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

CIRCULAR

||| DIRECTIVE NO. 53-TC/TCT OF SEPTEMBER 28, 1991 BY THE MINISTRY OF FINANCE GUIDING THE IMPLEMENTATION OF THE LEGISLATION OF THE STATE COUNCIL AND THE DECREE OF THE COUNCIL OF MINISTERS ON LAND AND HOUSE TAX

Pursuant to the Land and House Tax Ordinance dated June 29, 1991 promulgated by Decree No. 54/LCT/HĐNN 8 dated July 1, 1991 of the State Council and Resolution 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 guides the implementation as follows:

I - SCOPE OF APPLICATION

1. Object of collection: Land and house tax is collected from houses and land for residential purposes and land for construction projects.

a) Regarding houses: It includes houses for residence, houses for work of economic organizations and business establishments, houses used for production and business (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 on it, land without houses built on it, land for ponds and gardens (not subject to agricultural tax), land for paths around houses or unused land...

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

2. According to Article 2 of Resolution No. 270-HĐBT dated September 14, 1991 of the Council of Ministers, 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, 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) are taxpayers for land and house tax. In specific cases, they are handled as follows:

a) Houses and land managed by housing management agencies or real estate enterprises leasing to cadres, civil servants, and the public at market-based prices shall be taxed by the lessees to ensure strict tax collection and prevent revenue loss, especially regarding expanded areas (extensions, expansions, encroachments, etc.). The rent paid by the lessee can be deducted from the house and land tax.

In cases where houses and land are leased to the public at subsidized prices by housing management agencies or real estate enterprises, the lessees shall pay the tax on behalf of the housing management agency and can deduct part of the tax paid from the rent payable to the housing management agency.

b) Houses and land distributed by state agencies, enterprises, and social organizations, national defense and security units to workers and officials (or leased at subsidized prices) shall be taxed by the recipients (or lessees) for the excess beyond the state standards as stipulated 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 any expansion or extension, such additional areas must be included in the taxable area.

In cases where houses and land are self-built, purchased at valuation prices, or inherited by officials, workers, and military personnel, the portion up to the standard allocation as per Decision No. 150-CP is exempted from tax, while the remaining portion must be taxed.

c) Houses and land entrusted for management and use shall be taxed by the individual or organization receiving the entrustment.

d) Houses and land mortgaged shall still be taxed by the owner of the house and land.

e) Houses and land confiscated for legal violations shall be taxed by the agency managing and taking over the houses and land.

g) Houses and land in dispute over ownership or usage rights shall be taxed by the individual or organization currently using and managing them.

h) In cases where the ownership or usage rights of houses and land are unclear, including cases of unauthorized construction, the individual or organization currently using the houses and land shall be taxed.

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

i) Houses and land rented to foreign individuals or organizations (including foreign-invested enterprises) shall be taxed by the owner of the house and land (except when required to pay on behalf), while the renters only need to pay rent.

In cases where Vietnam contributes statutory capital in the form of land usage rights to joint ventures with foreign countries, Vietnam must pay the land tax.

For houses for residence, work, and production and business activities of foreign-invested enterprises (including wholly foreign-owned enterprises and joint ventures) must pay house tax according to the Land and House Tax Ordinance and related state directives.

3. No land and house tax shall be collected from the following objects:

a) Houses in rural areas, except houses along national highways, provincial roads, and main traffic routes in plains and midlands where commercial and service activities take place (including houses with service businesses and those without). All such houses must pay land and house tax.

Provincial People's Committees shall specify the rural areas along national highways, provincial roads, and main traffic 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 land used as administrative offices, social organizations, cultural, educational, health facilities, military camps; if used for business, then the portion used for business must be taxed.

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

e) Houses and land owned by organizations or individuals used for public benefit without rental fees.

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 townships: the basis for calculating the land and house tax is the area of the house, the area of the land, the taxable price per square meter (m2) for each category of houses and lands, and the tax rate.

The specific method of calculating the tax is as follows:

Amount of house tax = Area of taxable house x Taxable price per m2 x 0.3%

house must = taxable house x tax per square meter x 0.3%

pay (converted) (by each category of house)

Amount of land tax = Area of taxable land x Taxable price per m2 x 0.5%

land must = taxable land x each category of land x 0.5%

pay tax (based on coefficient)

Pursuant to Article 5 of Decree No. 270-HĐBT dated September 14, 1991, the Ministry of Construction, Ministry of Finance, State Price Commission, and General Department of Land Management issued a joint circular guiding the classification of categories of houses and lands and determining the taxable prices 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 lands and the taxable prices for land and house taxes in accordance with local realities.

The taxable prices 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 the house is the actual area currently being used, including the main construction area (for living, working, production, etc.) and auxiliary construction areas (kitchen, toilet, bathroom, balcony, veranda, private corridor, etc.).

The area of the land is the total area currently managed and used, including the land foundation of the house.

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

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, issued by 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 land registry of the state, or if there is no land registry, it is based on declarations and opinions of land management staff confirmed by the People's Committee of the commune.

b) The category of taxable land 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 taxable land is determined by the highest category of taxable agricultural land in the village, hamlet, ward, or commune.

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

The People's Committee of the commune bases the determination of the category of residential land for each village, hamlet, ward, or commune on the approved results of the classification of taxable agricultural land by the People's Committee of the district currently in effect in the locality, to serve as the basis for taxation. 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 shall be carried out in January each year according to the following regulations:

- The subjects 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, such as 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, according to a unified model prescribed 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 kept as the basis for establishing the tax ledger, and the other copy will be returned to the declarant.

For cases where state-owned enterprises have 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 eligible for tax exemption according to Point 1, Section IV of this Circular, the declaration must be confirmed by the relevant authority regarding the number of houses and the total current area, and the tax exemption will only apply at the place of permanent residence of the civil servant or employee.

