Decree No. 59/2014/ND-CP Amending and supplementing some articles of Decree No. 69/2008/ND-CP dated May 30, 2008 of the Government on policies encouraging socialization in activities in the fields of education, vocational training, healthcare, culture, sports, and environment.

DECREE

Amending and supplementing certain articles of Decree No. 69/2008/NĐ-CPdated May30, 2008 of the Government on policiesencouraging socialization foractivities in the fields ofeducation, vocational training, healthcare, culture, sports, and environment

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Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Investment Law dated November 29, 2005;

Pursuant to the Law on Tax Administration dated November 29, 2006; the Law Amending and Supplementing Certain Articles of the Law on Tax Administration dated November 20, 2012;

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

At the proposal of the Minister of Finance,

At the proposal of promulgating the Decree amending and supplementing certain articles of Decree No. 69/2008/NĐ-CP dated May 30, 2008 of the Government on policies encouraging socialization for activities in the fields of education, vocational training, healthcare, culture, sports, and environment.

Article 1. Amending and supplementing certain articles of Decree No. 69/2008/NĐ-CP dated May 30, 2008 of the Government

1. Amending Clause 1 of Article 1 as follows:

"1. Scope of regulation ofDecree

Socialization includes: Education and training, vocational training, healthcare, culture, physical culture and sports, environment, judicial appraisal."

2. Amending and supplementing Clause 5 as follows:

"Article 5. Leasing and constructing infrastructure facilities
1. Ministries, sectors responsible for socialization and People's Committees of provinces directly under the central government (hereinafter referred to as provincial People's Committees) shall base on budget capacity and socialization encouragement needs to invest in infrastructure, construct part or all of socialization projects or use existing house and infrastructure funds to lease to entities implementing socialization for a limited time.
2. In cases where the state budget does not allocate or does not allocate enough to invest in infrastructure and socialization projects for leasing, ministries, sectors responsible for socialization, and provincial People's Committees shall negotiate with entities implementing socialization regarding the advance payment of rent for infrastructure and socialization projects to provide capital for investment construction.

The amount of advance rental payment shall be converted into years or months completed in terms of rental obligations for infrastructure and socialization projects.
3. The rental price for infrastructure and part or all of socialization projects shall be decided by ministries, sectors responsible for socialization, and provincial People's Committees after negotiating with entities implementing socialization and according to the principle that the rental price should be determined in accordance with prevailing market rental prices at the time of signing the lease contract while taking into account local incentives but must ensure the preservation of costs forming the leased asset.
4. Entities implementing socialization that have paid or made advance payments for rental of infrastructure and socialization projects shall have the following rights:
a) To continue to complete the socialization project investment to carry out production and business operations in accordance with the law when the entity leases infrastructure and part of the socialization project;
b) To include the rental cost of infrastructure and socialization projects (paid or advanced) in the project cost as prescribed;
c) To include additional investment value (if any) in the project investment capital and use such additional investment assets as collateral for loans;
5. In cases where there is a need to contribute capital, joint venture, or associate to establish entities implementing socialization, ministries, sectors responsible for socialization, and provincial People's Committees shall negotiate with investors on the use of rental fees for infrastructure and socialization projects or the value of assets invested on land to contribute capital, joint venture, or associate with such socialization entities in accordance with the law.
6. At the end of the lease period or early termination of the lease or capital contribution as stipulated in Clause 1 and Clause 4 of this Article, entities implementing socialization shall transfer all infrastructure and architectural works on land to the State.
7. Procedures and formalities for leasing infrastructure and socialization projects, contributing capital through rental fees to implement socialization projects shall be carried out in accordance with this Decree and laws on management and use of state assets.
8. Provincial People's Committees shall create favorable conditions for entities implementing socialization to invest in building schools, hospitals, amusement areas, sports areas, museums, libraries, cultural houses, theaters, cinemas, or other socialization projects according to approved planning.

