Circular No. 70-TC/QLCS guides the payment of land rental fees and the contribution of land value to joint ventures by domestic organizations as stipulated in Decree No. 85/CP dated December 17, 1996 of the Government.

MINISTRY OF FINANCE ********	SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness ********
NUMBER: 70-TC/QLCS	HA NOI, OCTOBER 7, 1997

CIRCULAR

DIRECTIVE NO. 70-TC/QLCS OF THE MINISTRY OF FINANCE ON OCTOBER 7, 1997 GUIDING THE PAYMENT OF LAND RENT AND CONTRIBUTION TO JOINT VENTURE CAPITAL WITH THE VALUE OF LAND USE RIGHTS OF DOMESTIC ORGANIZATIONS AS PROVIDED FOR IN DECREE NO. 85/CP OF THE GOVERNMENT ON DECEMBER 17, 1996

Pursuant to Decree No. 85/CP dated December 17, 1996 of the Government detailing the implementation of the Ordinance on the rights and obligations of domestic organizations granted land use rights by the State; the Ministry of Finance guides the payment of land rent and contribution to joint venture capital with the value of land use rights of domestic organizations, and handles cases where domestic organizations have paid land use fees in non-State budget funds before September 9, 1996 (the date when the amended and supplemented Ordinance took effect) as follows:

Part 1:

PAYMENT OF LAND RENT

I. SUBJECTS REQUIRED TO PAY LAND RENT:

1. Subjects required to pay land rent:

1.1. Domestic economic organizations must register and pay land rent:

State-owned enterprises, enterprises of political and social organizations; defense and security enterprises; joint stock companies, limited liability companies, and other business organizations using land for production and business purposes that are not agricultural, forestry, aquaculture, or salt production must pay land rent according to this Circular.

1.2. Other subjects required to register and pay land rent:

a) Agricultural, forestry, aquaculture, and salt production enterprises permitted to use land for constructing offices (headquarters), repair and processing workshops, and business services.

b) Organizations granted land without paying land use fees for public purposes but using part of the area for production and business purposes must declare and register to pay land rent for that portion during the period of use for production and business.

c) State agencies, political and social organizations, and people's armed forces units granted land for constructing office buildings, national defense and security purposes, or building projects in economic, cultural, social, scientific, technical, and diplomatic sectors, if they use part of the allocated land for production and business purposes, must declare and register to pay land rent for that portion.

d) In the case of public welfare facilities, if they are managed, operated, and used for production and business purposes by enterprises, those enterprises must pay land rent for the areas used for production and business purposes. Specifically, some cases are as follows:

+ For ferry terminals, ports, warehouses, bus stations, only the land rent is calculated for the area used for constructing organizational headquarters, waiting rooms, ticket booths, parking lots, catering service areas, sales counters, storage areas... directly used for production and business (including the area leased to staff for kiosks, shops...).

+ For civil airports, no land rent is charged for runways and safe zones (for civil airports) and the entire area of military airports managed by the Ministry of Defense.

+ Historical sites and scenic spots already classified, only land rent is charged for the area used for commercial services such as souvenir sales counters, food service outlets, and other services.

+ For sports fields, gymnasia, fitness centers, etc., directly managed by local authorities for common benefits and not for commercial purposes, no land rent is charged.

e) Enterprises engaged in mineral extraction, construction materials, etc., must pay land rent for the entire leased area. When parts of the area are returned to the State, the land rent calculation will be adjusted accordingly.

If enterprises have been and are using land without a lease decision from competent State authorities, they temporarily pay land rent for the area already exploited (if not reclaimed and returned to the State) and the area currently being exploited, factory and warehouse areas for raw materials, products, headquarters (offices)... and other facilities serving exploitation.

Organizations permitted to extract minerals underground do not need to pay land rent for unused surface areas.

f) For multi-story buildings shared by multiple units, land rent is calculated for each floor based on allocation coefficients as stipulated in Decree No. 61/CP of the Government dated July 5, 1994, to ensure appropriateness.

g) For residential houses of households, including collective housing within the premises of organizations, if they are not located within the planned residential areas of the State, the organization still needs to pay land rent for the area occupied by these houses.

