Circular No. 53-TC/TCT guiding the implementation of the Land and House Tax Ordinance issued by the State Council and the Decree on Land and House Tax issued by the Council of Ministers

CIRCULAR

OF THE MINISTRY OF FINANCE NO. 53-TC/TCT SEPTEMBER 28, 1991
GUIDELINES FOR IMPLEMENTING LEGAL INSTRUMENTS OF THE STATE COUNCIL
AND THE DECREES OF THE COUNCIL OF MINISTERS ON LAND AND HOUSE TAX

Pursuant to the Land and House Tax Ordinance dated June 29, 1991, promulgated by Resolution No. 54 LCT/HĐNN 8 on July 1, 1991 of the State Council, and Decree No. 270-HĐBT dated September 14, 1991 of the Council of Ministers detailing the implementation of the Land and House Tax Ordinance, the Ministry of Finance hereby provides guidance as follows:

I - SCOPE OF APPLICATION

1. Tax Object: The land and house tax is levied on houses and residential land, construction land.

a) Regarding houses: This includes residential houses, working houses of economic organizations, business establishments, houses used for production and business activities (factories, warehouses, hotels, shops...), and houses used for other purposes, including ancillary structures.

b) Regarding land and the entire area of land within the scope of use by individuals and organizations (regardless of whether there is a permit for use or not), specifically:

- Residential land, including: land with houses built, land without houses built, land for ponds and gardens (not subject to agricultural tax), roads, or vacant land around houses...

- Construction land, including: land for constructing facilities serving production and business activities (including internal roads within a unit), regardless of whether the construction is ongoing, completed, or has been permitted but not yet constructed by economic sectors and units of all forms of ownership.

2. Taxpayers as stipulated in Article 2 of Decree No. 270-HĐBT dated September 14, 1991 of the Council of Ministers include all individuals, including workers, civil servants, defense and security personnel... who own private houses or have purchased houses at valuation prices from various sources, collective organizations, agencies, enterprises, schools, armed forces, political and social organizations, etc., who have ownership rights over houses or usage rights over land (collectively referred to as house and land owners). In specific cases, the following applies:

a) Houses and lands managed by housing management agencies or enterprises renting houses and lands to officials, employees, and the public at agreed prices close to market rates, the housing management agency, part of which is rented out. To strictly manage tax collection and effectively prevent revenue loss, especially regarding expanded areas (widened, extended, encroached upon, etc.), tenants may pay the house and land tax on behalf of the house and land owner, with rent paid for the rented area deducted from the house and land tax.

For houses and lands managed by housing management agencies or enterprises renting to the public at subsidized prices, tenants must pay the tax on behalf of the housing management agency and can deduct a portion of the house and land tax already paid from the rent payable to the housing management agency.

b) Houses and lands distributed by agencies, enterprises, and social organizations, national defense and security units to employees and military personnel (or rented at subsidized prices), those receiving distribution (or rental) must pay the excess house and land tax over state standards as specified in Decision No. 150-CP dated June 10, 1977 of the Government Council and Article 6 of Decision No. 162-HĐBT dated October 18, 1988 of the Council of Ministers; if there is expansion or renovation, the additional area must be included in the taxable area.

For houses and lands made, purchased at valuation price, or inherited by officials, employees, and military personnel, they are exempt from tax on the standard house and land not distributed according to Decision No. 150-CP, while the remaining part must be taxed.

c) Houses and lands entrusted for management and use, the individual or organization receiving the trust must pay the tax.

d) Houses and lands mortgaged, the house and land owner still must pay the tax.

e) Houses and lands confiscated for handling violations of the law, the agency managing the confiscated houses and lands must pay the tax.

g) Houses and lands where there is a dispute over ownership or usage rights, the individual or organization currently using and managing the houses and lands must pay the tax.

h) In cases where ownership or usage rights of houses and lands are not clearly defined, including cases of unauthorized construction, the individual or organization currently using the houses and lands must pay the house and land tax.

In these cases, paying the house and land tax does not imply recognition of the legality of ownership or usage rights of houses and lands.

i) Houses and lands leased to individuals and organizations of foreign countries (including foreign-invested enterprises), the house and land owner must pay the house and land tax (except when required to pay on behalf), while the lessee only pays the lease fee.

When Vietnam contributes legally required capital through land usage rights into joint ventures with foreign countries, Vietnam must pay the land tax.

