determined for completing financial obligations related to land rent payments, the rental rate is not adjusted.

- If the total period of exemption from land rent payments as prescribed by law and the period determined for completing financial obligations related to land rent payments due to deductions from land rent payable is shorter than the first cycle of stable rental rates, then the rental rate for the remaining period of the cycle is the rental rate determined at the time of the Decision on Land Lease.

- If, after deducting the period of exemption from land rent payments as prescribed by law and the period determined for completing financial obligations related to land rent payments due to deductions from land rent payable, the actual remaining period of land rent payments within the lease term is less than five years and the lessee wishes to prepay land rent for this period, the Management Board will consider and decide. The land price for calculating land rent is determined according to the policy and land price at the time the Management Board approves the prepayment of land rent for the actual remaining period of land rent payments. The lessee has rights and obligations related to land corresponding to the case of paying annual land rent.

c) In cases where the first year or the final year of the lease does not have a full twelve months, the land rent for that year is calculated based on the number of months of leasing. If the number of days of leasing in the first month or the last month of leasing is fifteen days or more, it is counted as one (01) month, if less than fifteen days, that month is not counted in the leasing period.

d) The rental rate is stabilized for five years from the date of the Management Board's decision on land lease. At the end of the stabilization period, the Management Board adjusts the rental rate for the subsequent period according to the policy and land price at the time of adjustment.

3. Determination of One-Time Land Rent Payment for the Entire Lease Term

a) One-time land rent payment for the entire lease term equals the rental rate multiplied (x) by the area subject to land rent payment. Specifically:

- When the lease term is equal to the term of the land type in the land price table, the one-time rental rate for the entire lease term equals the land price in the land price table multiplied (x) by the land price adjustment factor.

In cases where the lease term for land is shorter than the term specified for that type of land in the Land Price Table:

In cases where rent is exempted, the rental price for land collected in one lump sum for the entire lease period shall be determined according to the following formula:

Wherein: The time required to pay the land rent equals (=) the lease term determined in the Decision on Land Lease minus (-) the time exempted from paying land rent as stipulated in point a and point c, Clause 3, Article 8 of Decree No. 74/2017/NĐ-CP.

- The area subject to land rent payment is the area recorded in the decision on land lease.

b) The determination of the amount of land rent payable is as follows:

In cases where compensation and clearance costs are not deductible: The amount of land rent payable equals (=) the single payment rental price specified in point a of this clause multiplied (x) by the area subject to land rent payment.

In cases where compensation and clearance costs are deductible: The amount of land rent payable equals (=) the single payment rental price multiplied (x) by the area subject to land rent payment minus (-) the deductible compensation and clearance costs as prescribed by law.

4. Other provisions regarding the determination of land rent, water surface rent, handling of compensation and clearance costs, and exemption and reduction of land rent in the High-Tech Zone not provided for in Decree No. 74/2017/NĐ-CP and guided in this Circular shall be implemented in accordance with Decree No. 35/2017/NĐ-CP and Circular No. 89/2017/TT-BTC dated August 23, 2017 of the Ministry of Finance guiding certain provisions of Decree No. 35/2017/NĐ-CP.

Article 6. Management of land for functional zones with investors constructing and operating infrastructure

The management of land for functional zones with investors constructing and operating infrastructure shall be carried out in accordance with Article 10 of Decree No. 74/2017/NĐ-CP; point c, Clause 1 and Clause 4 shall be specifically guided as follows:

1. Investors are directly assigned land or lease land by the Management Board for the land area specified in point b, Clause 1 of Article 10 of Decree No. 74/2017/NĐ-CP. Investors are responsible for paying land leveling costs and other fees to the infrastructure developer as prescribed in Decree No. 74/2017/NĐ-CP, guided in this Circular, and related laws.

2. The Management Board approves the fee for using infrastructure, the recovery cost of land leveling expenses, and the rental price for re-leasing land to investors leasing land from the infrastructure developer as stipulated in Clause 3 of Article 10 of Decree No. 74/2017/NĐ-CP based on the proposal of the developer as prescribed in Clause 4 of Article 10 of Decree No. 74/2017/NĐ-CP, guided in this Circular, and related laws.