The organizations using land as guided in Point 1.2 of this Section must self-declare and register to pay land rent. Tax authorities will cooperate with land administration authorities to inspect and verify in necessary cases to ensure accuracy.

2. Subjects Not Required to Pay Land Rent:

2.1. Economic organizations granted land by the State and required to pay land use fees include:

- Organizations using land to construct houses for sale to Vietnamese citizens or for rental;

- Organizations using land to invest in infrastructure construction for transfer or lease of land use rights near such infrastructure.

2.2. Domestic organizations granted land by the State without paying land use fees include:

- State agencies, political and social organizations, and people's armed forces units using land to construct office buildings, for national defense and security purposes; using land to build projects in economic, cultural, social, scientific, technical, and diplomatic sectors without engaging in production and business activities;

- Enterprises, companies use land for public purposes to construct roads, bridges, culverts, sidewalks, water supply and drainage systems, rivers, lakes, dikes, dams, schools, scientific research institutions, hospitals, markets, parks, flower gardens, children's playgrounds, squares, stadiums, airports, ports, and other public works as prescribed by the Government;

- State enterprises, enterprises of political and social organizations, defense and security enterprises, joint-stock companies, limited liability companies, and collective economic organizations use land for agricultural, forestry, aquaculture, and salt production purposes;

2.3. Organizations currently using land with origins from residential land of households and individuals legally use such land for office and factory space for production and business operations after being permitted by competent state authorities;

3. Domestic organizations currently using land that have been allocated by competent state authorities with payment for land use rights, and those who paid the land use fee according to regulations into the state budget before January 1, 1995, where such payments did not originate from the state budget, now according to Decree No. 85/CP dated December 17, 1996 of the Government, if they fall under the category of leasehold land users, must pay the land lease fee starting from January 1, 1997, while those under the category of land allocation with payment for land use rights shall continue to pay the land tax according to the current Ordinance on Real Estate Tax;

4. Organizations currently using land that fall under the category of paying land lease fees must declare and register to pay the land lease fees with the local tax authority according to the form attached in this Circular (Form No. 1);

II. DETERMINATION OF LAND LEASE FEES AND PAYMENT OF LAND LEASE FEES:

1. Determination of annual land lease fees:

Annual land lease fee amount (VND/year)

=

Leased land area (m2)

x

Annual land lease fee rate (VND/m2/year)

Where:

- The area subject to land lease fees is the entire premises managed and used for production and business activities by the organization. This area is determined based on the declaration and registration form submitted by the organization, referring to existing land records of the organization: land transfer documents, production and business operation transfer documents accompanied by land use transfer documents, land lease documents... When officially re-determining the area, it will be adjusted according to actual conditions.

- The annual land rent rate is determined as follows:

Annual land lease fee rate (VND/m2/year)

=

The price per square meter of land is stipulated by the Provincial People's Committee according to Decree No. 87/CP dated August 17, 1994 of the Government

x

The coefficient for determining the land lease fee applicable to each group of business sectors as prescribed in Article 2 of the Framework for Land Lease Fees for Domestic Organizations leased by the State issued together with Decision No. 1357 TC/QĐ/TCT dated December 30, 1995 of the Minister of Finance

Organizations leasing land to build infrastructure in export processing zones and industrial parks must pay the land lease fee according to the rates for physical production, construction, and transportation industries.

In addition to paying the annual land lease fee according to the above rates, organizations leasing land must also compensate for losses suffered by landowners whose land was expropriated for leasing to them according to state regulations.

If the purpose of the leased land is changed with permission from competent state authorities, the land price will be determined according to the new use purpose price table from the date of change, but taking into account specific conditions of each plot to determine an appropriate price.

For large plots of land located deep from the road, the Tax Office will report to the Tax Department for the Tax Department to coordinate with relevant departments based on specific locations to divide into smaller plots to determine prices for each small plot or determine an average price to calculate the land lease fee in accordance with local land prices.