9. The Ministry of Finance shall guide the implementation of this Article."

3. Amend and supplement Article 6 as follows:

"Article 6. Leasing Land
1. Entities implementing socialization shall be granted land lease by the State for the construction of socialization projects after completing land clearance, free of rental fees for the entire lease period except in cases provided for in Clause 2 of this Article.
The handling of compensation and land clearance for the construction of socialization projects shall be carried out in accordance with Clause 5 of this Article.
2. For entities implementing socialization using land in urban areas, provincial People's Committees shall base on actual conditions of the locality to stipulate exemption and reduction regimes for land rental fees according to different zones and fields. The maximum level is exempting land rental fees for the entire duration of the project; the minimum level equals the preferential rate prescribed by the law on land and the law on investment.

Within six (06) months from the date this Decree takes effect, provincial People's Committees shall issue and publicly announce the above-mentioned exemption and reduction regime for land rental fees based on the scope of socialization priority fields and areas in their locality after obtaining the consensus opinion of the Standing Committee of the People's Council at the same level.

Every three (03) years, provincial People's Committees shall review to amend and supplement the List of priority fields and areas for socialization in their locality to ensure appropriateness.
3. In cases where investors legally acquire land use rights to implement investment projects for constructing socialization projects and need to change land use purposes in accordance with land planning and land use plans, investors shall be granted land lease by the State in accordance with the law on land and enjoy exemptions and reductions in land rental fees as stipulated in Clause 1 and Clause 2 of this Article, specifically:
a) In the case where the investor is exempted from land rent for the entire duration of the project, the amount of money the investor has paid to acquire the right to use the land shall be included in the investment cost of the project;
b) In the case where the investor is only exempted from land rent for a certain number of years, the amount of money the investor has paid to acquire the right to use the land shall be considered as the land rent that the investor has prepaid to the State to lease the land according to the provisions of the land law. This amount shall be determined based on the land price at the time of the decision of the competent state agency allowing the change of land use purpose, but not exceeding the compensation and support corresponding to the case where the State recovers the land according to the provisions of the land law.
The amount of money the investor has paid to acquire the right to use the land as stipulated in Point b Clause of this Article shall be determined according to the following principles:

- In the case where the land price for calculating land rent is determined according to the method of adjusting land price coefficients, the price of the type of land being transferred shall also be determined according to the method of adjusting land price coefficients at the time of the decision to change the land use purpose;

- In the case where the land price for calculating land rent is determined according to direct comparison, deduction, income, and surplus methods, the price of the type of land being transferred shall also be determined according to these methods at the time of the decision to change the land use purpose.

The determination of the land price for collecting land rent according to the method of adjusting land price coefficients or according to direct comparison, deduction, income, and surplus methods shall be carried out in accordance with the provisions of the Government Decree on collecting land rent and water surface rent.
4. The exemption and reduction of land rent as prescribed in Clause 1, Clause 2 of this Article shall be implemented as follows:
a) Socialization entities with socialization projects approved by the competent state agencies in accordance with the law and leased land by the State to implement the project, provided that the content of the project has been approved and meets the list of types, scales, and standards specified by the Prime Minister, shall enjoy preferential policies on land as prescribed in this Decree from the date of the decision to lease land or the decision to allow the change of land use purpose issued by the competent state agency;

b) In the case where, after the completion and operation of the project, the competent state agency conducts inspection and determines that the socialization entity does not meet the criteria, scale, and standards as decided by the Prime Minister according to the commitments made, the socialization entity must pay back the land rent that was exempted or reduced according to the policy and the land price at the time of enjoying the land preference as stipulated in Point a Clause of this Article, along with late payment penalties calculated based on the land rent that was exempted or reduced according to the tax management law;

c) Based on the actual situation in the locality and the type of socialization project, the provincial People's Committee shall assign the tax authority to take the lead and coordinate with specialized management agencies on socialization and other relevant agencies to inspect and determine whether the socialization entity meets the criteria, scale, and standards decided by the Prime Minister at the time the project is completed and put into operation;

d) The inspection and determination as prescribed in Point b, Point c Clause of this Article shall be carried out as follows:

- After the project is completed and put into operation, within the period specified in the list of types, criteria, scales, and standards for each field of socialization decided by the Prime Minister, the socialization entity must submit a document to the tax authority to notify the completion and operation of the project, accompanied by related files and documents for the tax authority to consider and issue a formal decision on the exemption and reduction of land rent;

- Within thirty days from the date of receipt of the document from the socialization entity, the tax authority shall coordinate with relevant agencies to carry out the inspection and determination as prescribed in Point c Clause of this Article. If the socialization entity does not meet the criteria, scale, and standards decided by the Prime Minister, the tax authority shall have the responsibility to report to the provincial People's Committee for handling according to the provisions in Point b Clause of this Article.

