Decree No. 35/2017/NĐ-CP on the collection of land use fees and land rental fees for land and water surfaces in Economic Zones and High-Tech Zones

DECREE

Rules on collecting land use fees, land rental fees, and water surface rental fees in Economic Zones and High-Tech Zones

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Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Tax Administration dated November 29, 2006;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Law on Tax Administration dated November 20, 2012;

Pursuant to the High Technology Law dated November 13, 2008;

Pursuant to the Law on Science and Technology dated June 18, 2013;

Pursuant to the Law on Land dated November 29, 2013;

Pursuant to the Investment Law dated November 26, 2014;

Pursuant to the State Budget Law dated June 25, 2015;

At the proposal of the Minister of Finance;

The Government promulgates this Decree on rules for collecting land use fees, land rental fees, and water surface rental fees in Economic Zones and High-Tech Zones.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Decree sets forth rules for collecting land use fees, land rental fees, and water surface rental fees in Economic Zones and High-Tech Zones.

2. The High-Tech Zone specified in this Decree is established and operates in accordance with the laws on high technology.

3. From the date this Decree takes effect, regulations on collecting land use fees, land rental fees, and water surface rental fees in Economic Zones and High-Tech Zones shall be implemented in accordance with this Decree.

Article 2. Applicability

Organizations and individuals receiving land from the State for allocation or leasing in Economic Zones and High-Tech Zones in accordance with the laws on land shall comply with the provisions of this Decree.

2. Management Boards of Economic Zones and High-Tech Industrial Zones.

1. Rural areas refer to administrative regions not including urban wards under districts and cities as provided for in the Government's Decree on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.

Chapter II

SPECIFIC PROVISIONS

Section 1

COLLECTION OF LAND USE FEES, LAND RENTAL FEES, AND WATER SURFACE RENTAL FEES

IN ECONOMIC ZONES

Article 3. Determination of Land Use Fees

The determination of land use fees for cases where the State allocates land with payment of land use fees, changes the purpose of land use, or transfers the right to use land within Economic Zones for implementing commercial housing projects for sale or sale combined with lease according to planning; or where the State allocates residential land, recognizes the right to use residential land, or permits the change of land use purpose to residential land for households and individuals within Economic Zones shall be carried out in accordance with the provisions of Government Decree No. 45/2014/ND-CP dated May 15, 2014 on the collection of land use fees and subsequent amendments and supplements (if any).

Article 4. Determination of Land Rental Fees in Economic Zones

1. In cases where the State leases land annually without using auction methods as prescribed by law, the annual land rental fee rate is determined by multiplying (x) the specific land price for land rental fee collection by a percentage (%). Specifically:

a) The percentage (%) for determining the land rental fee rate ranges from 0.5% to 3%. Provincial People's Committees (hereinafter referred to as Provincial People's Committee) shall specify concretely according to each location, area, and road corresponding to each land use purpose according to the approved planning by competent state authorities and publicly announced during implementation.

b) The specific land price for land rental fee collection is determined based on the land price adjustment coefficient method prescribed in the Government's Decree on land prices.

c) The land price adjustment coefficient to determine the specific land price is issued annually by the Provincial People's Committee according to each location, area, and road corresponding to each land use purpose; it is publicly announced during implementation and applied from January 1st of each year.

d) Based on the detailed planning of each functional zone within Economic Zones already approved by competent state authorities, the Provincial People's Committee shall stipulate land prices according to each area, road, and location corresponding to each land use purpose and update them into the Land Price Table.

2. The land rental fee rate for cases where land is leased annually without using auction methods is stabilized for five years from the date the Management Board of the Economic Zone decides to lease the land or the Provincial People's Committee decides to lease the land. At the end of the stabilization period, the Management Board of the Economic Zone adjusts the land rental fee rate for the subsequent period according to the policy and land prices at the time of adjustment.

3. In cases where the State leases land in one lump sum for the entire lease period without using auction methods as prescribed by law, the land rental fee rate collected in one lump sum for the entire lease period is the specific land price corresponding to the lease term and is determined as follows:

a) In cases where the area subject to land rental fee collection of a plot or area of land has a value (calculated based on the land price in the Land Price Table) of 30 billion VND or more, the specific land price for land rental fee collection is determined through direct comparison, deduction, income, and surplus methods. The determination of the specific land price for land rental fee collection in this case is carried out in accordance with the provisions of the Government's Decree on land prices.

b) In cases where the area subject to land rental fee collection of a plot or area of land has a value (calculated based on the land price in the Land Price Table) less than 30 billion VND, the specific land price for land rental fee collection is determined through the land price adjustment coefficient method. If the lease term is shorter than the term of the land type specified in the Land Price Table, the land price to determine the land rental fee rate is calculated using the following formula:

4. In cases where the State leases land through auction methods as prescribed by law

a) In cases of auctioning land rental rights annually, the starting price for the auction of land use rights is the annual land rental fee rate determined by the Management Board of the Economic Zone according to the land price adjustment coefficient method and approved after obtaining the unified opinion of the Department of Finance. The Department of Finance provides comments on the starting price within five days from the date of receipt of the request letter from the Management Board of the Economic Zone. The annual land rental fee rate to determine the annual land rental fee payable is the winning bid rate.

