Circular No. 89-TC/TCT guiding the implementation of Decree No. 74-CP dated October 25, 1993 of the Government detailing the implementation of the Law on Agricultural Land Use Tax

CIRCULAR

OF THE MINISTRY OF FINANCE NO. 89-TC/TCT ON NOVEMBER 9, 1993 GUIDING THE IMPLEMENTATION OF DECREE NO. 74/CP OF OCTOBER 25, 1993 OF THE GOVERNMENT PROVIDING DETAILS FOR THE IMPLEMENTATION OF THE LAW ON LAND USE TAX FOR AGRICULTURAL LAND

Implementing the Law on Land Use Tax for Agricultural Land adopted by the National Assembly, Ninth Session, on July 10, 1993, and Decree No. 74/CP of October 25, 1993 of the Government providing details for the implementation of this Law, the Ministry of Finance provides detailed guidance as follows:

I. SCOPE OF APPLICATION OF THE LAND USE TAX FOR AGRICULTURAL LAND

1. Organizations and individuals subject to the land use tax for agricultural land have been specified in Article 1 of the Law on Land Use Tax for Agricultural Land and in Article 1 of Decree No. 74/CP dated October 25, 1993 of the Government, specifically adding: cooperatives and agricultural production groups shall be taxpayers only in cases where localities have not yet completed the process of allocating agricultural land to individual households, and cooperatives and production groups still pay taxes collectively.

2. Types of land subject to the land use tax for agricultural land have been stipulated in Article 2 of the Law on Land Use Tax for Agricultural Land and in detail in Article 2 of Decree No. 74/CP dated October 25, 1993 of the Government, which are further explained as follows:

- The People's Committee of a commune that uses agricultural land from the communal land fund allocated for public needs and leases it to households or individuals is the taxpayer for the land use tax for agricultural land.

- Aquaculture land subject to the land use tax for agricultural land includes specialized aquaculture land or land used both for aquaculture and agriculture, primarily not used for other purposes, including paddy fields, water surfaces, ponds, lakes, reservoirs, streams, canals, and short rivers that are enclosed and have a designated user.

- Grassland subject to the land use tax for agricultural land is land allocated to users for grass cultivation that can also be used for livestock grazing.

- Forest land subject to the land use tax for agricultural land includes forest land planted, cared for, and harvested by a designated owner, and garden forests adjacent to houses.

3. Types of land exempt from the land use tax for agricultural land have been specified in Article of Decree No. 74/CP dated October 25, 1993 of the Government, with additional clarifications provided for certain cases as follows:

- Reservoirs for hydroelectric power plants that combine tourism and aquaculture services;

- Lakes and ponds used for business, tourism, and services combined with aquaculture;

- Cage fish farming in lakes, ponds, and rivers;

- Land leased by the Government and People's Committees at various levels to organizations, households, and individuals for agricultural production, where rent payments include land use tax for agricultural land, except for land leased by the Commune People's Committee for communal public needs as mentioned in Section I of this Circular.

II. BASIS FOR CALCULATING TAX AND TAX RATES

1. Determination of taxable area: In accordance with the provisions of Decree No. 74/CP dated October 25, 1993, all organizations and individuals using land for agricultural production, including those exempted or temporarily exempted from tax, must declare the area of each plot of farmland or land used for agricultural production according to the guidelines of the tax authority by November 30, 1993.

The taxable area of each plot of farmland or land is the actual area used, including the surrounding dikes directly serving the production of the plot, excluding parts of the dikes used for internal farm traffic or shared among one or more plots.

a. The determination of the taxable area for each household must be based on the declaration of the household, while also relying on the following documents to verify the accuracy of the declaration:

- The area currently taxed for agricultural land in 1993, and the area of newly reclaimed land that has reached the taxable period;

- The most recent measurement results confirmed by the land management agency of the district, county, town, or city under the province (referred to as the district in this document). If the locality has not conducted measurements or the measurement data is inaccurate, then the following materials should be used: maps, old boundaries, documents on land allocation or contracting, family economic land, decisions on land allocation for enterprises, forestry, and agriculture (agricultural farms, forestry farms, stations, etc.).