5. Handling of compensation and clearance of construction sites:

a) The provincial People's Committee shall base on the local budget capacity to implement compensation and clearance of construction sites and hand over the land that has been cleared to the investor to lease for implementing socialization projects;

b) In the case where the provincial People's Committee cannot balance the local budget to implement compensation and clearance of construction sites and hand over the land that has been cleared to the investor to lease for implementing socialization projects, the handling of compensation and clearance of construction sites shall be carried out as follows:

- In the case where the entity is exempted from land rent for the entire duration of the project, the socialization entity shall refund the compensation and clearance costs according to the plan approved by the competent state agency into the state budget, and this expense shall be included in the project investment capital;

- In the case where the entity is partially exempted or not exempted from land rent, the socialization entity shall refund the compensation and clearance costs according to the plan approved by the competent state agency into the state budget, and this expense shall be deducted from the land rent payable (in the case of leasing land with a lump sum payment for the entire rental period) or converted into the number of years or months of land rent already paid (in the case of annual land rent payment) according to the provisions of the law on collecting land rent and water surface rent, but not exceeding the land rent payable or the rental period of the project. Any remaining amount (if any) shall be included in the project investment capital.

c) In the case where the socialization entity voluntarily pre-pays compensation and clearance costs to the State to expedite the clearance process, the handling of compensation and clearance of construction sites shall be as follows:

- In cases where the subject is exempted from land rent for the entire duration of the project, the entity implementing socialization may include compensation and clearance costs according to the plan approved by the competent state authority into the project's investment capital.

- In cases where the subject is partially exempted from or not exempted from land rent, the entity implementing socialization may deduct compensation and clearance costs according to the plan approved by the competent state authority from the total land rent payable (for cases where land is leased with payment made once for the entire lease period) or convert it into the number of years or months of land rent paid (for cases where land is leased with annual rent payments) as stipulated in laws on land rent and water surface rent, but not exceeding the total land rent payable or the period for paying land rent of the project. Any remaining amount (if any) shall be included in the project's investment capital.

d) The compensation and clearance costs specified in Points b and c of this Clause include compensation, support, resettlement, and organizational expenses for compensation and clearance.

6. In cases where the entity implementing socialization is leased land by the State with payment made once for the entire lease period and is exempted from land rent for the entire duration of the project or exempted from land rent for a certain number of years as stipulated in Clause 1 and Clause 2 of this Article but wishes to pay land rent (without applying preferential policies), the land rent payable shall be determined according to the policy and land price at the time the competent authority permits payment. The land rent is determined for the remaining period of land use, which is the remaining time of the investment project. The entity implementing socialization has rights over the value of the land lease right for the remaining period of land use in accordance with the provisions of the Land Law corresponding to the form of land use.

In this case, the entity implementing socialization may deduct remaining compensation and clearance costs (if any) according to the plan approved by the competent state authority (which have not been allocated to the project cost) from the land rent payable, up to the total land rent payable; include the value of the land use right into the asset value of the investment project and have rights and obligations like economic organizations granted land with payment of land use fee for the remaining period of land use in accordance with the provisions of the Land Law.

7. In cases where two or more investors register to choose the same location to implement an investment project in the field of socialization, the investor meeting the highest criteria regarding scale, quality, and efficiency as stipulated in laws on bidding and land shall be selected.

8. The entity implementing socialization that legally uses land shall be issued a Certificate of Land Use Right, House Ownership Right, and Other Property Rights attached to the land; the State shall protect the legal land use right, house ownership, and property rights in accordance with the law. The procedures and formalities for leasing land and issuing certificates shall be carried out in accordance with the provisions of the Land Law.

9. The use of land by the entity implementing socialization must comply with the purpose, conform to planning, and adhere to all provisions of the Land Law. Upon expiration of the land lease term, if the entity implementing socialization does not need to continue using the land or is dissolved or transferred elsewhere, it must return the land granted to the State; in cases of improper use of land, the State will reclaim the land.