3. The Management Board bases the approval of the fee for using infrastructure, the recovery cost of land leveling expenses, and the rental price for re-leasing land as stipulated in Article 10 of Decree No. 74/2017/NĐ-CP on the infrastructure usage fee determined according to Article 7 of Decree No. 74/2017/NĐ-CP and guided in Article 4 of this Circular, the approved land leveling cost according to the law, and the rental price for land determined according to Article 8 of Decree No. 74/2017/NĐ-CP and guided in Article 5 of this Circular.

Article 7. Tax incentives

The implementation of tax incentives shall be carried out in accordance with Article 11 of Decree No. 74/2017/NĐ-CP; some contents of this Article are specifically guided as follows:

1. Corporate income tax

a) Income of enterprises from implementing new investment projects at the High-Tech Zone shall apply a tax rate of 10% for a period of 15 years, exempting taxes for a maximum of 04 years and reducing the amount of tax payable by 50% for a maximum of 09 subsequent years according to Clause 1, Article 13 and Clause 1, Article 14 of the Law on Corporate Income Tax.

b) Income of enterprises from implementing new investment projects at the High-Tech Zone with a capital investment scale of VND 4,000 billion or more shall apply a tax rate of 10% for a period of 30 years, exempting taxes for a maximum of 04 years and reducing the amount of tax payable by 50% for a maximum of 09 subsequent years starting from the first year of taxable income.

c) The period of applying preferential tax rates, the period of tax exemption and reduction, and the conditions for applying corporate income tax incentives shall be implemented in accordance with the laws on corporate income tax and related laws.

2. Import tax, personal income tax, non-agricultural land use tax shall be implemented in accordance with the current tax laws.

Article 8. Collection, payment, and use of land rent; compensation and land clearance refund money; infrastructure usage fees; wastewater treatment fees; project performance guarantee deposit in case of investor violation

The collection, payment, and use of land rent; compensation and land clearance refund money; infrastructure usage fees; wastewater treatment fees; project performance guarantee deposit in case of investor violation shall be implemented in accordance with Article 17 of Decree No. 74/2017/NĐ-CP; some contents of this Article are specifically guided as follows:

2. The Management Board shall determine and notify the amount of payment due to the land users according to the Notice model attached to Circular No. 77/2014/TT-BTC dated June 16, 2014, issued by the Ministry of Finance guiding certain provisions of Decree No. 46/2014/NĐ-CP dated May 15, 2014, of the Government on collecting land rent and water surface lease fees.

3. The Management Board and the People's Committee of Hanoi City shall establish a coordination regulation for monitoring and managing the collection and payment of financial obligations and administrative procedures regarding land use by land users within the High-Tech Zone.

Chapter III

IMPLEMENTING PROVISIONS

Article 9. Transitional provisions on the fulfillment of financial obligations concerning land use for cases that have used land before the effective date of Decree No. 74/2017/NĐ-CP but have not yet paid land rent

Transitional provisions on the fulfillment of financial obligations concerning land use for cases that have used land before the effective date of Decree No. 74/2017/NĐ-CP but have not yet paid land rent shall be implemented in accordance with Article 18 of Decree No. 74/2017/NĐ-CP; some contents of this Article are specifically guided as follows:

1. For cases where investors have used land before the effective date of Decree No. 74/2017/NĐ-CP but have not yet received a Land Lease Decision and have not paid the land rent as stipulated in Clause 1, Article 18 of Decree No. 74/2017/NĐ-CP.

a) The Management Board shall determine the land rent, exemptions, and reductions in land rent according to the policy and land price at the time of the land lease decision. The start time for calculating the exemption and reduction of land rent is the time when the investor receives the land on-site.

b) In cases where investors are eligible for land rent exemptions and reductions but wish not to enjoy such benefits, they shall pay the land rent as prescribed.

2. For cases where infrastructure developers have been leased land by the Management Board before the effective date of Decree No. 74/2017/NĐ-CP, have been granted Land Use Certificates but have not yet paid the land rent.

a) The Management Board shall determine the amount of land rent exempted and reduced according to the annual land lease fee specified in Document No. 2703/UBND-KT dated June 20, 2006, of the People's Committee of Ha Tay Province.

b) The late payment penalty shall be calculated from the time of re-leasing the land until the time the land rent is paid into the state budget according to the laws in force during each period.