For plots of land used for multiple business purposes with different land lease fees, the area used for each business purpose should be determined to calculate the land lease fee. If the area used for each business purpose cannot be determined, the land lease fee for the main business purpose should be applied to the entire plot. If the main business purpose cannot be determined, the land lease fee for the business purpose with the highest lease rate should be applied.

For the area returned to the state, the land lease fee is calculated up to the handover date. If an organization has requested to return the land but the state has not yet accepted the handover, then one month after the competent state authority receives the request, the organization does not need to pay the land lease fee for this area. The direct land lease fee collection agency must carefully check each specific case to avoid confusion.

The land lease fee for the first year and the last year is determined as follows:

Calculated land lease fee amount		Annual land lease fee amount (VND)		Number of months
for the first year or	=		x	for lease
the last year (VND)		Twelve months		hours worked

2. Time of land lease fee calculation: is determined according to Article 4 of the Framework for Land Lease Fees for Domestic Organizations leased by the State issued together with Decision No. 1357 TC/QĐ/TCT dated December 30, 1995 of the Minister of Finance. Cases temporarily exempted from paying land lease fees according to Circular No. 856 LB/ĐC-TC of the General Department of Land Administration - Ministry of Finance, now falling under the category of paying land lease fees, the time of land lease fee payment starts from January 1, 1997.

3. Payment of land lease fees:

The land lease fee is paid annually and recorded in the annual production and business cost of the leasing organization. If paid in one lump sum for several years, it is allocated over the number of years and recorded in the corresponding annual production and business costs.

Organizations leasing land from the state before January 1, 1996, which have not yet paid the land lease fee, must make back payments.

If an organization pays the land lease fee for 1997 after having already paid the land tax for 1997, the amount of land tax paid can be deducted from the land lease fee according to this Circular.

Land used in a certain locality, the land lease fee is paid into the state budget at the national treasury in that locality. Payments are made twice a year, each time paying 50% of the annual land lease fee. The first payment is due no later than June 30, and the second payment is due no later than October 30 of the same year.

The land rent payment shall be deposited into the State budget at the Treasury according to the current Budget Schedule. The Treasury agency shall handle the collection of land rent payments in accordance with the current regulations.

The organization leasing the land has the obligation to pay the full amount of land rent on time into the State Treasury and shall follow the guidance of the tax authority directly managing the collection of land rent.

4. Exemption and reduction of land rent:

4.1. In cases where organizations leasing land are in the construction survey period for basic construction projects approved by competent authorities, they only need to pay 50% of the annual land rent and this amount can be recorded as part of the basic construction expenses.

4.2. In cases where land rent is paid in one lump sum for multiple years, the reduction of land rent shall be as follows:

- Paying periodically every five years, a reduction of 10% of the total amount payable will be granted.

- Paying periodically more than once every five years, a reduction of 10% for the first five years and an additional 2% for each year starting from the sixth year onwards, calculated progressively, but the maximum reduction shall not exceed 30% of the total land rent payable under the lease agreement.

Example: A company B is leased a plot of land by the State with an annual land rent of 100 million VND. The company pays the land rent for eight years immediately in the first year. The reduction in land rent is calculated as follows:

- Reduction for the first five years: 100 million VND x 5 years x 10% = 50 million VND

- Reduction for the sixth year: 100 million VND x 1 year x 12% = 12 million VND

- Reduction for the seventh year: 100 million VND x 1 year x 14% = 14 million VND

- Reduction for the eighth year: 100 million VND x 1 year x 16% = 16 million VND

Total reduction in land rent = 92 million VND

The total land rent paid upfront for eight years is:

(100 million VND/year x 8 years) - 92 million VND = 708 million VND

4.3. For hotels, guesthouses, and other accommodation facilities operating seasonally; if they fulfill the land rent payment requirements set forth in this Circular and incur losses, they may be eligible for a reduction in land rent. The reduction amount corresponds to the loss incurred, but the maximum reduction shall not exceed 50% of the land rent payable as stipulated.