The winning bid rate is stable for ten years. At the end of the stability period, adjustments to the land rental fee rate are made according to the policy on land rental fee collection for cases where land is leased annually without using auction methods; the adjustment level does not exceed 30% of the winning bid land rental fee rate or the land rental fee rate of the previous stability period.

b) In cases of auctioning land rental rights in one lump sum for the entire lease period, the starting price for the auction of land use rights is the specific land price for land rental fee collection in one lump sum corresponding to the lease term and is determined as follows:

- In cases where the area subject to land rent payment of the plot or auctioned land has a value (calculated based on the land price in the Land Price Table) of VND 30 billion or more, the initial land price for auctioning the right to use land shall be the specific land price determined by the Department of Natural Resources and Environment using direct comparison, residual, income, and cost approaches, and submitted to the Appraisal Council chaired by the Department of Finance for appraisal, which then reports to the Provincial People's Committee for approval.

- In cases where the area subject to land rent payment of the plot or auctioned land has a value (calculated based on the land price in the Land Price Table) below VND 30 billion, the initial land price for auctioning the right to use land shall be the specific land price determined by the Management Board of the Economic Zone using the land price adjustment factor method, and approved after receiving the unified opinion of the Department of Finance. The Department of Finance shall provide comments on the initial price within five days from the date of receipt of the request letter from the Management Board of the Economic Zone. The land price for determining the total land rent payable over the entire lease period shall be the auction-winning land price.

5. Based on the specific land price decided by the Provincial People's Committee, the land price in the Land Price Table, the land price adjustment factor, and the percentage rate to determine the annual land rent unit price and the auction-winning price for the case of leasing land through auction, the Management Board of the Economic Zone shall determine and announce the amount of land rent payable.

In cases where at the time of determining the land rent unit price or adjusting the land rent unit price or determining the initial price for auctioning the right to use leased land according to the land price adjustment factor method, if the Provincial People's Committee has not issued the land price and the land price adjustment factor in the Economic Zone as prescribed, the previously issued land price and land price adjustment factor of the previous year shall be applied for determination. The Provincial People's Committee shall be responsible for any loss of state budget revenue due to the delay in issuing the land price and the land price adjustment factor (if applicable).

6. In cases where the State leases land with water surface in the Economic Zone, the land rent shall be determined as follows:

a) For the area of land without water surface, the land rent shall be determined in accordance with Clause 1, Clause 2, and Clause 3 of this Article.

b) For the area of land with water surface, the land rent shall be determined at no less than 50% of the land rent payable for the area of land without water surface or for the type of land adjacent with the same purpose of use as stipulated in Point a of this Clause.

c) The Provincial People's Committee shall specify the collection rate for determining the land rent with water surface as stipulated in Point b of this Clause.

7. The Ministry of Finance shall provide detailed guidance on this Article.

Article 5. Determination of Water Surface Rent in the Economic Zone

1. The framework for water surface rent in the Economic Zone for water surfaces not falling under the scope specified in Article 10 of the Land Law is as follows:

a) Fixed water surface projects: From VND 20,000,000/km/year to VND 300,000,000/km/year²from one billion to three hundred million VND per kilometer per year²2. In the event that the Approval Letter is revoked, the project developers shall only be considered for issuance of a new Approval Letter after one (01) year from the date of revocation, if they have fully fulfilled all obligations related to the reasons for the previous revocation of the Approval Letter.

b) Non-fixed water surface projects: From VND 100,000,000/km/year to VND 750,000,000/km/year²from one billion to seven hundred fifty million VND per kilometer per year²2. In the event that the Approval Letter is revoked, the project developers shall only be considered for issuance of a new Approval Letter after one (01) year from the date of revocation, if they have fully fulfilled all obligations related to the reasons for the previous revocation of the Approval Letter.

2. Based on the framework for water surface rent stipulated in Clause 1 of this Article, the Provincial People's Committee shall decide the specific water surface rent unit price for each project as the basis for the Management Board of the Economic Zone to announce the amount of water surface rent payable.

3. The Ministry of Finance shall provide detailed guidance on this Article.

Article 6. Handling of compensation and land clearance funds in Economic Zones

1. In cases where the State reclaims land and compensation and land clearance funds are allocated from the state budget:

a) In cases not eligible for exemption or reduction of land use fees or land rental fees according to investment laws, there is no need to refund the state budget for compensation and land clearance costs.

b) In cases where land use fees or land rental fees for the entire lease period are exempted according to investment laws or where land is granted without payment of land use fees, the entity must refund the state budget for compensation and land clearance costs determined in accordance with point d of this clause and such costs shall be included in the project's investment capital.

c) In cases where land use fees are reduced or land rental fees are exempted for certain years or reduced according to investment laws, the entity must refund the state budget for compensation and land clearance costs determined in accordance with point d of this clause and such costs shall be deducted from the land use fees or land rental fees payable.