10. Including the value of the land use right in the asset value of the investment project and the rights of the entity implementing socialization over the land:

a) When the State leases land with payment made once for the entire lease period and exempts the entity implementing socialization from land rent for the entire duration of the project or leases land with annual rent payments, the entity implementing socialization shall not include the value of the land use right in the asset value of the investment project and shall not transfer, assign, gift, or lease the land use right; shall not mortgage, guarantee, or contribute capital with the land use right.

b) When the State leases land with payment made once for the entire lease period and exempts the entity implementing socialization from land rent for a certain number of years, the entity implementing socialization may include the value of the leased land use right according to the amount of land rent already paid into the asset value of the investment project. The entity implementing socialization may only transfer, assign, gift, or lease the land use right; mortgage, guarantee, or contribute capital with the land use right within the value of the leased land use right corresponding to the amount of land rent payable.

11. Transfer of socialized projects:

a) During the implementation of the project, due to objective reasons, it is impossible to continue implementing the project on the land leased by the State, the entity implementing socialization may transfer the project in accordance with the Real Estate Business Law if the Provincial People's Committee approves the transfer proposal in writing. The transferee must ensure continued implementation of the socialized project in accordance with the project's objectives and land use purposes.

b) The value of the transferred project is agreed upon by both parties and includes:

- Assets on land in cases where the project is exempted from all land rent or in cases where land is leased with annual rent payments;

- Assets on land and the entire value of the land use right in cases where the project must pay all land rent (without exemption or reduction) in cases where land is leased with payment made once for the entire lease period;

- Assets on land and a portion of the value of the land use right corresponding to the portion of land rent already paid to the state budget in cases where the project is partially exempted from land rent.

c) The completion of procedures for leasing land between the old and new investors when transferring a socialized project shall be carried out in accordance with the provisions of the Land Law.

12. For land legally transferred from organizations, households, or individuals without changing the land's intended use as stipulated in Clause 2 of this Article, the socialization implementing entity shall be entitled to include the value of the land use right currently in use in the assets of the investment project and allocate it to the costs for recovering the investment capital in accordance with the provisions of the law.

13. The Ministry of Finance shall provide guidance on the implementation of this provision.”

4. Amend and supplement Clause 9 of Article 18 as follows:

"Article 18. Tasks of the People's Committee of the province
9. Supervisory tasks

Direct the Tax Department to take the lead and coordinate with the Department of Planning and Investment, the Department of Finance, the Department of Natural Resources and Environment, and the specialized department related to socialization to monitor the implementation of socialization projects in accordance with the conditions and criteria approved by the competent authority. In case of discovering that the socialization implementing entity does not meet the conditions and criteria approved by the competent authority, report to the People's Committee of the province for consideration and decision to revoke the incentives in accordance with the provisions of the law".

Article 2. Transitional provisions

1. In cases where the socialization implementing entity uses residential land or urban land within the categories, criteria, scale, and standards decided by the Prime Minister but the provincial People's Committee has not yet issued regulations on exemption or reduction of land use fees and land rental fees as provided for in Clause 1 of Article 6 of Decree No. 69/2008/ND-CP, the socialization implementing entity shall enjoy the exemption or reduction of land rental fees as prescribed in this Decree from the date Decree No. 69/2008/ND-CP takes effect.

2. For socialization implementing entities that have been allocated land by the State and are exempted from paying land use fees or have had their land use fees reduced according to the laws on encouraging socialization before the effective date of this Decree, they may continue to use the land for the remaining period of land use without having to convert to land rental. If converted to land rental, they shall not have to pay land rental fees during the period allocated by the State.

3. Socialization implementing entities that have been allocated land or leased land, have cleared the site, and have been permitted by the competent state agency to enjoy preferential policies as prescribed in Decree No. 69/2008/ND-CP from the effective date of Decree No. 69/2008/ND-CP until August 1, 2014, and the State does not require them to pay compensation or clearance fees, shall not have to repay the State such amounts.

4. The Ministry of Finance shall be responsible for guiding this provision.

Article 3. Implementation Provisions

1. This Decree takes effect from August 1, 2014.

2. Repeal the provisions at Clause 3, Article 4 and Clause 3, Article 18 of Decree No. 69/2008/ND-CP dated May 30, 2008 of the Government.

3. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees directly under the Central Government are responsible for implementing this Decree./.