Circular No. 60-TC/TCT guides the management regime for revenue collection from the sale of state-owned houses and the granting of land use rights for housing and construction projects.

CIRCULAR

Guidelines for managing revenue from the sale of state-owned houses,

granting land use rights for residential construction and infrastructure projects

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In recent times, many localities have sold state-owned houses and granted land use rights to organizations and individuals for residential construction, or have granted land use rights to organizations and individuals to invest capital in constructing certain infrastructure projects. However, there has been no unified national management system, leading to lax management of assets and funds, resulting in significant loss of state budget revenue.

Pending the issuance of a general management policy by the Government, the Ministry of Finance provides temporary guidelines for managing revenue from the sale of state-owned houses and granting land use rights for residential construction or investment in infrastructure projects at local levels as follows.

I. MANAGEMENT OF REVENUE FROM THE SALE OF HOUSES

1. Revenue from the sale of houses shall be deposited into the state budget for:

- The sale of residential houses owned by the state as stipulated in Section 1 of Circular No. 06/LB/TT dated February 10, 1993, issued jointly by the Ministry of Construction and the Ministry of Finance;

- The sale of factories, warehouses, office buildings, shops, etc., constructed with state budget funds.

For houses (residential, office, warehouse, etc.) built by agencies and enterprises using welfare funds or self-supplemented funds, when selling, the revenue from the transfer of land use rights attached to the house must be deposited into the state budget.

2. All agencies, Party organizations, mass organizations, armed forces, enterprises, companies, holding companies, and other entities that manage state-owned houses (hereinafter referred to as house management agencies) must deposit into the state budget all proceeds from the sale of houses or the transfer of land use rights attached to houses as specified in this Circular.

3. Revenue from the sale of houses not required to be deposited into the state budget according to this Circular includes:

- Proceeds from the sale of houses not owned by the state (excluding the price of transferring land use rights attached to the house), including the value of houses constructed with contributions from organizations and individuals;

- Proceeds from the sale of houses together with the transfer of land use rights attached to the house, which have already paid income tax as prescribed in Resolution No. 32/NQ/UBTVQH 9 dated March 10, 1993, of the Standing Committee of the National Assembly.

4. Method for calculating revenue from the sale of houses to be deposited into the state budget.

- The revenue from the sale of houses is determined based on the remaining actual value of the house (based on quality and grade), the price of transferring land use rights attached to the house, and any applicable price reduction under the regulations, calculated according to the formula:

In cases where the price of transferring land use rights attached to houses built with welfare funds and self-supplemented funds of the unit, it is determined by subtracting compensation costs for land damage, leveling costs (if any), and any applicable price reduction under the regulations from the price of transferring land use rights attached to the house.

Each locality should establish a Council for Determining the Sale Price of Houses, consisting of representatives from the Construction Department, Land Management Department, Financial Pricing Department, Tax Department, and house management agencies.

In principle, revenue from the sale of state-owned houses and the price of transferring land use rights attached to houses are revenues of the state budget that must be fully deposited into the state budget.

However, to cover expenses related to the organization of valuation, the house management agency may retain 2% (two percent) of the sale price of the house to fund the investigation, evaluation of the house, purchase of declaration forms, and organization of declaration and payment into the state budget.

The remaining revenue from the sale of houses after deducting the aforementioned 2%, must be fully deposited into the state budget.

At year-end, the house management agency must settle accounts with the tax and finance departments directly managing the unit regarding the use of the retained 2% of the sale price of the house. Any unspent amount must be deposited into the state budget.

5. Declaration and Payment of Revenue from the Sale of Houses.

a) All house management agencies mentioned in Point 1, Clause 1 of this Circular,

within thirty days from the date of signing the house purchase and sale contract, must declare in full to the tax authority all relevant documents concerning the origin of the house, including:

- Certificate of ownership of the house or source of construction funds;

- Location, area of the house, and area of attached land.

- List of eligible buyers, area of purchased houses, and proof of eligibility for policy exemptions (if applicable).

- Purchase and sale contract for the house and transfer of land use rights attached to the house, clearly stating the area, sale price, payment period, etc.

- Invoice for the sale of the house (at the actual sale price).

(Declaration form according to Model 1 attached).

b) After receiving the declaration from the house management agency, the local tax authority where the house is located will verify and confirm the declared data, determine the area and sale price of the house, and notify the payment into the state budget. The notification must clearly state the total amount of revenue from the sale of houses to be deposited into the state budget, the payment deadline. The payment deadline is based on the payment period stated in the purchase and sale contract.