The amount of compensation and land clearance costs refunded in cases of annual land rental payments shall be converted into the time required to fulfill financial obligations regarding land rental fees according to policy and land prices at the time of the State's decision to lease the land.

d) Compensation and land clearance costs that organizations and individuals must refund shall be determined as follows:

- In cases where the compensation and land clearance plans are established and approved corresponding to each plot of land, area, or construction project within the Economic Zone, the entity receiving land from the State must refund compensation and land clearance costs according to the plan approved by the competent state authority.

- In cases where the compensation and land clearance plans are established and approved according to functional zones or the entire Economic Zone without being able to separate the compensation and land clearance costs corresponding to each area of land assigned to organizations and individuals, the compensation and land clearance costs that organizations and individuals must refund shall be determined as follows:

e) The Management Board of the Economic Zone determines and announces the amount of compensation and land clearance costs that organizations and individuals leasing land from the State must refund according to this clause and implements collection as follows:

Any remaining compensation and land clearance costs shall continue to be allocated to organizations and individuals leasing land from the State or subsequent lease periods if the State extends the land use period according to land management laws.

e) The Management Board of the Economic Zone determines and announces the amount of compensation and land clearance costs that organizations and individuals leasing land from the State must refund according to this clause and implements collection as follows:

- Within thirty days from the date of signing the Notification of the Management Board of the Economic Zone, the land user must pay at least fifty percent of the amount stated in the Notification.

- Within the following sixty days, the land user must pay the remaining amount stated in the Notification.

- If the land user fails to pay the full amount stated in the Notification of the Management Board of the Economic Zone beyond the specified deadline, they must pay an additional amount equivalent to the late payment fee stipulated by tax management laws.

2. In cases where land is transferred or leased without public auction and organizations and individuals voluntarily advance compensation and land clearance funds according to the plan approved by the competent state authority, the advanced funds shall be handled as follows:

a) The advanced funds can be deducted from the land use fees or land rental fees payable according to the plan approved by the competent state authority; the deduction amount cannot exceed the payable land use fees or land rental fees. For any remaining compensation and land clearance costs not deducted from the payable land use fees or land rental fees (if any), such costs shall be included in the project's investment capital.

b) In cases of annual land rental payments, the advanced compensation and land clearance funds according to the plan approved by the competent state authority shall be deducted from the payable land rental fees, converted according to policy and land prices at the time of the State's decision to lease the land, and determined as the time already completed for annual land rental fee payments.

c) The Management Board of the Economic Zone determines the amount of compensation and land clearance funds to be deducted from land use fees or land rental fees according to this clause together with determining and announcing the land use fees or land rental fees payable by the land user.

d) The application for deducting compensation and land clearance funds from land use fees or land rental fees submitted to the Management Board of the Economic Zone includes the following documents:

- A document from the land user requesting the deduction of compensation and land clearance funds from payable land use fees or land rental fees (original).

- The compensation and land clearance plan approved by the competent state authority (copy).

- The decision approving the final settlement of compensation and land clearance costs by the competent state authority (copy).

Article 7. Exemption and reduction of land use fee in Economic Zones

1. Exemption from land use fees for projects assigned land with payment of land use fees by the State in Economic Zones to invest in building social housing for workers' living according to planning approved by competent state authorities. The investor shall follow procedures to be exempted from land use fees as follows:

a) Within ten days from the date of the decision on land allocation, the investor who is allocated land by the State shall submit the application for exemption from land use fees to the Management Board of the Economic Zone. Within fifteen days from the date of receiving complete application for exemption from land use fees, the Management Board of the Economic Zone shall determine and issue a decision on exemption from land use fees in accordance with regulations.

b) Documents for exemption from land use fees include:

- A request for exemption from land use fees, clearly stating the area of land allocated and the reasons for exemption (original).

- An investment project for constructing social housing approved by competent state authorities in accordance with laws on investment and housing (copy).

- Decision on land allocation by competent state authorities (copy).

2. The exemption and reduction of land use fees for projects constructing cemetery infrastructure, family households, and individuals when allocated residential land, recognized rights to residential land, or allowed to change land use purposes to residential land in Economic Zones shall be implemented in accordance with Decree No. 45/2014/NĐ-CP dated May 15, 2014 of the Government on land use fees and subsequent amendments and supplements (if any).

3. Exemption and reduction of land use fees shall not apply to projects assigned land with payment of land use fees by the State in Economic Zones to invest in building commercial housing for sale or for sale combined with rental.

Article 8. Exemption and reduction of land lease fees and water surface lease fees

1. Exemption and reduction of land lease fees and water surface lease fees shall be carried out on a project-by-project basis linked to new land leasing.

2. Exemption and reduction of land lease fees and water surface lease fees shall not apply to mineral resource exploitation projects.

