Circular No. 93/2011/TT-BTC amends and supplements Circular No. 117/2004/TT-BTC dated December 7, 2004, issued by the Ministry of Finance guiding the implementation of Decree No. 198/2004/NĐ-CP dated December 3, 2004, of the Government on land use fee collection.

CIRCULAR

Amending and supplementing Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance guiding the implementation

of Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on land use fee collection

Based on the Land Law dated November 26, 2003;

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

Pursuant to Decree No. 198/2004/ND-CP dated December 3, 2004 of the Government on land use fee collection;

Pursuant to Decree No. 120/2010/NĐ-CP dated December 30, 2010 of the Government amending and supplementing certain provisions of Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on land use fee collection;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Finance guides the amendment and supplementation of Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance guiding the implementation of Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on land use fee collection (amended and supplemented by Decree No. 120/2010/NĐ-CP dated December 30, 2010 of the Government) as follows:

Article 1. Amending and supplementing Section IV Part A (guiding Clause 1 of Article 2 of Decree No. 120/2010/NĐ-CP) as follows:

"1. Land price for land use fee collection:

1.1. In cases where economic organizations, households, or individuals are granted land with payment of land use fee by the State without going through public auction of land use rights, the land price for land use fee collection shall be the land price according to the purpose of land grant at the time of the decision on land grant issued by the competent state authority; in cases where the actual land handover date does not match the date recorded in the land grant decision, the land price for land use fee collection shall be the land price according to the purpose of land grant at the actual land handover date.

The actual land handover date shall be determined as follows:

a) In cases where land is granted after clearance of land surface, the actual land handover date shall be the date of the land grant decision issued by the competent state authority.

b) In cases where land is granted before clearance of land surface, the actual land handover date shall be the date of land handover after clearance of land surface according to the progress of land grant recorded in the approved investment project; in cases where the completion date of land clearance does not match the progress of land grant recorded in the approved investment project, the actual land handover date shall be the date of actual land handover after land clearance on site.

For projects with land clearance period of two years or more and the approved project does not specify the progress of land grant, the actual land handover shall be carried out annually in accordance with the actual completion of land clearance on site.

1.2. In cases where economic organizations are permitted by the competent state authority to change the purpose of land use to implement production and business projects or housing projects, the land price for land use fee collection shall be the land price according to the purpose of land use after the change of land use purpose at the time of the decision permitting the change of land use purpose issued by the competent authority.

1.3. In cases where households or individuals are granted certificates (recognized) of land use rights for land currently in use or are permitted to change the purpose of land use, the land price for land use fee collection shall be the land price according to the purpose of land use when the certificate of land use rights is granted or according to the purpose of land use after the change of land use purpose at the time of submitting complete and valid application documents for granting certificates of land use rights or changing the purpose of land use in accordance with regulations of the natural resources and environment authority.

1.4. The land price for land use fee collection under Clause 1 of Article 2 of Decree No. 120/2010/NĐ-CP shall be the land price prescribed by the People's Committee of the province. In cases where the land price prescribed by the People's Committee of the province is not close to the actual market price of land transfer under normal conditions, the People's Committee of the province shall determine the specific land price based on the actual market price of land transfer to ensure suitability. Specifically, in cases of granting certificates (recognizing) of residential land use rights for the area of land currently in use within the limit of residential land use (land allocation); land changed in purpose within the limit of residential land use (land allocation) of households and individuals, the land price for land use fee collection shall be the residential land price prescribed by the People's Committee of the province at the time of declaration and submission of complete and valid application documents for granting certificates of land use rights or changing the purpose of land use at the natural resources and environment authority.

The land price prescribed or decided by the People's Committee of the province shall be guided as follows:

a) The land price prescribed by the People's Committee of the province is the land price in the Land Price Table issued and announced by the People's Committee of the province on January 1st each year.

b) The land price decided by the People's Committee of the province is the specific land price of each plot of land according to the approved planning to calculate land use fee collection in cases where the land price in the Land Price Table issued by the People's Committee of the province is not close to the actual market price of land transfer under normal conditions and needs to be reassessed appropriately.

The method of determining the land price for land use fee collection shall be implemented in accordance with the regulations of the Government.

1.5. The determination of land price in accordance with the actual market price of land transfer as stipulated in Point 1.4 of this clause shall be carried out as follows:

1.5.1. For economic organizations:

a) Based on the prescribed documents, the Department of Finance shall coordinate with relevant departments to determine the land price for land use fee collection and submit it to the People's Committee of the province for decision in one of the following two forms:

- In cases where the land price prescribed by the People's Committee of the province is close to the actual market price of land transfer under normal conditions, the Department of Finance shall submit to the People's Committee of the province for decision to apply the land price prescribed by the People's Committee of the province for land use fee collection.

- In cases where the land price prescribed by the People's Committee of the province is not close to the actual market price of land transfer under normal conditions, the Department of Finance shall take the lead in coordinating with the Department of Natural Resources and Environment, the Tax Service, and related agencies to reassess the specific land price and submit it to the People's Committee of the province for decision.