b. The procedure for determining the taxable area is as follows:

- Households using land self-declare the area of allocated land, contracted land, and reclaimed land, collectively referred to as the land currently being used, according to the model form provided by the tax authority and submit the declaration to the People's Committee of the commune, ward, or town (referred to as the commune in this document) for households that establish tax registers at the commune level, or to the District Tax Office for households that establish tax registers at the district level, within the time and place specified in Article 9 of Decree No. 74/CP dated October 25, 1993 of the Government;

- The tax team of the commune assists the People's Committee of the commune in receiving declarations, checking, and comparing the declarations of each household paying tax with existing documents as mentioned above, to determine the taxable area for each household.

During the process of determining the taxable area for agricultural land use tax, the tax authority must work together with the commune tax advisory council to examine each case in detail. If the declaration is found to be inaccurate, they must request the household to resubmit the declaration and organize spot checks to accurately determine the taxable land area of households with inaccurate declarations.

In cases where there is a discrepancy between the measured area and the declared taxable area of a household paying tax or of a commune or district, the taxable area for 1994 will be temporarily approved based on the declaration of each household. The District People's Committee will coordinate with the provincial land management agency to immediately re-measure the area starting from the first quarter of 1994 to calculate, collect, and settle the tax based on the re-measured area by the end of the year.

The tax team of the commune informs each household paying tax about the determined taxable area, compiles the information, and assists the People's Committee of the commune in reporting to the District People's Committee and the District Tax Office.

2. Classification of land for taxation is carried out in accordance with the provisions of Decree No. 73/CP dated October 25, 1993 of the Government, which will be separately guided by another document.

3. The tax rate table is stipulated in Article 8 of Decree No. 74/CP dated October 25, 1993 of the Government, guiding the calculation of tax as follows:

- Clause 1 applies to annual crop land, aquaculture land, and grassland used for livestock grazing;

- Clause 2 applies to perennial crop land.

- For annual crop land converted to perennial fruit trees, the tax category remains that of the previously determined annual crop land, but the tax is calculated at 1.3 times the annual crop land tax rate if it belongs to categories 1, 2, or 3; for categories 4, 5, and 6 of annual crop land converted to perennial fruit trees, the tax is collected as for annual crop land of the same category. This provision only applies from after the approval of the agricultural land use tax category. Perennial fruit trees planted on annual crop land before the classification of land for agricultural land use tax purposes shall be classified and taxed as perennial crop land.

- For timber and other perennial crops harvested once, the tax is levied at 4% of the value of the harvest.

III. CALCULATION OF TAX AND TAX RECORDS

1. Calculation of Tax.

- Based on the tax declaration submitted by households sent by the commune, the Tax Office together with the commune tax team will review and verify the tax calculation basis of the tax-paying household on the declaration form. If any errors are found, they will request the Commune People's Committee to provide detailed explanations.

- Based on the verified tax declaration of the household, the accounting or tax processing unit at the Tax Office will calculate the tax for each tax-paying household. The tax revenue recorded for each tax-paying household is determined as follows:

- Based on the tax calculation results of each tax-paying household sent back by the County Tax Office, the commune tax team assists the Commune People's Committee in compiling a list of each tax-paying household according to the attached model in this Circular, posting the tax calculation basis and recorded tax amount for each household for confirmation by the tax-paying household and public opinion within 20 days before establishing and approving the tax record.

- Organizations and individuals using land in multiple communes, wards, towns, districts, counties, cities under provinces must submit their declarations to the tax authority responsible for establishing the tax record according to Clause 2, Article 9 of Decree No. 74/CP dated October 25, 1993 of the Government. The tax authority will accept the declaration, check, determine the tax calculation basis, and notify the tax-paying household.

- In cases where the tax-paying household does not declare, the tax authority has the right to determine the tax payable according to Article 9 of Decree No. 74/CP dated October 25, 1993 of the Government and Article 13 of the Law on Agricultural Land Use Tax.

2. Establishment of Tax Records:

The principle is that land registered in the cadastral records of a locality should have its tax record established in that same locality according to Article 9 of Decree No. 74/CP dated October 25, 1993 of the Government.

