Circular No. 70/2006/TT-BTC guiding amendments and supplements to Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance on land use right transfer fees. This circular guides the implementation of Government Decree No. 198/2004/NĐ-CP dated December 3, 2004 on land use right transfer fee collection.

 CIRCULAR

Guidelines for amending and supplementing Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance guiding the implementation of Decree No. 98/2004/NĐ-CP dated December 3, 2004 of the Government on land use fee collection

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Based on the Land Law dated November 26, 2003;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on implementing the Land Law;

Pursuant to Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on land use fee collection (hereinafter referred to collectively as Decree No. 198/2004/NĐ-CP);

Pursuant to Decree No. 17/2006/NĐ-CP dated January 27, 2006 of the Government amending and supplementing certain articles of decrees guiding the implementation of the Land Law and Decree No. 187/2004/NĐ-CP on converting state-owned enterprises into joint-stock companies (hereinafter referred to collectively as Decree No. 17/2006/NĐ-CP);

The Ministry of Finance issues guidelines for amending and supplementing Circular No. 117/2004/TT-BTC dated December 7, 2004 guiding the implementation of Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on land use fee collection (hereinafter referred to collectively as Circular No. 117/2004/TT-BTC) as follows:

1. Supplement Point 3 into Section IV Part A as follows:

"3. The land price for land use fee collection shall be determined according to Clause 1, Article 5 of Decree No. 17/2006/NĐ-CP. The re-determination of land prices when they are not in line with actual market transfer prices under normal conditions shall be carried out as follows:

The Department of Finance shall take the lead in determining specific land prices together with relevant units and submit them to the People's Committee of the province or centrally governed city (hereinafter referred to collectively as Provincial People's Committee) for decision; in cases where organizations with appraisal functions or organizations providing consulting services on land prices are hired to determine the land prices, the Department of Finance shall be responsible for reviewing and submitting them to the Provincial People's Committee for decision to ensure that the land price for land use fee collection of the plot (lot) of land is in line with actual market transfer prices under normal conditions.

The determination of specific land prices for land use fee collection shall be carried out according to the method of determining land prices prescribed in Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods of determining prices and price ranges for various types of land and the circular guiding the implementation of this decree."

2. Amend and supplement Point 3 of Section III Part B as follows:

"3- Clause 3 provides for the case where the State leases land from the date Decree No. 142/2005/NĐ-CP dated November 14, 2005 of the Government on land lease fees and water surface lease fees takes effect, if the lessee has prepaid funds for compensation and support for land use rights; when transferring from leasing land to granting land use rights with land use fee payment, the compensation and support for land use rights can be deducted from the land use fee payable; the amount deductible is the compensation and support for land use rights not yet deducted from the lease fee for the area transferred from leasing land to granting land use rights, but not exceeding the land use fee payable."

3. Supplement Point 3 into Section I Part D as follows:

"3- Domestic organizations granted land use rights with land use fee payment to implement investment projects may pay the land use fee according to the progress of land allocation as prescribed. Organizations granted land use rights shall prepare a plan for the progress of land allocation to be submitted to the competent state agency for decision on land allocation according to the progress. Tax authorities shall collect the land use fee based on the progress of land allocation; the land price for land use fee collection shall be determined according to the provisions of Point 1 of this Circular at the time of land allocation according to the progress; in cases where the time of land allocation does not match the progress specified in the decision on land allocation, it shall be calculated based on the actual time of land allocation."

4. Amend and supplement Point 2 of Section III Part D as follows:

"2- Recording the land use fee payable on the certificate of land use right and collecting the land use fee:

a- In cases where certificates of land use rights were issued before the effective date of Decree No. 198/2004/NĐ-CP and belong to the category of residential land used since October 15, 1993 onwards, which require payment of land use fee and have the amount owed clearly recorded on the certificate of land use rights, the land use fee shall be collected into the state budget according to the amount recorded as owing. In cases where the certificate of land use rights does not clearly record the amount of land use fee owed, the land use fee shall be calculated and collected according to the regulations on land use fee collection at the time of issuing the certificate of land use rights.

b- Households and individuals who change the purpose of land use from garden or pond within the same plot of land containing a house or from agricultural land that has been planned for residential areas to residential purposes must pay the land use fee according to the provisions of Article 6 of Decree No. 198/2004/NĐ-CP, and households and individuals currently using land and holding certificates of land use rights who must pay the land use fee according to the provisions of Article 8 of Decree No. 198/2004/NĐ-CP but due to difficulties in living conditions cannot afford to pay the land use fee may record the land use fee payable on their certificate of land use rights. The eligible subjects for recording the land use fee payable include poor households as defined by the Government and low-income households unable to pay the land use fee as specifically defined by the provincial People's Committee after seeking opinions from the Standing Committee of the Provincial People's Council to suit local conditions.

To be recorded on the certificate of land use rights, households and individuals who cannot afford to pay the land use fee must submit a letter explaining the reasons why they cannot afford to pay the land use fee to the People's Committee of the commune, ward, or town where the land user changes the purpose of land use or receives the certificate of land use rights. The People's Committee of the commune, ward, or town shall base its confirmation and recommendation for recording the land use fee payable on the regulations of the provincial People's Committee and the actual difficult living conditions of each specific case. Based on valid documentation and the application of households and individuals with confirmation from the People's Committee of the commune, ward, or town, the district-level People's Committee shall decide on recording the land use fee payable and issue the certificate of land use rights to households and individuals in accordance with current land laws."

c- The land price for recording arrears of land use fee or collecting arrears of land use fee is the land price issued by the provincial People's Committee in accordance with the Government's regulations that are effective at the time of issuing the land use right certificate.

d- The payment of outstanding land use fees shall be carried out in accordance with Clause 4, Article 5 of Decree No. 17/2006/NĐ-CP.

e- Recording arrears of land use fees does not apply to new land allocation cases (including auction or non-auction methods of land use rights allocation) as stipulated in Article 5 of Decree No. 198/2004/NĐ-CP.

5. Amend and supplement Point 3, Item III, Part D as follows:

“3- For domestic organizations allocated land for investment projects approved for construction of residential areas, new urban areas, or infrastructure construction for transfer or lease before the effectiveness of Decree No. 198/2004/NĐ-CP, which have been permitted by the provincial People's Committee to delay payment of land use fees in accordance with Clause 5, Article 12 of Decree No. 38/2000/NĐ-CP dated August 23, 2000 of the Government, they shall pay the land use fees into the State budget within the period specified in the decision of the provincial People's Committee; if they fail to fully pay the land use fees into the State budget within the permitted delayed payment period, the unpaid land use fees must be recalculated according to the land price decided by the provincial People's Committee to collect land use fees as stipulated in Point 1 of this Circular at the time of payment, and they must also pay penalties as prescribed in Article 18 of Decree No. 198/2004/NĐ-CP.”

For land allocated to implement projects before the effectiveness of Decree No. 198/2004/NĐ-CP, which do not fall under the category of projects allowed to delay payment of land use fees mentioned above, and which have been notified by tax authorities to pay land use fees but have not paid or have not fully paid according to regulations, they must pay the outstanding land use fees or the insufficiently paid land use fees according to the land price decided by the provincial People's Committee as stipulated in Point 1 of this Circular at the time of payment, and they must also pay penalties as prescribed in Article 18 of Decree No. 198/2004/NĐ-CP.

6. Effective date:

This Circular takes effect fifteen days from the date of publication in the Official Gazette. Provisions in Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance that are not amended or supplemented in this Circular remain effective.

During the implementation of this Circular, if any difficulties arise, please promptly report them to the Ministry of Finance for study and resolution.