Based on the actual situation at the locality, the Department of Finance hires an organization with appraisal functions to determine the land price; based on the land price determined by the Appraisal Organization, the Department of Finance takes the lead in coordinating with the Department of Natural Resources and Environment, the Tax Service, and relevant agencies to review and submit to the Provincial People's Committee for decision on the land price for each specific case.

In cases where the locality does not have conditions to hire an appraisal organization or the value of the land plot is small (according to the Land Price Table issued by the Provincial People's Committee): less than 15 billion VND for centrally-administered cities; less than 5 billion VND for mountainous and highland provinces; less than 10 billion VND for other provinces, then the Department of Finance reports to the Provincial People's Committee for permission to coordinate with the Department of Natural Resources and Environment, the Tax Service, and relevant agencies to determine and submit to the Provincial People's Committee for decision.

The selection of the appraisal organization shall be carried out in accordance with the laws on appraisal.

Costs related to determining the land price for calculating land use fees shall be covered from the state budget in accordance with the laws on the state budget.

b) Based on the land price decided by the Provincial People's Committee and the cadastral information of the Department of Natural Resources and Environment and the Tax Service, the amount of land use fee payable to the entity allocated land or transferred land use purpose must be determined and notified to the entity to pay the land use fee according to regulations.

c) Within no more than ten working days from the date of actual land handover or decision to change land use purpose, the economic organization must go to the competent state agency as prescribed by the Provincial People's Committee regarding the Procedures for Coordination among Local Functional Agencies in the Process of Document Circulation, Determination, Collection of Financial Obligations relating to Land (as stipulated in point 1.3 clause 1 Article 9 of this Circular) to declare the land use fee obligation. If the organization fails to declare within this period, the tax authority will impose a late declaration penalty in accordance with the laws on tax management.

1.5.2. For households and individuals:

a) In cases of issuing certificates of land use rights (recognizing land use rights) for land currently in use, or changing the purpose of land use from non-residential to residential, based on the declaration form for payment of land use fee and the cadastral information transfer form for determination of land use fee of households and individuals, the Tax Revenue Office shall determine the land use fee payable as follows:

- For the area within the land use limit (allocated limit), the Tax Revenue Office shall base on the land price stipulated by the Provincial People's Committee at the time of submitting complete and valid documents to determine.

- For the area exceeding the land use limit (allocated limit), the Tax Revenue Office shall base on the land price stipulated by the Provincial People's Committee and the adjustment factor for land price to determine. In cases of changing land use purpose, the difference between the land use fee according to the new purpose and the land use fee according to the previous purpose before the change shall also be determined according to the corresponding adjustment factor for each type of land.

The adjustment factor for land price shall be determined by the Department of Finance taking the lead, coordinating with the Department of Natural Resources and Environment, the Tax Service, and relevant agencies to report to the Provincial People's Committee for decision when collecting land use fee from households and individuals for areas exceeding the limit in the same area where it is necessary to determine the market land price to calculate the land use fee. This factor is determined by the ratio between the actual transaction price (with general applicability) of the land in the market under normal conditions at the time of determination and the land price stipulated by the Provincial People's Committee.

- The determination of the area within the limit for calculating the land use fee as prescribed in this point shall only apply to one plot of land; if households and individuals have multiple plots of land, the land user may choose one plot of land to determine the area within the limit. The Tax Service shall report to the Provincial People's Committee to issue Regulations guiding households and individuals to self-declare and bear responsibility under the law for the declaration of land use fee for each occurrence when submitting application documents for issuance of certificates of land use rights.

b) In cases of allocating new residential land or issuing certificates of land use rights for non-agricultural production and business purposes, or requesting to change the purpose of land use from agricultural to non-agricultural production and business purposes, based on the declaration form for payment of land use fee and the cadastral information for determination of land use fee of households and individuals, the Department of Finance shall implement the determination of the land price for calculating the land use fee applicable to economic organizations as prescribed in point 1.5 (1.5.1) of this clause.

c) Based on the determined land use fee amount at sub-point a and the land price for calculating the land use fee decided by the competent authority at sub-point b of point 1.5 (1.5.2) of this clause, the Tax Revenue Office shall notify or determine and notify the land use fee payable by households and individuals according to regulations.

2. Allocation of land use fees for construction projects with multiple floors attached to land allocated by the State for multiple users shall be implemented as follows:

2.1. For construction projects such as high-rise buildings, apartment buildings, mixed-use buildings (except for cases prescribed in point 2.2 of this clause), the land use fee shall be allocated to each user based on the allocation coefficient (x) multiplied by the building area of each user as follows:

a) The allocation coefficient is determined by the ratio between the land area for building and the total building area of all users.

b) In cases where there is a basement floor, 50% of the basement floor area shall be added to the total building area of all users to calculate the allocation coefficient.

2.2. In cases of selling state-owned houses according to Decree No. 61/CP dated July 5, 1994 of the Government, the allocation of land use fees shall be carried out in accordance with the provisions of this Decree.”