According to Article 10 of Decree No. 74/CP dated October 25, 1993, the establishment of tax records proceeds as follows:

- The commune tax team compiles the results of collecting public opinions and each tax-paying household immediately after the posting period ends and reports to the Commune People's Committee. If there are significant opposing views regarding the taxable area or land category, a recheck and determination must be conducted, followed by the establishment of tax records village by village (hamlet, village) according to the Ministry of Finance's model...

- The commune tax advisory board assists the Commune People's Committee in collaboration with the commune tax team to check and determine the tax calculation basis for each tax-paying household, ensuring consistency with the household's declaration and the land classification result. In cases where the tax-paying household has not reached an agreement with the commune tax advisory board and tax team on the tax calculation basis after posting, and the commune tax advisory board and tax team cannot resolve the issue, they must report to the Commune People's Committee to provide written comments to the tax-paying household, based on which the tax record is continued and completed.

3. Organization of Reviewing Tax Records.

After completing the tax record, the Chairman of the Commune People's Committee signs and submits it to the District People's Committee, simultaneously sending it to the Tax Office. The Tax Office, along with the tax advisory board, assists the District People's Committee in organizing the review: taxable area and land category for each commune.

Based on the tax records established by the communes and the advisory board's opinions, the Tax Office completes the consolidation of the review results and reports them to the District People's Committee for approval and submission to the Provincial People's Committee (referred to collectively as the province) and the Provincial Tax Department.

The Provincial Tax Department assists the Provincial People's Committee in checking and reviewing the tax records of the districts, involving relevant sectors (advisory boards). In cases of differing opinions, the Provincial People's Committee issues a directive requiring the district to re-review the tax records.

The district tax records approved by the Provincial People's Committee according to the recommendation of the Provincial Tax Department serve as the basis for the District People's Committee to officially approve the tax records for the communes and the tax-paying households managed by the district.

The General Department of Taxation is responsible for regularly or periodically inspecting the agricultural land use tax records of localities.

4. Adjustment of Tax Records.

- After the tax record is reviewed, in subsequent years, if there are changes in the tax-paying household or the tax calculation basis, the tax-paying household must submit a declaration to the locality's People's Committee responsible for establishing the tax record no later than January 31 each year.

- Based on the tax-paying household's declaration and verification results, the tax authority will make adjustments in March each year.

- The following situations allow for immediate adjustment of the tax record during the tax year: when a household using land (tax-paying household) moves elsewhere and their land is left unutilized, land buried or eroded due to natural disasters and enemy activities making production impossible, and similar cases.

IV. ORGANIZATION OF TAX COLLECTION AND PAYMENT

1. Basis for Tax Collection: based on the crop season and harvest capacity, actual prices, and food requirements (if applicable). The Provincial Tax Department proactively presents proposals to the Provincial People's Committee for decisions on matters stipulated in Articles 11 and 12 of Decree No. 74/CP dated October 25, 1993 of the Government, specifically adding the following points:

- Planning tax collection for the crop season and the entire year, clearly specifying the tax amount to be collected in cash and in rice (in special cases);

- Tax price for each crop season within the year;

- Specifying the tax collection period: start date and end date of the tax collection period;

- Measures for directing and organizing tax collection;

- Launch a competition movement and propaganda to fulfill the tax collection tasks.

2. Based on the approved tax book and the ability to collect taxes for each case, the village tax team assists the People's Committee of the commune to send a notice of the amount of tax to be paid to each taxpayer household, the notice must clearly state:

+ The time limit for tax payment;

+ The tax book to be submitted during the current period: annual crop tax, perennial crop tax, monetary tax, rice tax (if applicable), and divided into: tax due within the year and outstanding tax (if applicable);

+ The location for tax payment;

+ The number of this notification.

The notification shall be sent to the taxpayer household with one copy and another copy retained at the tax authority, simultaneously, the deadline for tax payment must be announced through the commune's communication means.

During the tax payment period, the village tax team has the responsibility to urge taxpayers to pay taxes according to the provisions set out in the tax payment notification.