The decision to reduce land rent as provided herein shall be made by the Director of the Tax Department after reviewing the annual settlement of the organization.

Part II:

ON CONTRIBUTING THE VALUE OF LAND USE RIGHTS OF DOMESTIC ORGANIZATIONS RECEIVING STATE ALLOTTED LAND AND LEASED LAND TO JOINT VENTURES

1. For economic organizations receiving state-assigned land for agricultural, forestry, aquaculture, and salt production purposes:

1.1. In cases of joint ventures with domestic organizations and individuals:

a) If the joint venture continues to use the land for agricultural, forestry, aquaculture, and salt production purposes, the value of the land use rights contributed by the party providing the land shall be agreed upon by both parties, but the land price used to determine the value of the land use rights must not be lower than the land price set by the provincial People's Committee within the framework of the land price range established by the Government.

The value of the land use rights contributed to the joint venture shall be recorded as state capital allocated to the party contributing the land use rights.

Annually, the party contributing the land use rights to the joint venture must pay the agricultural land use tax as prescribed by law, without having to pay land rent or return on investment funds.

b) In cases where the purpose of land use changes, the party contributing the land use rights to the joint venture must convert to the form of state land lease. The value of the land use rights contributed to the joint venture shall be determined based on the land rent paid to the state budget according to the new land use purpose corresponding to the joint venture term, calculated as follows:

Value of the land use rights contributed to the joint venture (VND)

=

Area used for contribution to the joint venture (square meters)

x

Annual rental rate for the new land use purpose (VND/square meter/year)

x

Joint venture term (years)

1.2. In cases of joint ventures with foreign organizations and individuals, such ventures must be permitted by the competent state agencies as stipulated in Decree No. 12/CP dated February 18, 1997 of the Government. The party contributing the land use rights must convert to the form of state land lease. The value of the land use rights contributed to the joint venture shall be determined based on the land rent rates applicable to foreign investment forms in Vietnam during the joint venture term.

2. For organizations receiving state-assigned land that require payment of land use fees:

2.1. In cases of joint ventures with domestic organizations and individuals: The value of the land use rights contributed to the joint venture shall be agreed upon by both parties but must not be lower than the land use fee payable to the state budget at the time of the joint venture contribution.

The party contributing the land use rights to the joint venture must pay the land tax according to the current Law on Land Tax throughout the joint venture term.

2.2. In cases of joint ventures with foreign organizations and individuals: The value of the land use rights contributed to the joint venture shall also be agreed upon by both parties but must not be lower than the value of the land use rights calculated based on the land rent rates applicable to foreign investment forms during the joint venture term.

3. For organizations receiving state-leased land:

3.1. In cases of joint ventures with domestic organizations and individuals: The value of the land use rights contributed to the joint venture shall be agreed upon by both parties but must not be lower than the value of the land use rights calculated based on the area of land used for the joint venture contribution multiplied by the land rent rate for domestic organizations multiplied by the joint venture term.

3.2. In cases of joint ventures with foreign organizations and individuals: The value of the land use rights for the joint venture contribution shall be agreed upon by both parties but must not be lower than the land rent rates applicable to foreign investment forms in Vietnam during the joint venture term.

3.3. In cases where an organization has prepaid the land rent for the entire lease period after the joint venture contribution date, the prepayment amount shall be deducted from the land rent payable. In cases where the party contributing the land use rights had paid the land use fee in cash before September 9, 1996, which was not sourced from the state budget, during the joint venture term, the party contributing the land use rights may deduct the land use fee already paid from the annual land rent payable according to Part III of this Circular.

The Subject contributing land for joint venture as specified in item b point 1.1 and point 1.2 Section I, point 2.2 Section 2 and Section 3 Part II must pay land rent to the State in accordance with the provisions of Section 4 Part II of this Circular.

