Joint Circular No. 856/LB/ĐC-TC guiding domestic organizations in preparing land lease registration files and paying land lease fees.

JOINT CIRCULAR

Guidelines for domestic organizations to prepare land lease registration files and pay land lease fees

leasing land and paying land lease fees

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Pursuant to the Ordinance on the rights and obligations of domestic organizations granted land use rights and land leases by the State dated October 14, 1994;

Pursuant to Decree No. 18/CP dated February 13, 1995 of the Government detailing the implementation of the Ordinance on the rights and obligations of domestic organizations granted land use rights and land leases by the State;

Pursuant to Directive No. 245/TTg dated April 22, 1996 of the Prime Minister on organizing the implementation of urgent matters in the management and use of land by domestic organizations granted land use rights and land leases by the State;

Pursuant to the opinion of the Prime Minister in Official Letter No. 7463/KTN dated December 30, 1995 of the Government Office;

Pursuant to Decision No. 1357/TC/QĐ/TCT dated December 30, 1995 of the Minister of Finance setting the framework for land lease fees for domestic organizations leased land by the State,

The Ministry of Finance and the General Department of Land Administration jointly issue guidelines for preparing land lease files and paying land lease fees for domestic organizations as follows:

Part 1:

GENERAL PROVISIONS

1. Domestic organizations include: State-owned enterprises, enterprises of political and social organizations; defense and security enterprises; joint-stock companies, limited liability companies, private enterprises, collective economic organizations currently using land for production and business purposes other than agricultural, forestry, aquaculture, and salt production must prepare land lease application files according to the guidelines set forth in this Circular.

2. Agricultural, forestry, aquaculture, and salt production enterprises must declare and register land leases for areas of land used to construct offices (headquarters), repair workshops, processing facilities, and service businesses.

3. Domestic organizations currently using land that has been allocated by competent state authorities with payment for land use rights, organizations that have paid land use fees in accordance with regulations into the State budget before January 1, 1995, where such payments did not originate from the State budget, may temporarily refrain from land lease procedures and payment of land lease fees. Such organizations will continue to pay land tax according to the current Law on House and Land Tax.

4. Situations considered as having paid land use fees into the State budget include:

a) Payment of land use fees as stipulated in Decree No. 89/CP dated August 17, 1994 of the Government;

b) Payment of compensation for losses due to conversion of agricultural land and forested land to other purposes pursuant to Decision No. 186/HĐBT dated May 31, 1990 of the Council of Ministers (now the Government);

c) Payment of land use fees as stipulated in Circular No. 60 TC/TCT dated July 16, 1993 of the Ministry of Finance for the following cases: purchasing state-owned houses along with receiving land use rights for those houses; being allocated land for construction of residential buildings and facilities; being allocated land instead of payment for the value of infrastructure construction projects and non-state-owned houses along with receiving land use rights for those houses;

d) Purchasing state-owned houses pursuant to Decree No. 61/CP dated July 5, 1994 of the Government;

e) Organizations purchasing houses along with receiving land use rights for those houses which are subject to income tax under the Ordinance on Income Tax for High-Income Individuals.

5. All cases previously subject to house and land tax now falling within the scope of land lease obligations shall only pay land lease fees as prescribed, without paying land tax.

6. Provincial People's Committees (hereinafter referred to as provincial-level People's Committees) shall conduct the identification of organizations temporarily exempted from land leasing; organizations required to transition to land leasing, and issue land lease decisions for each organization; compile detailed reports on these cases to be submitted to the Prime Minister for concurrent submission to the Ministry of Finance and the General Department of Land Administration for monitoring.

7. After issuing the land lease decision, the lessee must sign a land lease contract with the Department of Land Administration; register payment of land lease fees with the local tax authority.

Part II:

PROCEDURES FOR PREPARING LAND LEASE APPLICATION FILES

The land lease application file includes:

1. Application for land lease (Form No. 1)

2. Copy of land use declaration form (based on the land use survey form declared by the organization)

3. Declaration form for registration of land lease fee payment (Form No. 5)

4. Extract from the cadastral map of the land area at the current scale (Form No. 2)

In cases where the locality does not have a cadastral map, the lessee must organize surveys to prepare technical land parcel files in accordance with current regulations of the General Department of Land Administration.

These types of maps must be reviewed and confirmed by the Department of Land Administration.

5. Other related documents (Decisions on establishment, business registration certificates, etc.)

The land lease application file should be prepared in three copies and submitted to the Department of Land Administration for forwarding to:

- Provincial-level People's Committee;

- Department of Finance and Price Control;

- Retained at the Department of Land Administration.