3. Collection and payment of taxes.

a. Collection and payment of taxes in cash: when collecting taxes from the public, tax officers or treasury staff must check and compare the tax amount recorded on the notification with the amount brought by the taxpayer, while issuing and providing a receipt to the taxpayer and recording it in the tax collection tracking book.

In cases where the taxpayer does not directly deposit the tax into the treasury, at the end of each day, the tax collector must reconcile the tax receipts with the collected tax amount every ten days and deposit all collected taxes into the State Treasury. If the collected tax amount reaches five million dong or more, it must be immediately deposited into the State Treasury. Any tax exceeding this threshold that has not been deposited into the State Treasury will be considered as misappropriation of tax funds.

b. Collection and payment of taxes by bank transfer: tax payment by bank transfer is handled by the taxpayer following the procedures for tax payment. The tax authority must maintain a record of taxpayers who pay by bank transfer to periodically reconcile with the treasury and urge taxpayers to pay.

c. Collection of taxes in rice (if applicable): the organization collecting rice must directly receive rice from the taxpayer with the presence of a tax authority representative to issue a tax receipt for the taxpayer. The organization purchasing tax rice must settle with the state budget immediately during the tax collection period as stipulated by the Chairman of the Provincial People's Committee.

4. At the end of the tax year, tax authorities at all levels must organize the settlement of tax collection results with each taxpayer household and prepare a tax collection settlement report to the same-level People's Committee and the higher-level tax authority according to Article 18 of the Law on Land Tax for Agricultural Use as follows:

a. At the commune level: Prepare the settlement of tax collection results for the year based on each taxpayer household, based on the following documents: Tax amount recorded in the approved tax; tax reduction or exemption (if applicable);

Tax paid in the year; summarized from the tax collection tracking book and reconciled with the tax receipt; thereby determining the tax paid in full, surplus or shortfall for each taxpayer household and summarizing the settlement of tax collection results for the commune.

b. At the district level: The District Tax Office reviews and approves the tax collection settlement results of communes in the district and summarizes the overall tax collection settlement results for the district, reporting to the District People's Committee for approval by the Provincial People's Committee and the Provincial Tax Service for review and approval.

c. At the provincial level: The Provincial Tax Service organizes the review and approval of tax collection settlement results of districts; summarizes the provincial settlement including the main indicators: tax recorded in the tax book; tax surplus or shortfall carried over from the previous year (if applicable); tax reduction or exemption (if applicable);

Tax collected; tax paid into the State Treasury; determine the tax surplus or shortfall.

After being approved by the Provincial People's Committee, the provincial settlement report is sent to the Ministry of Finance (General Department of Taxation).

The General Department of Taxation regularly or periodically checks the tax collection settlement results of localities.

5. According to Article 11 of Decree No. 74/CP dated October 25, 1993 of the Government, provisional tax collection for the year 1994 shall only be implemented in areas where the first tax collection period of the 1994 tax year has not yet completed the land use tax book for agricultural land. Provisional tax collection must be based on the 1993 agricultural tax book; simultaneously adjusting the tax amount in accordance with changes in taxable land area. By the final period of the tax year, tax collection must be conducted according to the new land use tax book for agricultural land, and at the end of the year, the settlement must be made according to the 1994 land use tax book for agricultural land; if there is an excess, it will be transferred to the next year, if there is a shortage, it will be recovered in the next year.

V. TAX REDUCTION AND EXEMPTION

According to Chapter V of the Law on Land Tax for Agricultural Use and Chapter V of Decree No. 74/CP dated October 25, 1993 of the Government, the Ministry of Finance provides additional guidance as follows: 1. The exemption of land tax for agricultural use for land converted from perennial crops to new planting, and land converted from annual crops to perennial crops and fruit trees, as stipulated in Clause 2, Article 14 of Decree No. 74/CP dated October 25, 1993, does not apply to cases of planting by grafting, budding, and similar methods.