4. Provisions on the refund of land rent for organizations permitted to use the value of land use rights to contribute capital to joint ventures with domestic and foreign organizations and individuals:

4.1. Based on the decision allowing the use of the value of land use rights to contribute capital to joint ventures issued by the competent state agency and upon the request of the joint venture parties, the Debtor-Creditor Council chaired by the Provincial Department of Finance shall cooperate with the Provincial Land Administration, Tax Office, State Capital Management Agency, and the relevant supervisory authority (for state-owned enterprises) to inspect, review, and determine the total amount of land rent contributed to joint ventures throughout the joint venture period. The party contributing land capital must sign a debt acceptance contract with the Department of Finance (in accordance with Model No. 2 attached to this Circular) and have a plan to repay the land rent in subsequent years. The organization does not need to pay capital usage fees for the portion of joint venture capital contributed through the value of land use rights.

4.2. The time for repaying the land rent shall be implemented from when the joint venture begins to generate profits or from when there are profits according to the project approved by the competent state agency, but no later than five years from the date of the land lease decision.

4.3. The amount of land rent to be refunded annually shall be calculated as follows:

Amount of land rent		Value of land use rights contributed to joint venture (VND or USD) to be refunded in one year
(VND or USD)	=
Time limit for the project to generate profit		approved (years) 4.4. The place and period for paying land rent shall be carried out similarly to the payment of land rent prescribed in Part I of this Circular.

PROVISIONS ON THE HANDLING OF ORGANIZATIONS THAT HAVE PAID LAND USE FEES WITH FUNDS NOT FROM THE STATE BUDGET AND ARE NOW SUBJECT TO TRANSITION TO PAYING LAND RENT

Part 3:

1. Land considered to have paid land use fees must be land that the organization has fully paid for in accordance with regulations and has valid documentation proving it falls under one of the following cases:

- When allocated land, the organization has paid compensation for losses according to Decision No. 186/HĐBT dated May 31, 1990 of the Council of Ministers (now the Government) regarding compensation for agricultural land and forested land when changing to other purposes;

- An organization purchasing a house together with the right to use the land on which the house stands, where the seller has paid income tax according to the Income Tax Ordinance for high-income earners;

- Paid land use fees into the state budget according to Circular No. 60 TC/TCT dated July 16, 1993 of the Ministry of Finance when allocated land instead of paying the value of construction works;

- Purchased state-owned houses or houses from state-owned real estate companies according to Decree No. 61/CP dated July 5, 1994 of the Government on buying and selling residential properties;

- Paid land use fees according to Decree No. 89/CP dated August 17, 1994 of the Government on collecting land use fees and land administration fees.

2. Domestic economic organizations allocated land by the State, now subject to the transition to paying land rent as stipulated in Clause 3 Article 1 of the Ordinance amending and supplementing certain articles of the Ordinance on the rights and obligations of domestic organizations allocated land and leased land by the State dated August 27, 1996, must pay land rent to the state budget as follows:

a) If they have not paid land use fees or have paid land use fees but the funds come from the state budget, they must pay land rent to the State from November 1, 1996, in accordance with the guidelines of this Circular.

b) In the case where the organization has fully paid land use fees in accordance with regulations using funds not from the state budget and is now subject to transitioning to paying land rent (including organizations granted land by the state that must pay land use fees using the value of land use rights to contribute capital to joint ventures with domestic and foreign organizations), the amount of land use fees already paid shall be deducted from the land rent as follows:

- If the amount of land use fees already paid is greater than or equal to the amount of land tax due, the organization will not need to pay land rent during the entire rental period;

- If the amount of land use fees already paid is less than the amount of land rent due during the rental period, the land use fees already paid shall be deducted annually until exhausted, after which the organization must continue to pay land rent in accordance with the law.

3. Organizations currently using land derived from legally used residential land of households and individuals, after being allowed by the competent state agency to use such land areas for offices and factories for production and business operations, do not need to convert to paying land rent; these organizations will still pay land tax according to the current Land Tax Ordinance.

Other cases of land use by households and individuals shall pay land rent to the state budget from January 1, 1997, in accordance with this Circular.

1. Domestic economic organizations allocated land by the State before September 9, 1996, who declared incorrectly the amount of land use fees paid shall be punished according to the Administrative Violation Handling Ordinance.