The Department of Land Administration is responsible for working with the Department of Finance and Price Control, the Tax Bureau, and relevant agencies to review the files, prepare reports on the results of the reviews, draft proposals, and draft decisions on land leasing to be submitted to the Chairman of the Provincial-level People's Committee for approval. The land lease decision should be prepared in five copies and sent to the leasing organization, the Department of Land Administration, the Department of Finance and Price Control, the local Tax Bureau, and retained at the Provincial-level People's Committee. Based on the land lease decision issued by the Provincial-level People's Committee, the Department of Land Administration:

- Sign the land lease contract (Form No. 4)

- Guide the lessee to register in the land registry in accordance with current regulations.

- Prepare the certificate of land use rights for submission to the Provincial-level People's Committee for signature and issuance to the lessee.

- Guide and inspect the preparation and updating of land registry files at the provincial, district, and commune levels in accordance with regulations.

Part 3

PAYMENT OF LAND RENT

I. OBJECTS REQUIRED TO PAY LAND LEASE FEES:

1. Domestic organizations currently using land as specified in Article 1 of the Framework for Land Lease Fees for Domestic Organizations Leased Land by the State issued together with Decision No. 1357/TC/QĐ/TCT dated December 30, 1995 of the Minister of Finance who have not yet paid land use fees, or have paid land use fees from sources originating from the State budget, or have been leased land by competent state authorities are all required to pay land lease fees according to the guidelines set forth in this Circular.

2. In case an organization is using land that belongs to the lawful land use rights of a household, individual who has been permitted by a competent state agency to construct offices, production facilities, or business premises, such organizations shall temporarily not be required to pay rent for the land; however, they must still pay land tax according to the current Law on Land Tax.

II- DETERMINATION OF LAND RENT AND REGISTRATION FOR PAYMENT OF LAND RENT

1. Determination of annual land lease fee:

Amount of land rent = Area of land for lease (square meters) x Rent price per square meter per year

rent for 1 square meter of land for one year (in dong)

(dong/square meter/year)

Where:

- The area subject to land rent is the entire area managed and used by the organization.

- The annual land rent rate is determined as follows:

The unit price of 1 square meter of land is determined by the rental land pricing coefficient applied to

prices set by the People's Committee of each province and city for different business sectors

The rent price per square meter of land is determined by the coefficient applied to each group of business activities as stipulated in Article 2 of the Guideline on the framework for land rental prices for domestic organizations issued with Decision No. 1357/TC/QĐ/TCT dated December 30, 1995 by the Minister of Finance.

land 1 = central government prescribed framework rental land prices for

determined according to Government Decision number 87/CP dated August 17, 1994 for domestic organizations renting land

(dong/square meter/year) as stipulated in Decision number 1357/TC/QĐ/TCT issued together with

dated December 30, 1995 by the Minister of Finance

of the Government

The rent price does not include compensation costs and clearance expenses.

If the land for lease is permitted by a competent state agency to change its purpose of use, the land price will be determined according to the price list with the new purpose of use from the date of changing the purpose of use, but taking into account the specific conditions of each plot of land to determine the appropriate price.

For plots (plots) of land that are wide and deep compared to the road, based on their specific location, they may be divided into smaller plots to determine the price for each small plot or determine the average price to calculate the land rent appropriately.

For plots (plots) of land used for multiple business activities with different rental prices, the area used for each activity should be determined to calculate the land rent. If it is not possible to determine the area used for each activity, the rental price for the main production and business activity should be applied to the entire plot (plot).

For the portion of the area returned to the State, the land rent shall be calculated up to the handover time.

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

Amount of land rent for the first year or last year = Amount of land rent for one year x Actual number of months

for the first year of a one-year lease period

or the last year = actual usage

12 (months)

2. The time for calculating land rent is determined according to the provisions of Article 4 of the Guideline on the framework for land rental prices for domestic organizations issued with Decision No. 1357/TC/QĐ/TCT dated December 30, 1995 by the Minister of Finance.

3. Payment of land rent

Land rent is paid annually and recorded in the annual production cost of the leasing organization. If paid in advance for several years, it shall be allocated over the number of years and recorded in the corresponding annual production cost.

If the land rent for 1996 is paid after paying the land tax for 1996, the amount of land tax already paid shall be deducted from the land rent according to this Circular.

Organizations that were granted land before January 1, 1995 and have paid the land use fee with funds from the State budget, now switching to renting the land and paying rent, shall not deduct the previously paid land use fee from the land rent payable.

Land used in a district, county, town, city under a province shall be paid into the National Treasury at the district, county, town, city level according to the schedule, twice a year, each time paying 50% of the annual land rent. The first payment is due no later than June 30, and the second payment is due no later than December 15 of the year. For 1996, the first land rent and any previous land rents (if applicable) must be paid no later than September 30, 1996.

Land rent is paid into the National Treasury according to the Chapter, Type, Item, and Category currently in effect, and Item 21 of the current Budget Manual. The Treasury Office will process the payment according to current regulations.