For residential houses, working houses, and houses used for production and business activities of foreign-invested enterprises (including wholly foreign-owned enterprises and joint ventures), all must pay the house tax as prescribed by the Land and House Tax Ordinance and related government guidelines.

3. No land and house tax shall be levied on the following objects:

a) Rural houses, except houses along national highways, provincial roads, and main transportation routes in plains and midlands where commercial and service activities take place (including houses with service businesses and houses without service businesses) are all subject to land and house tax.

Provincial People's Committees shall specify the rural areas along national highways, provincial roads, and main transportation routes that are subject to land and house tax.

b) Land used for public purposes not belonging to any organization or individual for commercial use, such as: building roads (national highways, provincial roads, inter-district, inter-village roads...), bridges, culverts, parks, stadiums, dikes, water conservancy works, cemeteries, etc.

c) Houses and lands used as administrative and public service offices, social organizations, cultural, educational, health facilities, military camps; If used for business, the part used for business must be taxed.

d) Houses and lands exclusively used for religious worship, such as: Catholic churches, temples, communal houses, shrines, ancestral halls..., the part used for living must be taxed.

e) Houses and lands belonging to organizations or individuals used for public benefit without charging rent.

Houses and lands used by diplomatic agencies, organizations, and foreign individuals shall be subject to the Land and House Tax Law, except where international treaties to which Vietnam is a party provide otherwise.

II - BASIS FOR CALCULATING AND METHODS OF CALCULATING THE LAND AND HOUSE TAX

1. For cities, towns, and market towns: the basis for calculating the land and house tax is the area of houses, the area of land, the taxable value per square meter (m2) for each category of houses and land, and the tax rate.

The specific method of calculating the tax is as follows:

      Amount of                    Land Area (m                     Taxable

      house must       =          house subject to tax    x         tax per m2 x 0.3%

        submission                         (converted)                (for each category of house)

 

      Amount of                    Land Area (m                     Taxable value per m2

      land must       =          land subject to tax             x         each category of land x 0.5%

      for taxation                   (based on coefficients)

Pursuant to Article 5 of Decree No. 270-HĐBT dated September 14, 1991, the Ministry of Construction, Ministry of Finance, State Price Control Commission, and General Department of Land Management have issued a joint circular guiding the classification of categories of houses and land and the determination of taxable values for land and house taxes.

Provincial People's Committees directly under the Central Government shall establish a valuation committee for land and house taxes according to Article 6 of Decree No. 270-HĐBT, applying the joint circular to determine the categories of houses and land and the taxable values for land and house taxes in accordance with local realities.

The taxable value for land and house taxes shall be reviewed and adjusted every two years; when market prices fluctuate by 20% or more, adjustments must be made to align with actual conditions.

a) Area:

The area of houses is the actual area currently in use, including: main construction area (living, working, production, business, etc.) and auxiliary construction area (kitchen, toilet, bathroom, balcony, veranda, private corridor, etc.)

The area of land is the entire area currently managed and used, including the land foundation of houses.

b) The taxable value is the market price for each category of houses and land.

c) The tax rate for land and house taxes shall be implemented according to Article 10 of the Land and House Tax Ordinance and Article 7 of Decree No. 270-HĐBT dated September 14, 1991 of the Council of Ministers.

2. For residential land in rural areas:

The basis for calculating the tax on rural residential land is the area, category of land, and tax rate.

a) The area is determined based on the national land registry records; in places without such records, it is based on declarations and opinions of land management officials confirmed by the People's Committee of the commune.

b) The category of land for taxation is determined by the same category of agricultural land in the region. In cases where it is difficult to compare with equivalent agricultural land, the category of land for taxation is determined by the highest category of agricultural land tax in the village, hamlet, ward, or village.

c) The tax rate for rural residential land is implemented according to Article 11 of the Land and House Tax Ordinance and Article 8 of Decree No. 10-HĐBT dated September 14, 1991 of the Council of Ministers.

The People's Committee of the commune bases its determination of the category of residential land for each village, hamlet, ward, or village on the approved results of the agricultural land tax category by the People's Committee of the district currently being implemented in the locality, to serve as the basis for calculating the tax. The tax on residential land is calculated in rice and collected in cash at the local market price of rice at the time of collection, as decided by the People's Committee of the province or city.