Part 4:

VIOLATIONS, REWARDS AND COMPLAINTS

2. Organizations permitted by the competent state agency to use the value of land use rights to contribute capital to joint ventures with domestic and foreign organizations and individuals who intentionally agree on incorrect values for joint venture contributions and fail to comply with state regulations shall compensate the State for damages.

Organizations permitted to use the value of land use rights to contribute capital to joint ventures who do not sign a debt acceptance contract for the value of land use rights contributed to joint ventures shall have the Department of Finance cooperate with relevant authorities to determine the annual repayment period and amount based on related documents and notify the organization to implement accordingly.

An organization permitted to use the value of land use rights to contribute capital in a joint venture shall, if it does not enter into a debt repayment contract for the contributed joint venture capital based on the value of land use rights, be subject to the Department of Finance, in conjunction with relevant competent authorities, determining the annual repayment period and amount based on related documentation, and notifying the organization thereof for implementation.

3. If an organization using land that falls under the category required to register and pay land rent does not properly declare and register for land rent payment according to the guidance in this Circular, the Director of the Tax Revenue Office shall base on investigation materials and land usage files provided by the People's Committee of communes, wards, towns or land administration agencies, and has the authority to decide on the contents specified in Part II, Model No. 1 attached to this Circular, report to the Department of Finance, the Taxation Department, and notify the organization to be aware of paying the land rent.

If an organization fails to pay the land rent or fine within the prescribed time limit, in addition to having to fully pay the amount of land rent and fine as stipulated, they must also pay a daily late fee of 0.2% on the overdue amount.

If an organization renting land deliberately delays or refuses to pay the land rent and fines, the tax authority has the right to request the bank to deduct money from the organization's bank account to pay the land rent and fines (if applicable) into the State Treasury.

4. Any organization or individual who abuses their position or power to misappropriate, embezzle, or cause loss of land rent must compensate the State for the full amount misappropriated, embezzled, or lost, and depending on the level of violation, may be subject to disciplinary action and criminal prosecution according to the provisions of the law.

5. Individuals who discover violations as stipulated in this Circular will be rewarded according to the general regulations of the State.

An organization leasing land has the right to appeal related issues to the local Tax Department; while waiting for resolution, the appellant must pay the full and correct amount of land rent and fines (if applicable) as reported. An organization permitted to use the value of land use rights to contribute capital to joint ventures has the right to appeal related issues to the local Department of Finance. In case of disagreement with the decision of the resolution agency, they have the right to appeal to the immediate superior agency of the decision-making agency. The decision of the Minister of Finance is the final decision.

The agency receiving appeals is responsible for resolving them within thirty days from the date of receipt. If there is no resolution beyond this period, the person authorized to resolve the appeal shall be responsible for the consequences caused by delayed processing.

Part 5:

IMPLEMENTATION

1. The People's Committees of provinces and centrally-administered cities are responsible for directing the Departments of Finance, Tax Departments, State Capital Management Agencies at enterprises, People's Committees of districts, counties, towns, and cities under provinces; organizations currently using land within their jurisdiction to fully implement the guidance contents in this Circular.

2. The General Department of State Capital Management at Enterprises is responsible for directing State Capital Management Agencies at enterprises to cooperate with the Departments of Finance to urge, guide, and inspect state-owned enterprises in the locality to comply with the provisions of this Circular.

3. The General Department of Taxation is responsible for directing Tax Departments and Tax Revenue Offices in localities:

3.1. Within fifteen days from the date of receipt of the declaration form submitted by the land-leasing organization sent by the Department of Land Administration, the Tax Revenue Office shall check and calculate all indicators of the declaration form and prepare a Summary Table of Registration for Land Rent Payment to report to the Tax Department for consolidation and submission to the local Department of Finance. In case the Department of Land Administration has not yet sent the declaration form, the Tax Revenue Office shall be responsible for guiding the organization to submit the declaration form to the Tax Revenue Office (Model No. 1 attached to this Circular).