Article 10. Transitional provisions for projects that have already utilized land in the expanded planning area of the High-Tech Zone pursuant to Decision No. 621/QĐ-TTg dated May 23, 2008 of the Prime Minister (the southern area of Thang Long Avenue and the eastern area of the High-Tech Zone within Ha Bang Commune, Thach That District, Hanoi City).

Transitional provisions for projects that have already utilized land in the expanded planning area of the High-Tech Zone pursuant to Decision No. 621/QĐ-TTg dated May 23, 2008 of the Prime Minister (the southern area of Thang Long Avenue and the eastern area of the High-Tech Zone within Ha Bang Commune, Thach That District, Hanoi City) shall be implemented in accordance with Article 19 of Decree No. 74/2017/NĐ-CP; certain contents of this Article are specified as follows:

1. Projects that were granted investment permits by the People's Committee of Ha Tay Province before the date on which the Prime Minister approved the adjustment of the overall planning for construction of the High-Tech Zone (May 23, 2008) and are currently operating in the High-Tech Zone shall continue to enjoy incentives for the remaining period if the incentive contents in the Investment Certificate/Investment License/Investment Incentive Certificate comply with the legal regulations at the time of issuance of the Investment Certificate/Investment License/Investment Incentive Certificate.

2. Projects (excluding those mentioned in Clause 1 of this Article) that are currently operating in the High-Tech Zone and are enjoying incentives higher than those stipulated in Decree No. 74/2017/NĐ-CP shall continue to enjoy the higher level of incentives for the remaining period; in cases where the incentives are lower than those stipulated in Decree No. 74/2017/NĐ-CP, they shall enjoy incentives according to Decree No. 74/2017/NĐ-CP for the remaining incentive period from the effective date of this Decree.

3. For the land area that the Infrastructure Investor has sublet prior to the integration of Bac Phu Cat Industrial Park into the High-Tech Zone but the Infrastructure Investor has not yet paid the land rent.

a) The Management Board shall determine the amount of land rent exempted or reduced based on the annual land rent rate prescribed in Decision No. 896/QĐ-TC dated December 8, 2006 of the Ha Tay Department of Finance.

b) The late payment amount shall be calculated from the date of subletting the land until the date when the land rent is paid into the state budget according to the legal regulations of each period.

4. For the land area that the People's Committee of Ha Tay Province had leased prior to the date on which the Prime Minister approved the adjustment of the overall planning for construction of the High-Tech Zone (May 23, 2008).approval to adjust the overall construction planning of the High-Tech Zone (May 23, 2008).

a) Determine the land rent for the period of land use from the date of actual handover of the land to the end of 2016.

The People's Committee of Hanoi City shall instruct the tax authority to base on the legal regulations of each period and the Land Lease Decision/Investment Certificate/Investment License/Investment Incentive Certificate to determine the amount of land rent payable and the amount of land rent exempted or reduced.

In cases where the investor has prepaid compensation and land clearance costs according to the plan approved by the competent state agency and such amounts have not been deducted as prescribed and have not been included in production and business expenses, they may be deducted from the land rent payable (in cases of leasing land in one lump sum for the entire lease period), converted into the completed years of annual land rent payment (in cases of leasing land annually) according to the policy and land price at the time of land leasing.

The People's Committee of Hanoi City shall instruct the financial department to determine the amount of compensation and land clearance costs deductible and notify the Investor and the Management Board of the remaining land rent payable (in cases of leasing land in one lump sum for the entire lease period) and the start date for paying the land rent (in cases of leasing land annually).

b) Determine the land rent for the period of land use from January 1, 2017 onwards.

The Management Board shall base on the Land Price Table, land price adjustment coefficient, and percentage rate to determine and notify the land rent to the land users; simultaneously sending one copy to the tax authority, the Hanoi Land Registration Office for coordination in monitoring and managing the collection of financial obligations related to land and implementing administrative procedures concerning land.

Article 11. Effective Date

1. This Circular takes effect from May 15, 2018.

2. Cases arising from the effective date of Decree No. 74/2017/NĐ-CP shall be implemented in accordance with Decree No. 74/2017/NĐ-CP and the guidance provided in this Circular. In cases where amended or supplemented documents contain different contents from Decree No. 74/2014/NĐ-CP and this Circular, they shall be implemented according to the amended or supplemented documents.

3. During the implementation process, if there are difficulties or obstacles, it is requested that agencies, organizations, units, and individuals promptly reflect them to the Ministry of Finance for consideration and resolution./.