3. Organizations and individuals leasing land and water surfaces in Economic Zones shall only enjoy exemptions and reductions of land lease fees and water surface lease fees after completing procedures to be exempted or reduced in accordance with regulations.

4. In cases where the State leases land annually and the lessee is enjoying exemptions and reductions, if the lessee transfers the project or transfers assets on the leased land in accordance with the law, and the transferee or buyer of the asset on the land continues to lease the land for the remaining period with the original purpose of land use, the exemption and reduction of land lease fees shall be implemented as follows:

a) The transferor shall not include the amount of land lease fees already exempted or reduced in the transfer price.

b) The transferee shall continue to enjoy exemptions and reductions of land lease fees and water surface lease fees for the remaining preferential period.

If the transferee does not continue to use the land for the original purpose after the transfer but changes the use to another purpose, they must fulfill financial obligations as stipulated in Articles 4 and 5 of this Decree.

5. In cases where the lessee has been decided by competent state authorities to be exempted or reduced from land lease fees and water surface lease fees in accordance with this Decree, but during the management and use of the land, they fail to meet the conditions for exemption and reduction of land lease fees and water surface lease fees due to reasons from the lessee or improper use of the land contrary to the purpose specified in the land lease decision or land lease contract, but not falling under the circumstances subject to land recovery according to the law on land, they must repay the state budget the amount of land lease fees and water surface lease fees that have been exempted or reduced, plus an additional amount equivalent to the late payment fee stipulated by the law on tax administration calculated based on the amount of land lease fees and water surface lease fees that have been exempted or reduced.

6. Specific levels of exemption and reduction of land lease fees are as follows:

a) Exemption from land lease fees during the construction period, but not exceeding three years from the date of the decision on land leasing by competent state authorities (excluding cases of investment in improving and expanding production and business facilities).

b) Exemption from land lease fees after the construction period exemption period (except for cases stipulated in point d of this clause):

- Eleven years for investment projects not included in the list of preferential investment sectors invested in Economic Zones located in districts not listed in the preferential investment areas.

- Thirteen years for investment projects not included in the list of preferential investment sectors invested in Economic Zones located in districts in areas with difficult socio-economic conditions.

- Fifteen years for investment projects not included in the list of preferential investment sectors invested in Economic Zones located in districts in areas with extremely difficult socio-economic conditions; investment projects included in the list of preferential investment sectors invested in Economic Zones located in districts not listed in the preferential investment areas.

- Seventeen years for investment projects included in the list of preferential investment sectors invested in Economic Zones located in districts in areas with difficult socio-economic conditions.

- Nineteen years for investment projects included in the list of preferential investment sectors invested in Economic Zones located in districts in areas with extremely difficult socio-economic conditions.

The list of preferential investment sectors, particularly preferential investment sectors, areas with difficult socio-economic conditions, and areas with extremely difficult socio-economic conditions in this Decree shall be implemented in accordance with the law on investment.

c) Exemption from land lease fees and water surface lease fees for the entire lease period (except for cases stipulated in point d of this clause):

- Investment projects in particularly preferential investment sectors.

- Investment projects for constructing housing for workers and employees within Economic Zones or leasing land from investors to build and operate infrastructure within Economic Zones according to approved planning by competent state authorities; the investor shall not include land lease costs in the rental price of housing.

- Land for constructing public works of public organizations within Economic Zones.

- Land for constructing maintenance stations, repair facilities, parking lots (including ticket sales areas, management and operation zones, public service areas) serving public passenger transport activities within Economic Zones as prescribed by laws on road transport.

- Land for constructing water supply works within Economic Zones including: Water extraction, treatment works, pipelines, and structures on the water supply network, and supporting management and operation works of the water supply system (administrative buildings, management and operation centers, workshops, storage areas for materials and equipment).

d) Investors who are leased land by the State to invest in and operate functional area infrastructure within Economic Zones shall be exempted from land lease fees after the construction period specified in point a of this clause, specifically as follows:

- 11 years if investing in a district not included in the list of investment incentive areas.

- 15 years if investing in a district included in the list of districts with difficult economic and social conditions.

- The entire lease period if investing in a district included in the list of districts with extremely difficult economic and social conditions.

In cases where an Economic Zone spans multiple districts, the land lease exemption benefits will be determined based on the corresponding area in each district.

7. In cases where organizations or individuals temporarily suspend investment projects due to force majeure while leasing land for production and business operations within Economic Zones, they shall be exempted from land lease fees during the suspension period.

8. Organizations and individuals leasing land within Economic Zones to implement investment projects must submit applications for exemption or reduction of land lease fees to the Management Board of the Economic Zone within ten days from the date of the land lease decision. Within fifteen days from the date of receiving complete exemption or reduction applications, the Management Board of the Economic Zone shall determine and issue decisions on exemption or reduction of land lease fees as prescribed. The exemption period starts from the date of the land lease decision. In cases of delayed procedures for exemption or reduction of land lease fees, the delayed period shall not be exempted or reduced.