2. Reduction of tax in cases of natural disasters and calamities causing crop damage.

a. When natural disasters, calamities, pests cause crop damage, the General Tax Service must proactively coordinate with the General Statistics Office to advise the same-level People's Committee to direct the tax sector, relevant sectors, and affected districts to organize investigations and verifications of the scope and extent of damage in each field in the affected area, establish a confirmation record as the basis for determining crop damage when harvesting. The District Tax Office and the village tax team must promptly monitor and report to the same-level People's Committee and higher-level tax authority on the situation of damage.

b. Upon harvest, the General Tax Service directs the District Tax Offices to cooperate with relevant sectors to guide and inspect communes, determine the actual yield of the damaged area, establish a field inspection record, which must clearly specify.

- The area of damage and the number of households with fields located within this area;

- The actual average yield of the damaged area.

c. Determine the loss ratio according to the formula:

Loss ratio of the assessed period

The conditions for implementing tax reduction or exemption due to natural disasters causing crop damage are that the annual tax book must be established from the beginning of the tax year in accordance with Article 9 of Decree No. 74/CP dated October 25, 1993 of the Government. In individual cases where the annual tax book is not established from the beginning of the year, the entire year's tax reduction or exemption will be implemented at once. Determine the loss ratio using the following formula.

Base the amount of tax reduction or exemption on the determined loss ratio according to Article 17 of Decree No. 74/CP dated October 25, 1993 of the Government.

3. The Village Tax Advisory Council must review each subject under the policy: the Council shall consider tax reduction or exemption as stipulated in Article 16 of Decree No. 74/CP dated October 25, 1993 of the Government.

4. The procedure for reviewing and consolidating applications for tax reduction or exemption at various levels is as follows:

a. At the commune level: Based on actual losses, records confirming assessments during natural disasters, enemy threats, pests... and field inspection reports; based on the actual living conditions of policy beneficiaries eligible for tax reduction or exemption; the tax authority and the Tax Advisory Council assist the People's Committee in proposing tax reductions or exemptions for the commune, compiling lists of households regarding the affected areas, degree (loss productivity, requested tax reduction or exemption due to natural disasters, households requesting tax reduction or exemption belonging to social policy beneficiaries according to the attached model of this Circular, to be posted for 20 days. The tax authority collects public opinions, completes, compiles, and reports to the Commune People's Committee for approval of the list and proposed tax reduction or exemption, reporting to the District People's Committee and the District Tax Office.

b. At the district level: Based on:

- Records determining the scope and extent of losses caused by natural disasters;

- Statistical reports on the actual yields of various crops, field inspection results, and actual harvest yields of the affected areas;

- Commune review records;

- Applications for tax reduction or exemption submitted by taxpayers managed by the district;

- Considering the living conditions of households belonging to policy beneficiaries...

The District Tax Office proposes tax reduction or exemption recommendations for communes and taxpayers to the Tax Advisory Council for review, involving relevant departments, and on this basis, compiles and reports to the District People's Committee for submission to the Provincial People's Committee and the Provincial Tax Department. The application files for tax reduction or exemption at the district level include:

- Application documents from the Commune People's Committees and business units under the district;

- The District People's Committee's report;

- Records of the district's review of tax reduction or exemption proposals;

- Detailed reports from the tax authority.

c. The Provincial Tax Department reviews and approves tax reduction or exemption for districts, involving the Tax Advisory Council (relevant departments), and on this basis, proposes to the Provincial People's Committee for decision. During the review, the Provincial Tax Department must:

- Compare the records of disaster-affected areas with the actual affected areas, the extent of losses, and the records of actual harvest yields, comparing between districts within the province, comparing with previous years, etc.;

- Accurately determine the production yield of the year according to Article 17 of Decree No. 74/CP dated October 25, 1993 of the Government;

- When considering tax reduction or exemption for social policy beneficiaries, confirmation from the Veterans Affairs sector is required; at the same time, attention should be paid to the actual living conditions in the locality and between districts within the province.

5. Procedure for implementing decisions on tax reduction or exemption.

- The District People's Committee must notify in writing each taxpayer about the tax reduction or exemption amount according to the decision of the Provincial People's Committee. If there are too many households receiving tax reduction or exemption, the notification can be delegated in writing to the Commune People's Committee.