Based on the payment deadline for the state budget notified by the tax authority, the house management agency will issue a payment receipt to the state treasury, recording it under the corresponding chapter, type, item, and category of the state budget classification. Simultaneously, units and enterprises must report to the finance department to reduce the state budget allocation corresponding to the transferred assets such as factories, warehouses, offices, etc., that have been valued.

For the amount of money from selling state-owned houses that has been collected but not yet submitted to the state budget before the issuance of this Circular, the house management agencies must now declare to the tax authority and submit to the state budget according to the guidelines set out in this Circular. The entire amount of money collected from selling houses must be fully submitted to the state budget no later than August 31, 1993. However, for the amount of money from selling factories, warehouses, office buildings, shops constructed with state budget funds sold before the issuance of this Circular, which have been used for reinvestment in fixed assets as stipulated in Article 2 of Decision No. 332-HĐBT dated October 23, 1991 of the Council of Ministers (now the Government), there will be no retroactive collection as provided for in this Circular.

II- ON THE MANAGEMENT OF RECEIPTS FROM GRANTING RIGHTS TO USE LAND FOR CONSTRUCTION OF HOUSING AND WORKS

1- The difference between the amount of money received when granting rights to use land to organizations and individuals for construction of housing and works, and the amount paid for compensation for losses and damages, compensation for crops and lawful property on the land, and costs for leveling and improving the land (if any), shall all be submitted to the state budget according to the provisions of this Circular.

2- The entities responsible for submitting the land use right fees are all agencies and organizations authorized to manage land, grant land use rights, and directly collect fees from organizations and individuals granted land.

3- Land use right fees shall not be submitted to the state budget according to the guidelines of this Circular in the following cases:

- Compensation for losses of agricultural land and forested land as prescribed in Decision No. 186/HĐBT dated May 31, 1990 of the Council of Ministers (now the Government);

- Rent for land of foreign organizations as prescribed in Decision No. 210a TC/VP dated April 1, 1990 of the Ministry of Finance;

- Collection of land administration fees.

4- Method of calculating the amount of land use right fees to be submitted to the state budget:

According to Point 1, Section II of this Circular, the amount of land use right fees to be submitted to the state budget is calculated using the following formula:

Where:

- Total amount of land use right fees collected = actual area of land granted x fee rate per square meter of land granted to organizations and individuals.

- Compensation for losses of agricultural land and forested land actually paid and submitted to the state budget, calculated according to the provisions of Decision No. 186/HĐBT dated May 31, 1990 and Circular No. 18 TC/ĐT dated June 5, 1992 of the Ministry of Finance.

In cases where the land use right grant contract specifies that the organization or individual receiving the land use right must pay compensation for land losses, such payment shall not be deducted from the amount that the land management agency must submit to the state budget.

- Compensation for crops and property on the land (if any) based on the actual amount compensated recorded on the payment voucher confirmed by the organization or individual receiving the compensation.

- Costs for leveling and improving the land based on the settlement of expenses of the unit, on the basis of reasonable and legitimate expenses.

5- Declaration and submission to the state budget.

a) All organizations and agencies, each time they grant land use rights as specified in Point 1, Section II of this Circular, within fifteen days from the date of issuing the land use permit, must declare to the tax authority about the situation of granting land, including:

- Total area of land granted (including the area granted to each organization and individual);

- Fee rate per square meter of land and total amount of fees collected for the plot of land granted;

- Actual expenses paid for compensation for land losses, costs for improving and leveling the land, etc. (declaration form attached as Model No. 2).

b) After receiving the declaration from the land use right granting agency, the local tax authority must check the declaration, determine the location, area, fee rate, amount of fees collected, and other related expenses, then notify the land use right granting agency of the amount to be submitted and the deadline for submission to the state budget.

Based on the notification from the tax authority, the land management agency must issue a payment receipt for submission to the National Treasury under Chapter 14, Item 01, Sub-item 9, Section 30 of the State Budget Manual, allocating 100% to the local budget.

For land use right fees generated but not yet submitted to the state budget, the land management agency must declare and fully submit to the state budget according to the guidelines of this Circular no later than August 31, 1993.