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

By the end of the first quarter each year, the tax authority must complete the tax ledgers for each ward or commune and obtain approval from the District or County Tax Commissioner.

Based on the tax payable recorded in the household ledger, the tax authority shall issue a notification of tax payment to each household, divided into two installments during the year, each installment being 50% of the annual tax payable. The first installment must be paid no later than April 30, and the second installment no later than October 31. Taxpayers must pay the full amount of tax due within the specified deadlines 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 house subject to tax is located, corresponding to the chapters, types, items, and sub-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 township or commune authorities, limited to the following tasks:

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

- Delivering tax notifications from the tax authority to taxpayers. In rural areas, the tax authority may entrust the township or commune authorities or village tax collection teams with the task of collecting taxes in cash, managing the tax ledgers, tax receipts, and cash strictly in accordance with established procedures.

- Inspecting and identifying changes in ownership, usage rights, structure, and area of land and houses to compel the 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% of the amount of tax collected, depending on the specific characteristics of each locality. The Ministry of Finance will provide detailed guidance on the procedures for allocating and utilizing 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 by state employees (or their spouses) that has not been allocated by the state shall be exempted from land and building taxes equivalent to the area stipulated 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 building taxes equivalent to the area specified in point a above; Any excess area beyond the standard, including any additional area created through renovation, shall be subject to land and building taxes.

c) If state employees live in houses allocated to their parents and the person originally allocated the house has since passed away, they shall be exempted from land tax according to the standard area allocated to the child.

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 allocated to 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) In mountainous regions where agricultural tax is exempted, land tax shall also be exempted.

State employees who have lost their citizenship rights and are no longer state officials shall not be eligible for exemption from land tax.

2. Houses built with materials that easily deteriorate, such as bamboo, wood, or straw, or other easily deteriorating materials, classified up to group 5.

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

- Wooden houses: most columns and beams are cracked or bent, structural components need replacement affecting the roof, requiring reinforcement to be usable.

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

- Steel structure houses: most components are rotten or rusted, bent or warped, requiring reinforcement to be usable.

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

- Must have a construction permit issued by the competent authority.

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

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

5. Houses built by state-owned enterprises using all sources of capital where the profits of the enterprise are insufficient to cover the land tax.

6. Land and buildings used by production and business units or management agencies (including land management agencies) for collective welfare facilities such as kindergartens, clinics, hospitals, etc., without rental charges or where the tax revenue is insufficient to cover maintenance and repair costs. In this case, the unit must declare to the tax authority the location, area, purpose of use, rental price, etc.

7. Houses damaged by natural disasters or accidents causing minor damage, such as leaking roofs, broken rafters, etc., affecting the lives of the occupants, shall be exempted from tax up to 50% of the total tax payable in the year of damage; If the damage is severe, such as foundation collapse or wall collapse, then the tax shall be exempted for 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 paying land tax due to financial hardship.

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 management 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 owner of the property must submit a request letter explaining the reasons for requesting a reduction or exemption, confirmed by the local commune or ward authority.

- The tax authority shall conduct inspections and verifications and propose the level of reduction or exemption for each specific 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' properties, prior approval from the General Tax Department is required.

Reductions and exemptions apply uniformly to new occurrences during the year, but if approved at the beginning of the year, the 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 and Litigation Procedures Ordinance for Citizens.

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 took 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 old 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 as specified above.

- From now until October 31, 1991, localities must complete registration procedures to establish land tax ledgers so that taxes can be collected in November 1991. The basic 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 must be reported promptly to the local authorities and the Ministry of Finance for guidance on resolution.

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

Model No. 1

Vietnam Socialist Republic Provincial Tax Bureau

District Tax Office Independence - Freedom - Happiness

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LAND AND HOUSE DECLARATION FORM

A. DECLARATION SECTION

House number Street (village)

Lot number Legal address number

Ward (commune) District (county)

Location: street 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 main income Number of household members:

II- House

1. Source of house:

- Built with construction permit number: date: issuing authority:

- Purchased purchase date Seller's name:

registered at the authority: Receipt number: date:

- Rented (allocated) rental date Rent price VND/month:

- Other source reason:

- Landlord (or allocator) Lease agreement (decision) number date

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

AT ...- Production Business ...

Hotel ...- Rental ...

Government office ...- Public use ...

School ...- Other ...

Religious facility ...

3. Description of house:

a) Type of house:

Villa Apartment building (apartment) High-rise number of floors:

Single-story house Temporary house

b) Building materials:

Structure Wall material Finished material Sanitary facilities and load-bearing structure Roof (tiled, cladded) amenities

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

Concrete - Concrete - Concrete + Floor (ground) - In-house sanitation

Brick - Brick - Tile + Ceramic tiles - Outside sanitation

Steel - Plywood - Fibro + Burnt bricks - Shared use

Wood - Galvanized iron - Cement + Cement - Private use

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

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

Reed - Other leaves + Washed stones

Chiseled stone

Burnt brick

C. Area (m2)

 

 

III- Land

We hereby certify that the declarations above are true, and we agree to penalties as prescribed by the Land Tax Law if they are found to be false.

Confirmation by authority Date...month...year...199

Confirmed by Mr./Ms.... Declaration maker (or head of unit)

Working at authority... unit) sign and stamp

Main monthly income... (if applicable)

Already (or not yet) allocated standard housing area of...m2

Date... month…year 199

Head of authority (sign and stamp)

B - Section for Tax Authority

1. Total tax payable

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

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

Written in words...Date...month...year 199

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

(Inspector - sign; write full name) (sign and stamp)

Note: Mark an "X" in the box corresponding to the actual situation of the declared land and house

Each declaration form is used for one taxable land and house object