9. Organizations and individuals currently leasing land for annual payment within Economic Zones before this Decree takes effect, which have higher land lease fee exemption benefits under existing laws than those stipulated in Clause 6 of this Article, shall continue to enjoy such benefits for the remaining lease period. If the existing benefits are lower than those stipulated in Clause 6 of this Article, they shall be adjusted and applied for the remaining lease period.

10. In cases where organizations or individuals lease land within Economic Zones to implement socialized projects in education, vocational training, healthcare, culture, sports, and environmental fields, the preferential exemptions or reductions of land lease fees shall be applied according to the Government's policies encouraging socialization in these fields.

11. Applications for exemption or reduction of land lease fees within Economic Zones are regulated as follows:

a) Dossier for exemption of land rental fees during the basic construction period

- Application for exemption of land lease fees during the basic construction period; specifying: Leased land area, lease term; reasons for exemption and exemption period (original).

- Investment Certificate, Investment License, Investment Registration Certificate, Decision on Investment Policy (except in cases where such certificates are not required according to investment laws) (copy).

- Decision on land lease issued by the competent state authority (copy).

- Approved investment project according to investment laws as the basis for land lease by the State (copy).

b) Dossier for exemption or reduction of land rental fees as prescribed by laws on investment

- Application for exemption or reduction of land lease fees, specifying: Leased land area, lease term; reasons for exemption or reduction and exemption or reduction period (original).

- Investment Certificate, Investment License, Investment Registration Certificate, Decision on Investment Policy (except in cases where such certificates are not required according to investment laws and cases where land is transferred from non-payment to lease or from lease to exemption or reduction of land lease fees) (copy).

- Approved investment project according to investment laws (except in cases where land is transferred from non-payment to lease or from lease to exemption or reduction of land lease fees) (copy).

- Decision on land lease issued by the competent state authority (copy).

- Proof showing at least VND 60,000 billion has been disbursed over three years for cases exempted or reduced from land lease fees as stipulated in point c, Clause 2, Article 15 of the Investment Law (copy).

- Documents proving average annual employment of 500 people or more, confirmed by the competent labor management authority in the project implementation area, for cases exempted or reduced from land lease fees as stipulated in point d, Clause 2, Article 15 of the Investment Law (copy).

c) Application for exemption of land lease fees during temporary suspension of operations

- Application for exemption of land lease fees during temporary suspension of operations (original).

- Confirmation document from the investment registration authority regarding the temporary suspension period of the project (original).

- Decision on land lease issued by the competent state authority (copy).

12. The Prime Minister shall consider and decide on exemptions or reductions of land lease fees for other cases proposed by the Minister of Finance based on recommendations from ministers, heads of ministerial-level agencies, government-affiliated agencies, and provincial People's Committee Chairmen where Economic Zones are located.

Article 9. Collection of land rent when transferring from annual land rent payment to lump-sum payment for the entire lease period

1. A land user who is currently leasing land with annual rent payments and transfers to leasing with lump-sum payment for the entire lease period must pay the remaining land rent. The unit price for lump-sum payment of the remaining land use period shall be determined at the time of the decision allowing the transfer to lump-sum payment for the lease period and shall be calculated according to Clause 3, Article 4 of this Decree.

2. In cases where a land user has completed financial obligations for some years due to deductions from compensation and clearance fees prepaid against land rent payments under the law, and then transfers to leasing with lump-sum payment for the entire lease period, the remaining compensation and clearance fees corresponding to the converted period that have not yet been fully deducted will continue to be deducted to determine the amount of lump-sum land rent payable for the remaining lease period according to Clause 3, Article 4 of this Decree.

Article 10. Handling of Financial Obligations in Cases of Delay in Land Utilization

1. In cases where the State allocates or leases land within an Economic Zone but the land is not put into use or the utilization progress is delayed compared to the progress stated in the investment project, the entity receiving the land allocation or lease must pay the State an amount equivalent to the annual land rent for the period of delay. For cases where the State leases land, the amount payable to the State shall be calculated based on the annual land rent for the period from when the State leases the land until the formal decision to reclaim the land is made, minus the basic construction period determined by the competent authority when the lease was granted. The maximum deduction for the basic construction period does not exceed three years for cases where the State leases land before July 1, 2014, and does not exceed two years for cases where the State leases land from July 1, 2014 onwards.

2. The unit price for land rent to determine the amount payable according to Clause 1 of this Article shall be determined based on the land price in the Land Price Table, the adjustment factor for land prices, and the percentage rate (%) for calculating the unit price for land rent issued by the competent authority and applied within the Economic Zone.

Article 11. Collection and Payment of Land Use Fee and Land Rent

1. The land use fee and land rent paid to the state budget shall be in Vietnamese currency; in cases where foreign organizations, individuals, or overseas Vietnamese residents pay the land use fee and land rent in foreign currency, they shall convert it to Vietnamese currency according to the law at the time of payment.