III- MANAGEMENT OF RECEIPTS FROM GRANTING RIGHTS TO USE LAND FOR SETTLEMENT OF THE VALUE OF COMPLETED PROJECTS

Granting rights to use land to organizations and individuals who have invested capital in constructing infrastructure projects often does not manifest as a specific amount of money (in cases where the amount can be determined, it shall be applied as prescribed in Section II of this Circular). However, in essence, this is an agreement to use state budget revenue from granting land use rights to settle the value of completed projects handed over, which are state assets managed by the state budget, implemented as follows:

1- All cases of granting land use rights to organizations and individuals investing capital in construction projects must record income and expenditure through the state budget (record income from land use right fees, record expenditure on investment capital for construction projects).

2- The amount of land use right fees received is determined by the total value of the completed construction project handed over for management and use, as approved by the final settlement and acceptance certificate of the project.

For example, Organization A invests capital in building Bridge X. The final settlement of the completed project handed over for management and use by Province H is valued at 20 billion VND. Instead of paying Organization A 20 billion VND for the construction of Bridge X, Province H grants Organization A a land use permit for Y hectares of land for housing or business purposes without specifying the specific amount of land use right fees, thus recording the state budget income from land use right fees as 20 billion VND, while recording the expenditure on investment capital for the construction of Bridge X - 20 billion VND.

3- Procedures for recording income and expenditure in the state budget.

The local financial authority (Department of Finance if the construction project is under provincial management, District/Huyện Financial Board if the construction project is under district management) shall take the lead in coordinating with the following agencies: Construction, land management, tax, and the same-level supervising agency to organize the implementation of:

- Reviewing the entire list of cases of land allocation on the territory associated with the construction projects handed over for use from 1990 to date, classifying which cases have been reflected in the state budget, and which cases remain outside the budget and have not been recorded in the State's fixed asset inventory;

- For cases where land allocation was provided instead of payment for completed construction projects that have not been reflected in the state budget revenue and expenditure results, and in the State's fixed asset inventory, the basis shall be the following documents:

+ Contracts signed between the construction project investment unit and the state agency directly responsible for land allocation;

+ Final settlement value of the completed construction project handover, accompanied by the completion acceptance report;

+ Land use right grant documents.

Record the state budget revenue (in 1993) in the corresponding chapter, type 14, clause 01, item 9 of the state budget classification, record the capital disbursement for construction project investment according to the corresponding chapter, type, clause, and item 53 of the state budget classification, the amount being equal to the value of the completed construction project as per the approved final settlement.

4- Implement the transfer and increase in state budget capital allocated to the project management unit in accordance with the capital transfer regulations of the Ministry of Finance. The supervising entity is responsible for recording the increased capital and the corresponding fixed asset value based on the current capital allocation.

5- For cases where land allocation is provided instead of payment for the value of basic construction projects handed over from now onwards, it is recommended that the People's Committees of provinces and centrally-administered cities direct relevant departments at the local level to strictly manage, in accordance with the state regulations on land use rights management and basic construction investment management, ensuring all sources of income from land allocation and construction projects are managed centrally and reflected in the annual state budget revenue and expenditure.

IV- VIOLATION HANDLING

All organizations and individuals who fail to declare, make false declarations, miss deadlines, or fail to pay or underpay according to this Circular shall, in addition to paying the full amount as prescribed, also be subject to penalties as stipulated in Decree No. 01-CP dated October 18, 1992 of the Government "on administrative violations in the field of taxation" and Circular No. 11 TC/TCT dated February 24, 1993 of the Ministry of Finance guiding the implementation of the aforementioned Decree.

V. IMPLEMENTATION

1- The organization of collecting money from selling houses and collecting money for land use rights allocation shall be carried out by the local tax authority. Tax authorities at all levels are tasked with disseminating and guiding the declaration and payment of revenues in accordance with the provisions of this Circular.

Specifically, for the organization of managing the collection of land use rights allocation instead of payment for the value of basic construction projects, this shall be led by the Department of Finance in coordination with related agencies at the local level. However, the collection into the budget shall still be handled by the tax authority using receipts issued by the Ministry of Finance.

2- It is recommended that the People's Committees of provinces and centrally-administered cities, Ministries, State Committees, central Party bodies, and mass organizations coordinate to guide and implement this Circular accurately.

3- This Circular takes effect from August 1, 1993.

Cases previously guided for specific handling in this Circular,

shall be reflected in the state budget balance for 1993.

During the implementation process, if there are any issues encountered, relevant departments and localities should promptly report them to the Ministry of Finance for research and resolution.