III - DECLARATION AND PAYMENT OF THE LAND AND HOUSE TAX

1. Declaration of land and houses:

The declaration of land and houses is carried out in January each year according to the following regulations:

- The objects declaring land and houses include:

+ Individuals and organizations currently using land and houses, regardless of whether they are owners, managers, or tenants, must declare their land and houses.

+ Organizations managing land and houses, government agencies, enterprises, schools, military forces, security services, social organizations, etc., must declare the area of land and houses they are currently using, the area rented out at agreed prices close to market prices, and the undistributed housing fund or unrented land.

- The declaration form for land and houses, standardized by the Ministry of Finance, shall be prepared in duplicate and submitted to the direct tax authority. After review and approval by the tax authority, one copy will be retained as the basis for establishing the tax ledger, and the other copy will be returned to the declarant.

For state-owned enterprises with multiple architectural structures, separate declaration forms must be prepared for each structure.

If a single owner has multiple houses or lands in different locations, separate declarations must be prepared for each house. If the owner is a civil servant or employee exempt from tax according to Point 1, Section IV of this Circular, the declaration must be confirmed by the relevant authority regarding the total number of houses and the current total area. The exemption from tax will only apply at the place of permanent residence of the civil servant or employee.

The declarants mentioned above must provide necessary documents related to the calculation of the land and house tax upon request by the tax authority.

Each tax authority must complete the tax ledger for each ward or commune by the end of the first quarter of the year and obtain approval from the Director of the District or County Tax Bureau.

Based on the tax payable recorded in the household ledger, a notice of tax payment shall be issued to each household, divided into two installments during the year, each paying 50% of the annual tax payable. The first installment is due no later than April 30, and the second installment is due no later than October 31. Taxpayers must pay the full amount of tax on time as notified by the tax authority.

2. The land and house tax is a revenue item of the State budget collected at the local treasury where the land and houses subject to tax are located, corresponding to the chapters, types, sections, and items of the State budget. In cases where taxpayers are not present in the locality, the tax authority must officially notify them in writing to ensure they are aware of the declaration and payment deadlines.

3. The tax authority has duties and powers as stipulated in Article 15 of the Land and House Tax Ordinance.

When necessary, the tax authority may delegate tax collection to the town or commune authorities within the following scope:

- Distributing declaration forms, urging and guiding declarations, and collecting declaration forms.

- Delivering tax notices from the tax authority to taxpayers. In rural areas, the tax authority may entrust the town or commune authorities or village tax collection teams with the ledger of taxes, tax receipts, and cash collection. Strict adherence to established management systems is required for the administration of ledgers, tax receipts, and cash.

- Inspecting and identifying changes in ownership, usage rights, structure, and area of land and houses to compel land and house owners to declare and pay taxes.

- Organizations and individuals entrusted with collecting land tax shall be entitled to administrative fees ranging from 1% to 5%, calculated based on the amount of tax collected, in accordance with the specific characteristics of each locality. The Ministry of Finance will provide detailed guidance on the procedures for allocating and distributing these administrative fees.

4. Land and buildings directly serving production and business activities shall be considered as cost factors, deductible when determining taxable income for profit tax purposes.

IV - REDUCTION AND EXEMPTION OF LAND TAX.

In accordance with Articles 16 and 17 of the Land Tax Ordinance, reduction and exemption of land tax shall be granted in the following cases:

1. State employees, including those who have retired, been disabled, or resigned under Decision No. 176-HĐBT, who are provided housing by the state at subsidized prices or rented at controlled prices, and whose salaries do not yet include housing costs, shall temporarily be exempted from land tax as follows:

a) Housing owned individually by state employees (or their spouses) that has not been allocated by the state, shall be exempted from land and housing taxes equivalent to the area specified in Decision No. 150-CP dated June 10, 1977 of the Council of Ministers and Article 6 of Decision No. 162-HĐBT dated October 18, 1988 of the Council of Ministers, including the area of ancillary structures (such as kitchens, toilets, bathrooms, etc.) attached to the house.

b) Housing allocated or rented by the state at subsidized prices shall be exempted from land and housing taxes equivalent to the area specified in point a above; Any excess area beyond the standard, including additional areas created through renovation or expansion, shall be subject to land and housing taxes.

c) If state employees still reside in houses allocated to their parents, they shall be exempted from land tax according to the standard area allocated to the child, but now the person who was allocated the house has passed away.

d) If state employees have not been allocated housing and are living with their parents, they shall be exempted from land tax according to the standard area for the child as specified in point a above.

e) State employees residing in rural areas who have not been allocated housing shall be exempted from land tax on the area equivalent to the housing area specified in point a above.

g) For mountainous regions where agricultural tax is exempted, land tax shall also be exempted.