2. The collection of land use fee and land rent shall be carried out as follows:

a) The Management Board of the Economic Zone shall notify the land user of the amount to be paid and simultaneously send the Notice to the Land Registration Office for coordination and submission to the competent authority to issue the Certificate of Land Use Right, Ownership of House and Other Immovable Property attached to the land.

b) The land user shall pay the land use fee and land rent into the state budget at the State Treasury or a unit authorized by the State Treasury to collect according to the Notice of the Management Board of the Economic Zone. In case of late payment beyond the deadline specified in the Economic Zone Management Board's Notice, the land user must pay late payment fees according to the law on tax management.

3. Time for Payment of Land Use Fee and Land Rent

a) For cases of leasing land with annual rent payments, the rent shall be paid in two installments each year: The first installment of at least 50% must be paid before May 31; the second installment of the remaining rent must be paid before October 31 each year. If the financial obligation regarding the land rent and water surface rent for the first year is determined from October 31 to December 31 of the year, the Economic Zone Management Board shall issue a Notice to pay the remaining rent for the year, and the payment deadline for the first year shall be 30 days from the date of issuance of the Notice.

b) For cases of allocating land with land use fee collection and leasing land with lump-sum payment for the entire lease period:

- Within 30 days from the date of issuance of the Notice by the Economic Zone Management Board, the land user must pay 50% of the land use fee and land rent according to the Notice.

- Within the following 60 days, the land user must pay the remaining 50% of the land use fee and land rent according to the Notice.

c) Beyond the deadlines stipulated in points a and b of this clause, if the land user has not paid the full amount according to the Notice, they must pay late payment fees for the unpaid amount according to the law on tax management.

4. The land use fee, land rent, and water surface rent in the Economic Zone shall be collected, managed, and used according to the law on the state budget.

5. In cases where disputes arise regarding the land use fee and land rent, during the waiting period for resolution according to the law, the complainant must pay the full amount of the land use fee and land rent as notified within the stipulated time.

6. The procedures and formalities for receiving and circulating documents to determine the financial obligations of land users in the Economic Zone shall be implemented according to the regulations of the Government.

Section 2

COLLECTION OF LAND RENT AND WATER SURFACE RENT

IN THE HIGH-TECH ZONE

Article 12. Determination of land rent and water surface rent in the High-Tech Zone°

1. In cases where land is rented annually, the rental price per unit area of land shall be determined by multiplying (x) the specific land value for land rent collection by a percentage rate (%). Specifically:

a) The percentage rate (%) for determining the rental price per unit area of land ranges from 0.5% to 3%, which is specified by the People's Committee of the province according to each area, road, and investment sector, and must be publicly announced annually during implementation.

b) The specific land price for land rental fee collection is determined based on the land price adjustment coefficient method prescribed in the Government's Decree on land prices.

c) The adjustment factor for determining the specific land value is issued annually by the People's Committee of the province according to each area, road, location, and land use purpose, but it must not be less than 1.0 and shall apply from January 1st of each year.

d) Based on the detailed planning of the High-Tech Zone that has been approved by competent state authorities, the People's Committee of the province shall specify the land price according to each area, road, location, and land use purpose, and update it in the Land Price Table.

đ) The annual rental price per unit area of land shall remain stable for five years from the date the Management Board of the High-Tech Zone leases the land. Upon expiration of this period, the Management Board of the High-Tech Zone shall adjust the rental price per unit area of land for the subsequent period based on policy and land prices at the time of adjustment.

e) The People's Committee of the province where the High-Tech Zone is located shall issue the percentage rate (%) for determining the rental price per unit area of land and the adjustment factor for land prices as stipulated in points a and c of this clause. For the High-Tech Zones under central management that were assigned land before July 1, 2014, the percentage rate (%) for determining the rental price per unit area of land and the adjustment factor for land prices shall be issued by the Management Board of the High-Tech Zone after obtaining the agreement of the People's Committee of the province where the High-Tech Zone is located, and shall apply from January 1st of each year.

g) In cases where the competent state authority has not yet issued the land price and the adjustment factor for land prices applicable in the High-Tech Zone at the time of determining the rental price per unit area of land or adjusting the rental price per unit area of land, the provisions of Clause 5, Article 4 of this Decree shall be implemented.

2. In cases where land is rented for a lump sum payment covering the entire lease period for non-agricultural production and business purposes (excluding land used for commercial trade and service activities; commercial housing and office leasing), the rental price per unit area of land for a lump sum payment covering the entire lease period shall be the specific land value corresponding to the lease term determined by the land price adjustment factor method. The land price adjustment factor for calculating the land use fee is the factor issued according to point e of Clause 1 of this Article. If the lease term is shorter than the lease term specified in the Land Price Table, the land price for determining the rental price per unit area of land shall be calculated using the following formula:

In cases where land is leased for commercial trade and service activities; commercial housing and office leasing according to the planning approved by the competent state authority, the specific land value for calculating the land rent shall be determined according to Clause 3, Article 4 of this Decree.