Leasing organizations are obligated to pay the land rent on time, in full, into the National Treasury and follow the guidance of the direct tax collection authority.

Reductions in land rent are implemented according to the provisions of Article 8 of the Guideline on the framework for land rental prices for domestic organizations issued with Decision No. 1357/TC/QĐ/TCT dated December 30, 1995 by the Minister of Finance.

Organizations leasing land during the basic construction survey period according to approved economic-technical justification only need to pay 50% of the annual land rent and record it in the construction cost.

Part 4:

SANCTIONS AND REWARDS

1. If an organization leasing land fails to properly declare and pay the land rent as guided by this Circular, the Director of the Tax Revenue Office, based on investigation materials and land use records provided by the People's Committee of the commune, ward, town, district, county, town, city, has the right to decide on the contents specified in Part II, Form No. 5 of this Circular, report to the Department of Finance and Price Control, the Tax Bureau, and notify the organization to fulfill the payment of land rent.

If the land rent or fine is not paid on time, in addition to paying the full amount of rent and fine as prescribed, a daily penalty of 0.2% on the overdue amount must also be paid.

If the leasing organization continues to delay and refuse to declare and pay the land rent, the tax authority has the right to request the bank to transfer funds from the organization's bank account to pay the land rent and any fines (if applicable) into the National Treasury; simultaneously, the organization may be suspended from using the land or have the land lease decision revoked.

2. Complaints:

- Complaints and resolution of land disputes shall be carried out according to the current laws.

- Leasing organizations have the right to complain about issues related to land rent to the local Tax Bureau where the leased land is located. If dissatisfied with the resolution of the Tax Bureau, they can appeal to the General Tax Department; if dissatisfied with the resolution of the General Tax Department, they can appeal to the Ministry of Finance.

The decision of the Minister of Finance is final.

- The agency receiving the complaint shall be responsible for resolving it within thirty days from the date of receipt. If there is no resolution beyond this period, the person authorized to handle the complaint shall bear responsibility for the consequences caused by the delay in processing.

3. Organizations or individuals who take advantage of their positions or powers to embezzle, misappropriate, or cause the loss of land rental fees must compensate the State for the full amount embezzled, misappropriated, or lost, and depending on the severity of the violation, they may be subject to disciplinary action or criminal liability as prescribed by law.

4. Tax authorities and land administration agencies, if they determine and collect the wrong amount of land rental fees, must return the entire amount of loss suffered by the organization leasing the land, no later than thirty days from the date of discovery.

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

Part 5

IMPLEMENTATION

1. Provincial People's Committees under the direct jurisdiction of the Central Government shall be responsible for directing the Department of Land Administration, the Department of Finance and Price Control, the Agency for State Capital and Asset Management at Enterprises, the Taxation Service, District, County, City, and Town People's Committees under the province; organizations currently using land within their jurisdiction to fully implement all contents guided in this Circular.

2. The General Department for State Capital and Asset Management at Enterprises shall be responsible for directing the Agencies for State Capital and Asset Management at Enterprises to cooperate with the Department of Finance and Price Control (Property Management Division) to urge, guide, and inspect units within the local area to declare and register according to the provisions of this Circular.

3. The General Department of Taxation is responsible for directing Tax Bureaus and Local Tax Offices:

- Verify and check the data, calculate the indicators in the declaration form of the organization using land within the area (Form No. 5); and then immediately send the declaration form for payment of land rental fees of the leasing organization to the Department of Finance and Price Control for review;

- Collect land rental fees annually;

- Implement exemptions and reductions in land rental fees as stipulated in Article 4 of the Framework Pricing Regulation for Land Rental issued together with Decision No. 1357/TC/QĐ/TCT dated December 30, 1995 of the Minister of Finance.

4. The Department of Land Administration shall be responsible for sending the declaration form for payment of land rental fees (four copies) to the Tax Collection Office within fifteen days from the date of receipt of the declaration form of the leasing organization; the Tax Collection Office shall verify and calculate all indicators of the declaration form and prepare a summary report on registration for payment of land rental fees in the area to be reported to the Taxation Service and the Department of Finance and Price Control of the locality.

5. For administrative and service organizations and military units that use part of the land area for business purposes, they must declare according to Form No. 5 for that part of the area, pay the land rental fee, and await further processing.

6. Organizations that have not yet completed the application file for land leasing must go to the Tax Collection Office to be guided in filling out the declaration form for payment of land rental fees. The Tax Collection Office temporarily collects the land rental fee and fully informs the Department of Land Administration for monitoring.

This Circular takes effect from the date of signature. During implementation, if any difficulties arise, please reflect them to the Ministry of Finance and the General Department of Land Administration for research and resolution.