If state employees lose their citizenship due to criminal offenses and are no longer state employees, they shall not be eligible for land tax exemptions.

2. Houses constructed with materials that easily deteriorate, such as bamboo, reeds, wood from group 5 or lower, mud walls, straw roofs, or other easily deteriorating materials.

3. Houses that are truly damaged and require repair costing more than half of the assessed value for taxation shall be exempted or reduced from tax in the year of repair. In this case, before repairs are made, the owner must report the specifics to the tax authority and construction supervision agency for inspection and assessment under the following conditions:

- Wooden houses: Most columns and beams are cracked or bent, structural components supporting the roof must be replaced, and reinforcement is necessary for continued use.

- Brick wall houses: Many deep cracks in the walls, many components are warped and need support.

- Steel structure houses: Most components are rotten or rusted, bent, and warped, requiring reinforcement for continued use.

4. Newly constructed houses in newly formed urban areas may be exempted or reduced from tax for up to three years from the date of issuance of the construction permit, specifically:

- A construction permit from the competent authority is required.

- For individuals or organizations genuinely lacking (or falling short of the prescribed standards) in housing or workspaces.

Provincial People's Committees shall specify towns and townships in newly formed urban areas eligible for tax reductions or exemptions.

5. Houses built by state-owned enterprises using all sources of capital where the profits of the enterprise cannot cover the land tax.

6. Land and buildings used by production and business units or management agencies (including real estate management agencies) for collective welfare facilities such as kindergartens, clinics, hospitals, etc., without rental charges, or where the tax revenue does not cover maintenance and repair costs. In this case, the agency or unit must declare to the tax authority the location, area, purpose of use, rental price, etc.

7. Houses damaged by natural disasters, accidents, or unexpected events causing minor damage, such as roof leaks, broken rafters, tiles, etc., affecting the daily life of the occupants, shall be reduced by up to 50% of the total tax payable in the year of damage; If the damage is severe, such as foundation collapse, wall collapse, etc., then the tax on the land and building shall be exempted in the year of damage.

8. "Compassionate houses" built by social organizations or individuals for families of war heroes and martyrs without a place to live.

9. Houses and land of policy beneficiaries facing significant difficulties in making payments for land tax.

Procedures for granting reductions and exemptions of land tax are as follows:

- State employees eligible for exemption under point 1 of this section must submit a declaration form confirmed by their managing agency to the tax authority regarding their basic salary, housing standards according to state regulations, the area of housing allocated (or rented), etc.

For other cases (points 2, 3, 4, 5, 6, 7, 8, 9 of this section), the landowner must submit a request letter explaining the reasons for requesting a reduction or exemption, confirmed by the local government authority where the property is located.

- The tax authority shall conduct inspections and verifications and propose specific levels of reduction or exemption for each case.

The authority to grant reductions or exemptions of land tax is decided by the Director of the Tax Department. For central state-owned enterprises' houses, prior approval from the General Department of Taxation is required.

Reductions and exemptions apply uniformly to new developments during the year, but since the tax department has already approved them at the beginning of the year, cases eligible for reduction (or exemption) will be processed in the second tax payment period or at the beginning of the next year (without refund). Land tax reductions and exemptions are only applied annually and at the place of permanent residence.

VI - HANDLING VIOLATIONS AND SETTLING COMPLAINTS

- The handling of violations related to land tax and the authority to handle such violations shall be carried out in accordance with the provisions of Articles 18, 19, 20, 21, 23, 24, 25, and 26 of the Land Tax Ordinance.

It should be noted that each violation case must have a file with detailed records of each specific violation, sufficient legal grounds to conclude on the nature and severity of the violation, etc., based on which decisions are made according to current laws.

- Regarding complaints resolution, tax collection units must examine and resolve cases in accordance with the provisions set forth in the Complaints Resolution and Civil Litigation Procedures Ordinance.

VII- IMPLEMENTATION

- Tax authorities at all levels are responsible for disseminating and guiding individuals and organizations within their localities to comply with the Land Tax Ordinance, Decree No. 270-HĐBT dated September 14, 1991 of the Council of Ministers, and the contents stipulated in this Circular.