3. Leasing land in the High-Tech Zone does not have to be conducted through public auction of land use rights. In cases where two or more investors meet all criteria stipulated to invest in the High-Tech Zone and simultaneously register to choose the same location to implement their investment projects, a public auction of land use rights for leasing land must be conducted in accordance with the law.

4. The determination of water surface rent in the High-Tech Zone shall be carried out according to the provisions of Article 5 of this Decree.

5. The Ministry of Finance shall provide detailed guidance on this matter.

Article 13. Handling of Land Compensation and Surface Clearance Funds in High-Tech Zones

1. In cases where the State reclaims land and the compensation and surface clearance funds are allocated from the state budget, the land users who are granted land without payment of land use fees or leased land within the High-Tech Zone must repay to the state budget the compensation and surface clearance funds, except for the following cases:

a) Leasing land on an annual basis and belonging to the category eligible for exemption or reduction of land lease fees but voluntarily waiving such benefits.

b) Using land and water bodies to construct transportation works, technical infrastructure, green areas, and public parks according to the general planning and detailed construction planning.

c) The Management Board of the High-Tech Zone and its subordinate units using land to construct office premises, public works, and facilities serving the management and exploitation of the High-Tech Zone's infrastructure.

d) Being granted land without payment of land use fees or leasing land with exemption of land lease fees for the entire lease period and having been handed over land by the Management Board of the High-Tech Zone before July 1, 2014.

2. The amount of compensation and surface clearance funds that land users must repay to the state budget shall be determined according to the provisions of points b, c, d, and e of Clause 1, Article 6 of this Decree by the Management Board of the High-Tech Zone and notified.

In cases where the High-Tech Zone is under central management and the compensation and surface clearance funds are allocated from the central budget, the amount of compensation and surface clearance funds that land users must repay according to the regulations shall be paid into the central budget.

The deadline for repaying the state budget the compensation and surface clearance funds shall be implemented according to the provisions of point e of Clause 1, Article 6 of this Decree.

3. In cases where land users advance the compensation and surface clearance funds according to the plan approved by the competent state agency to cooperate with the Management Board of the High-Tech Zone in implementing compensation and surface clearance, they may deduct the advanced amount from the land lease fees payable according to the provisions of points a and b of Clause 2, Article 6 of this Decree. The amount of compensation and surface clearance funds deducted from the land lease fees payable shall be determined by the Management Board of the High-Tech Zone together with the determination and notification of the land lease fees payable.

4. The application dossier for deducting compensation and surface clearance funds from land lease fees as stipulated in Clause 3 of this Article shall be submitted to the Management Board of the High-Tech Zone and shall include the following documents:

a) A letter from the land user requesting to deduct compensation and surface clearance funds from the land lease fees payable (original).

b) The compensation and surface clearance plan approved by the competent state agency (copy).

c) The decision approving the final settlement of compensation and surface clearance costs issued by the competent state agency (copy).

Article 14. Exemption and Reduction of Land Lease Fees in High-Tech Zones

1. The principle of exemption and reduction of land lease fees in High-Tech Zones shall be implemented according to the provisions of Clauses 1, 3, 4, and 5 of Article 8 of this Decree.

2. Full exemption of land lease fees for the entire lease period applies in the following cases:

a) Land for constructing transportation works and technical infrastructure, green areas, water bodies, and public parks according to the general planning and detailed planning approved.

b) Land for constructing public works of public organizations.

c) Land for establishing high-tech human resource training bases as prescribed by laws on high technology.

d) Land for implementing housing projects for experts and workers when working at the High-Tech Zone according to the planning approved by the competent state agency.

đ) Projects included in the List of Priority Investment Fields (excluding projects investing in and operating infrastructure in the High-Tech Zone);

3. The level of preferential exemptions and reductions of land lease fees for cases not covered by Clause 2 of this Article is specified as follows:

a) Exemption of land lease fees during the basic construction period but not exceeding three years from the date of the land lease decision (excluding cases of investment in the renovation and expansion of production and business facilities).

b) Exemption of land lease fees after the basic construction period exemption period:

- Fifteen years for investment projects not included in the Priority Investment Fields List; projects for constructing and operating infrastructure in the High-Tech Zone.

- Nineteen years for projects included in the Priority Investment Fields List.

c) In cases where organizations or individuals temporarily suspend investment projects due to force majeure while leasing land for production and business purposes, they are exempted from land lease fees during the suspension period.

The Priority Investment Fields List and the Particularly Priority Investment Fields List shall be implemented according to the laws on investment.

4. Land users leasing land in the High-Tech Zone to implement investment projects must submit an application for exemption and reduction of land lease fees to the Management Board of the High-Tech Zone within ten days from the date of the land lease decision. Within fifteen days from the date of receiving the complete application for exemption and reduction of land lease fees, the Management Board of the High-Tech Zone shall determine and issue a decision on exemption and reduction of land lease fees according to the regulations. The exemption period starts from the date of the land lease decision. If the procedures for exemption and reduction of land lease fees are delayed, the delay period will not be exempted from land lease fees.