3.2. For organizations using land in the area before January 1, 1995, which continue to use it until now, the Tax Revenue Office must verify and confirm the data of the declaration form to determine the categories: land lease, land allocation without payment of land use fee, land allocation with payment of land use fee, to organize the collection of annual land rent and land tax; determine the paid land use fee to offset against the land rent for organizations in the land lease category, recover the unpaid land use fee if the organization is in the land allocation with payment of land use fee category but has not paid according to the prescribed regulations, handle cases where the land use value is used for joint venture capital contributions, and other related issues.

After completing these tasks, the Tax Revenue Office is responsible for reporting specifically to the Tax Department to consolidate the results of determining the categories of land allocation without payment of land use fee, land allocation with payment of land use fee, and land lease, to be sent to the Department of Finance and the Department of Land Administration.

Within thirty days after receiving the report from the Tax Department, the Department of Land Administration and the Department of Finance are responsible for participating with the Tax Department to determine the land users as guided above. If there is no opinion within this period, it is considered as agreement with the determination result of the Tax Department.

Based on the above determination results, the Tax Department temporarily directs the annual collection of land rent and must adjust it after receiving the land lease decision from the competent state agency or upon discovering incorrect declarations compared to actual land use.

Cases of land leasing after January 1, 1995, shall collect land rent according to the decision of the competent state agency.

3.3. Organizations shall collect land rent from organizations required to pay land rent and implement reductions in land rent according to the provisions of this Circular.

4. The Departments of Finance of provinces and centrally-administered cities are responsible for: - Taking the lead in coordinating with relevant sectors to inspect and review agreements on the value of land use rights for joint venture capital contributions by organizations allocated land or leased land by the State, based on which to determine the value of land use rights for joint venture capital contributions; serving as the Chairman of the Debt Transfer Council, representing the council to sign the Debt Transfer Contract for land rent with organizations using the value of land use rights for joint venture capital contributions;

- Based on the report of the local Tax Department as specified in Point 3.2, Section 3, Part V of this Circular, provide opinions for the Tax Department to organize the collection of land rent; coordinate with relevant sectors to submit to the provincial People's Committee for approval of organizations eligible for land lease, land allocation with payment of land use fee, as the basis for the tax authorities to organize the collection of land rent, land tax, and land use fee.

5. The People's Committee of the commune, ward, or town shall be responsible for providing the Tax Revenue Office with information on the land use situation of organizations, including private businesses within their jurisdiction, according to Model No. 3 attached to this Circular.

6. Land that has already paid rent as stipulated in this Circular shall not be subject to land tax.

This Circular takes effect fifteen days from the date of signature and replaces Part III - Payment of Land Rent of Joint Circular No. 856 LB/DC-TC dated July 12, 1996 issued by the Ministry of Finance and the General Department of Land Administration, and the section guiding the recognition of debt and repayment of state capital as land rent in Circular No. 19 TC/TCDN dated June 9, 1992 issued by the Ministry of Finance.

Any previous guidance that contradicts this Circular shall be abolished.

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

Nguyen Sinh Hung (Signed)

FORM NO. 1

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

APPLICATION FORM

REGISTRATION FOR PAYMENT OF LAND RENT

Name of registering entity:...

Belongs to ministry (sector, locality):...

Address (office of the organization):...

Phone number:...

Business sector:...

I. Declaration Section of the Registering Entity

1. Land plot name:

2. Location (position) of land:

3. Total area (m2):

Of which: - Area of land allocated with payment for land use rights (m2):

- Area with decision to lease or allocate land without payment for land use rights (m2):

4. Origin of the land plot:

- Origin of the land plot:

- Map number (if any):...date.../.../...

Certificate (if any):...date.../.../...issued by...

5. Area of land based on actual use purpose (m2):

- Area belonging to Group 1 (m2):

- Area belonging to Group 2 (m2):

- Used for other purposes (m2):

- Currently occupied (m2):

- Not currently in use (m2):

6. Situation of payment for land use rights:

- Amount paid:...VND.

- Payment voucher number:...dated.../.../...