- The Land Tax Ordinance takes effect from July 15, 1991. Therefore, the land tax for the year 1991 will be collected at 50% of the annual tax amount calculated. For the first six months of the year, the old land tax rate will still apply, collected at 50% of the annual land tax amount calculated. Those who have paid the full year's land tax in 1991 will have 50% of the old land tax (for the last six months) deducted from the land tax payable for the last six months of 1991. If only 50% of the 1991 land tax has been paid, then the land tax for the last six months of the year will be collected according to the above guidance.

- From now until October 31, 1991, localities must complete declaration procedures to establish a comprehensive land tax ledger so that taxes can be collected in November 1991. The fundamental measure to ensure this timeframe is to fully implement the tasks required to enforce the Land Tax Ordinance as per Circular No. 1317-TC/TCT dated September 23, 1991 of the Ministry of Finance.

During the implementation process, any difficulties encountered should be promptly reported to the local government and the Ministry of Finance for guidance on resolution.

Attached to this Circular are models for the land tax declaration form (Form I) and the land tax ledger form (Form II).

Model No. 1

400

Vietnam Socialist Republic Provincial Tax Bureau

Tax Branch Independence - Freedom - Happiness

---------------------------------------------

House number                                                                Street (village)

Lot number                                                  Administrative code

Ward (commune)                                                       District (county)

Location: street frontage                                       Alley (lane)      

Distance from house (land) to alley...m2

I- Name of individual or organization

1. Owner:                                                   address:

2. User:                                             address:

3. Taxpayer:                                            address:

    Occupation                       Monthly basic salary           Number of household members:

II- House

1. Source of house:

- Built              permit number:          date:                   issuing authority:

- Purchased                  purchase date                    Seller's name:

registered at authority:                             Receipt number:                  date:

- Rented (leased)          lease date                 monthly rent:

- Other source          reason:

- Leasing party (or granting party)         Contract (decision) number              dated

2. Purpose of use:        Area (m2)            Area (m2)

- Residential                                    ..............                 - Production/Business               ..............

- Hotel                     ..............                 - Rental                     ..............

- Reform and Enterprise Development Board;                         ..............                 - Public use           ..............

- School                   ..............                 (Issued together with Joint Circular No. 16/2000/TTLT-BTC-BLDTBXH dated February 28, 2000)                          ..............

- Religious facility                           ..............

3. Description of house:                a) Type of house: 

Villa             Apartment building (residential complex)           High-rise building                Number of floors:

Single-story house (ground floor)                    Temporary house

                                       b) Building materials:

   Structure         Enclosure               Roof               Finishing material     Sanitary facilities and

   Load-bearing structure            of house                                             (flooring)                   amenities 

---------------   -----------------   ---------------   ------------------   ---------------------------

- Concrete      - Concrete          - Concrete       + Floor (foundation)    - Flush toilet         

- Brick           - Brick             - Tile            + Glazed brick          - Outdoor toilet      

- Steel      - Plywood           - Fiberboard         + Fired brick         - Shared use    

- Wood              - Galvanized iron sheet        - Cement       + Portland cement             - Private use     

- Bamboo, rattan      - Zinc              - Galvanized iron sheet     + Wood                     - Elevator          

- Clay, soil                            - Zinc           + Outside house       - Electricity, water   

- Reed           - Other leaves          + Washed stone      

                                              + Chiseled stone        

                                              + Fired brick 

 

C. Area (m2)

III- Land

We hereby certify that the declarations above are true, and if found to be false, we agree to be penalized according to the provisions of the Land Tax Ordinance.

CONFIRMATION BY THE AUTHORITY                                      Date ...month...year...199

      - Confirmation by Mr./Ms. ...                                            Declaration maker (or head of the unit)

      - Working at the agency...                                           agency) sign and stamp

      - Basic salary... (if applicable)

      Already (or not yet) allocated housing

      Standard area is...m2

      Date... Month... Year 199...

      Head of the agency

       SECURITY PERSONNEL

B - SECTION FOR TAX COLLECTING AGENCIES

      1. Total tax payable

      2. Tax reduction (or exemption according to decision):

      3. Annual land tax payable (3=1-2)          Written in words ...

          (Tax officer - signature; full name)                              Date... month... year 199

      Date... month... year 199                                   Head of the tax authority

      - Mark "X" in the corresponding box according to the actual declaration of property                     SECURITY PERSONNEL

Note: Each declaration form is for one taxable property.

Each declaration is used for one taxable real estate object.