- Cases where notifications do not comply with the decision-making authority are considered violations of the law, and the Provincial Tax Department has the right to revoke the tax reduction or exemption decision or recover the unrecovered tax reduction or exemption amount and pay it into the state budget.

6. The General Department of Taxation is responsible for inspecting the implementation of tax reduction or exemption in localities, submitting to the Ministry of Finance for revocation of incorrect tax reduction or exemption decisions, and reporting to the Prime Minister according to Article 18 of Decree No. 74/CP dated October 25, 1993 of the Government.

VI. VIOLATION HANDLING

According to Articles 26, 27, 28, and 29 of the Law on Land Tax for Agricultural Land and Articles 19 and 20 of Decree No. 74/CP of the Government dated October 25, 1993, the Ministry of Finance guides the procedures for handling violations as follows:

1. Based on the nature and severity of the violation by the subjects, tax officers prepare a violation record signed by the violator and the local Commune People's Committee.

2. Based on the violation record, the following cases are studied and handled:

a. For organizations and individuals (taxpayers), apply the following penalty forms from low to high:

- Warning;

- Fine;

6. Steel

b. For tax officers or those who abuse their positions, apply the following penalties:

- Disciplinary action;

- Administrative fines;

- Criminal prosecution if the violation causes serious consequences.

In cases of administrative disciplinary action: The tax authority must propose the form of disciplinary action to the competent authority; if it involves a tax officer, they must be dealt with according to ten disciplinary actions ranging from criticism to dismissal.

c. In cases of criminal prosecution under the Penal Code, the tax authority must compile a file to transfer to the investigation agency for consideration and handling.

VII. SETTLEMENT OF COMPLAINTS

Upon receipt of a complaint, the settlement procedure is as follows:

1. Classify complaints from organizations and individuals regarding taxes according to the nature of the matter.

- Complaints about the determination of tax bases such as taxable area, recorded tax, tax payable...;

- Complaints about policies that organizations or individuals paying taxes are entitled to enjoy;

- Complaints about the decision to handle tax violations by the tax authority and the People's Committee.

2. Handling complaint letters:

- Organize inspections on the implementation of tax policies by the People's Committee and the tax authority as mentioned in the complaint letter;

- Directly meet with the complainant (if conditions permit) or related organizations and individuals to investigate and verify on-site, record each case in a report.

- Based on the results of the investigation and verification, draw conclusions regarding the complaints of citizens (organizations, individuals) to:

- Resolve promptly if the content of the complainant's complaint is correct.

+ Respond and explain to the complainant if their complaint is incorrect or due to insufficient understanding of the policy.

While considering and resolving complaints, it is necessary to guide organizations and individuals to pay the full amount of tax or penalty as stipulated within the prescribed time limit.

VIII. IMPLEMENTATION

1. Tax authorities at all levels have the responsibility to assist local governments at all levels in directing relevant sectors and lower-level People's Committees to implement the enforcement of the Law on Land Tax for Agricultural Use in their respective areas.

2. According to Article 29 of Decree No. 74/CP dated October 25, 1993 of the Government: Annually, the General Department of Taxation is entitled to allocate 4.5% of the total land tax revenue from agricultural land to ensure funding for village tax teams to collect taxes in villages and the activities of tax advisory councils at various levels. This budget is funded by the central government, allocated monthly and quarterly to the General Department of Taxation by the Ministry of Finance like other budgets, and settled annually based on actual tax collections.

3. This Circular takes effect from January 1, 1994. Previous regulations on agricultural tax issued by the Ministry of Finance shall remain valid until December 31, 1993. Specifically, the declaration of taxable area, classification of land for taxation, and establishment of tax books for 1994 shall be implemented from October 25, 1993.

4. Ministries, sectors, provincial and municipal people's committees directly under the central government, while implementing the Law on Land Tax for Agricultural Use, the Government's Decrees, and this guiding Circular, should promptly reflect any unclear issues to the Ministry of Finance.

Hamlet (village, commune, ward)

Social

District

Province

LIST OF PROPOSALS FOR REDUCED OR EXEMPTED TAXES ON AGRICULTURAL LAND USE
DISASTER RELIEF TAX REDUCTION