- Source of funds used for payment:

7. Suggestions of the land user:

- Area of land requested to lease and pay rent (m2):

- Area of land requested to return to the State (m2):

8. List of related documents:

- ....................

- .....................

- .....................

- .....................

Commitment:

The above declaration is accurate; if incorrect, the party will bear responsibility under the law.

Confirmation of the People's Committee of the commune, ward,	Date...month...year 19...
town where the leased land is located	Head of the unit
(Signature, stamp)	(Signature, stamp)

II. Calculation Section of the Tax Revenue Office:

1. Land allocated with payment for land use rights:

- Area:...m2

- Type of land (**):

- Type of land:

- Amount of land use fee payable according to regulations:...VND

- Amount of land use fee already paid:...VND

+ From state budget:...VND

+ Not from state budget:...VND

2. Leased land:

- Area:...m2

- Type of land (**):

- Type of land:

- Land price:...VND/m2

- Annual land rental rate:...VND/m2/year

- Annual land rent amount:...dong

- Amount exempted or reduced:...VND

3. Land returned to the State:

Area:...m2

Date...month...year...
Inspector-in-Charge of the Tax Revenue Office
(Signature, stamp)
III. Verification Section of the Department of Finance regarding the basis for determining land rent:

	Date...month...year...
Verifier	Director of the Department of Finance
(Signature, stamp)	(Signature, stamp)

Note:

- Each piece of land shall use one registration form.

- (**) Record the type of land according to the name of the land types specified in Decree No. 87/CP dated August 17, 1994 of the Government.

- Organizations declaring and registering according to this form replace the application form for payment of land and water surface rent issued together with Decision No. 1357 TC/QD/TCT dated December 30, 1995 of the Minister of Finance.

MODEL NO. 2

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

CONTRACT

TRANSFER OF DEBT OF LAND USE RIGHT VALUE FOR JOINT VENTURE CAPITAL CONTRIBUTION

Based on Circular No.:...TC/QLCS dated... October 1997 of the Ministry of Finance;

Based on Decision No....of...permitting...to contribute the value of land use rights to joint venture with...for the purpose of:...

Based on the declaration form and agreement between the parties;

After examination and verification,

Today, the...day...month...year...

At:...

The Debt Transfer Council consists of:

A- DEBTOR PARTY:

1. Representative of the Department of Finance:

Mr./Ms:...Position:..., Chairman of the Board

2. Representative of the Department of Land Administration:

Mr./Ms:...Position:...

3. Representative of the Tax Bureau

Mr./Ms:...Position:...

4. Representative of the State Capital and Asset Management Bureau at enterprises:

Mr./Ms:...Position:...

B- DEBT RECIPIENT PARTY:

1. Representing: (name of organization)...

Mr./Ms:...Position:...

2. Head office:...

3. Account number:...

Open at Bank:...

C. BOTH PARTIES AGREE ON THE DEBT TRANSFER CONTRACT FOR LAND RENT, WATER SURFACE RENT, AND COASTAL AREA RENT AS FOLLOWS:

1. Party A allows Party B to use the value of land use rights amounting to:...VND (or USD) to contribute to joint venture with...for a period of:...years, starting from the...day...month...year...

2. Purpose of use:...

3. Location of the land plot (lot) at...

4. Land area:...

5. The total amount of debt Party B receives from Party A is...VND (or USD)

6. Party B is responsible for fully repaying the aforementioned debt to the state budget from the...day...month...year...to the...day...month...year...

7. The amount to be repaid annually is...VND (or USD)

8. The payment period and amount per payment each year shall follow the current regulations of the state and instructions of the revenue collection agency.

9. This contract is established in five copies:

- One copy retained by the Department of Finance.

- One copy retained by the Tax Bureau.

- One copy retained by the State Capital and Asset Management Bureau at enterprises.

- One copy retained by the Department of Land Administration.

- One copy retained by the land leasing entity.

	Vice-Chairman of the Council
Representative of organization	Representative of the Department of Finance
(Signature, stamp)	(Signature, stamp)