5. In cases where land users lease land in the High-Tech Zone to implement socialized projects in education, vocational training, healthcare, culture, sports, and environment, the preferential levels of exemption and reduction of land lease fees shall be applied according to the Government's policies encouraging socialization in these fields.

6. The application for exemption and reduction of land lease fees is stipulated as follows:

a) An application requesting exemption or reduction of land rent, clearly stating: The area of leased land, lease term; reasons for exemption or reduction and duration of exemption or reduction of land rent (original copy);

b) Decision on granting land lease issued by the competent state agency (copy);

c) Minutes confirming the period of temporary cessation of operations by the Management Board of the High-Tech Zone for cases requesting exemption from land rent during the period of temporary cessation of operations (copy);

Article 15. Determination and Notification of Land Rent in the High-Tech Zone

1. The financial obligation regarding land rent of the lessee shall be determined at the time of issuance of the land lease decision by the Management Board of the High-Tech Zone. In cases where the land has been used before this Decree takes effect but there is no land lease decision, the financial obligation regarding land rent of the lessee shall be calculated from the date of actual handover of the land.

2. The Management Board of the High-Tech Zone shall determine the amount of land rent for each project and issue a notification of land rent to be paid by the lessee. At the same time, send the Notification to the Land Registration Office.

3. When transitioning from annual payment of land rent to lump-sum payment for the entire lease period, the amount of land rent to be paid shall be determined in accordance with Article 9 of this Decree.

4. In cases where the State leases land in the High-Tech Zone but the land is not put into use or the progress of land use is delayed compared to the progress stipulated in the investment project, the lessee must pay to the State an amount equivalent to the annual land rent for the period of delay, as specified in Article 10 of this Decree.

5. Collection and payment of land rent in the High-Tech Zone shall be carried out in accordance with Article 11 of this Decree.

6. The procedures and formalities for receiving and circulating documents to determine the financial obligations regarding land of land users in the High-Tech Zone shall be implemented in accordance with the regulations of the Government.

Article 16. Transitional Provisions

1. In cases where the State leases land or water surface in economic zones or high-tech zones before the effective date of this Decree and is currently in the period of stabilizing the unit price of land rent, continue to stabilize the unit price of land rent until the end of the stabilization period. If the unit price of land rent during the stabilization period is higher than the provisions of this Decree, it will be adjusted according to this Decree from January 1, 2017.

2. In cases where the State leases land or water surface in economic zones or high-tech zones and the adjustment of the unit price of land rent or water surface rent was scheduled before the effective date of this Decree but had not yet been implemented, such adjustments shall be made in accordance with this Decree for the remaining lease period. For the period of land use that has already occurred but the unit price of land rent has not yet been adjusted, adjustments shall be made according to the policies and laws of each period to complete the settlement and finalization of land rent.

3. In cases where the State leases land or water surface in economic zones or high-tech zones before the effective date of this Decree and has already paid the lump sum land rent for the entire lease period, the unit price of land rent or water surface rent shall not be re-determined in accordance with this Decree.

4. In cases where the State leases land in economic zones or high-tech zones before the effective date of this Decree and is currently enjoying preferential exemptions or reductions in land rent or water surface rent under laws providing more favorable conditions than this Decree, such preferential rates shall continue to apply for the remaining period; if the preferential rate is lower than the provisions of this Decree, the preferential rate provided in this Decree shall apply for the remaining preferential period from the effective date of this Decree.

5. In cases where land users have used land in economic zones or high-tech zones before the effective date of this Decree but have not received a land lease decision and have not paid land rent due to the lack of specific policies on land rent collection at the time of leasing:

a) They shall enjoy preferential exemptions or reductions in land rent and are not required to repay compensation or clearance costs if they fall within the scope defined in this Decree from the date of actual handover of the land.

b) They shall repay compensation or clearance costs upon receipt of the land lease decision. The amount of compensation or clearance costs to be repaid shall be converted into the number of years or months to fulfill the financial obligation regarding land rent according to the land price policy at the time of issuance of the land lease decision.

6. The Ministry of Finance shall provide guidance on transitional measures in implementing land use fee and land rent collection policies in economic zones and high-tech zones established before the effective date of this Decree.

Chapter III

IMPLEMENTING PROVISIONS

Article 17. Effective Date and organizing implementation

1. This Decree shall take effect from June 20, 2017.

2. Abolish Clause 4, Article 19, Clause 2, Article 20 of Decree No. 46/2014/NĐ-CP of the Government on land rent and water surface rent collection; abolish the phrase "economic zones, high-tech zones" in Clause 6, Article 3 of Decree No. 135/2016/NĐ-CP dated September 9, 2016 of the Government amending and supplementing certain articles of decrees on land use fees, land rent, and water surface rent collection.

3. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees directly under the central government, and those who are granted land or leased land by the State in economic zones and high-tech zones are responsible for implementing this Decree./.