Article 2. Supplement Section V to Part A (guidance for Clause 2, Article 2 of Decree No. 120/2010/NĐ-CP) as follows:

"V. Deduction of compensation and land clearance funds.

1. In cases where there is a compensation and land clearance plan approved by the competent authority:

Where organizations or individuals who have been granted land by the State with payment for land use rights advance funds for compensation, support, resettlement, and implementation costs according to the approved plan shall be reimbursed by the State budget through deduction of the entire advanced amount from the land use fee payable.

Where the advanced amount for compensation, support, resettlement, and implementation costs according to the approved plan exceeds the land use fee payable, only the land use fee payable will be deducted; the remaining amount will be included in the project's investment costs. The amount deducted from the land use fee payable shall not be accounted for as part of the project's investment costs.

Where organizations or individuals who have been granted land have other agreements with localities (such as leaving part of the land area with infrastructure for local social policies or local needs), the costs arising from such agreements shall not be deducted from the land use fee payable.

(Example 1 attached in the Appendix to this Circular)

2. In cases where there is no compensation and land clearance plan approved by the competent authority:

Where investors self-transfer lawful land use rights from organizations or individuals or self-negotiate compensation and land clearance, when permitted by the competent authority to change the land use purpose to implement an investment project according to the approved planning, they shall not deduct but pay the land use fee based on the price difference between the new land use purpose and the previous land use purpose at the time of changing the land use purpose.

The land price for the new purpose and the land price for the previous purpose before changing the land use purpose to calculate the differential land use fee mentioned above is determined by the People's Committee of the province; if the land price determined by the People's Committee of the province (for the old purpose) is lower than the compensation and support price for land when the State recovers land at the same time, it shall be calculated according to the compensation and support price for land."

Article 3. Amend and supplement Point 3, Section III, Part B (guidance for Clause 3, Article 2 of Decree No. 120/2010/NĐ-CP) as follows:

"3. In cases where land users convert from leasing land to being granted land with payment for land use rights and have previously prepaid rent, they may deduct the prepaid rent for the remaining period (if any) from the land use fee payable according to the principle of preserving the amount paid as follows:

The undeducted amount (mentioned above) shall be converted into a corresponding percentage of the completion of land use fee payment at the time the land user paid rent to the State, but not exceeding the land use fee payable. The land price for calculating the land use fee at the time the land user paid rent to the State to determine the percentage of completed land use fee payment must be consistent with the new land use purpose according to the approved planning when converting from leasing land to being granted land with payment for land use rights.

For the percentage of land area converted from leasing land to being granted land with payment for land use rights (remaining) that must pay the land use fee according to the policy and land price at the time of conversion from leasing land to being granted land with payment for land use rights as guided in Clause 1, Article 1 of this Circular.

(Example 2 attached in the Appendix to this Circular)

Article 4. Add the following content to the end of Section IV Part B (guidance for Clause 4 Article 2 Decree No. 120/2010/NĐ-CP):

"The determination of the price of residential land shall be decided by the People's Committee of the province in accordance with the actual market transfer price of land use rights at the time of issuing the certificate of land use rights for the excess area beyond the residential land allocation limit, to calculate the land use fee under Clause 4, Clause 5 Article 8 of Decree No. 198/2004/NĐ-CP (supplemented according to the provisions of Clause 4 Article 2 Decree No. 120/2010/NĐ-CP) shall be implemented in accordance with Point 1.5 Clause 1 Article 1 of this Circular."

Article 5. Amend and supplement Point 4 of Section I Part C (guidance for Clause 5 Article 11 of Decree No. 198/2004/NĐ-CP amended according to the provisions of Clause 5 Article 2 Decree No. 120/2010/NĐ-CP) as follows:

"4. The person using the land who has been exempted or reduced from the land use fee according to the provisions of Clause 1, Clause 2, Clause 3, Clause 4 Article 12; Clause 1, Clause 3 Article 13 of Decree No. 198/2004/NĐ-CP (amended and supplemented correspondingly in Clause 2, Clause 3 Article 1 of Decree No. 44/2008/NĐ-CP) but later was permitted by the competent authority to transfer the project shall fulfill their financial obligations as follows:

4.1. For the transferrer:

The transferrer shall not include the amount of land use fee that has been exempted or reduced into the transfer price.

4.2. For the transferee:

a) In case the transferee continues to implement the project, they will continue to be exempted or reduced from the land use fee according to the laws on investment for the remaining period of the project.

b) In case the transferee does not continue to implement the project, they must pay the land use fee according to the laws on land for the project after the transfer.

c) In case the transferrer has fulfilled part of the financial obligation regarding land, the transferee shall inherit the portion of the financial obligation that the transferrer has paid."

Article 6. Supplement Point 5 into Section II Part C (guidance for Clause 6 Article 2 Decree No. 120/2010/NĐ-CP) as follows:

"5. Exempt the land use fee for the area of land allocated for use as the reservoir of a hydropower plant. The area of the hydropower plant reservoir in this case is the dedicated water surface area as stipulated in Point i Clause 2 Article 13 of the Land Law 2003, determined by the environmental resources agency."

Article 7. Supplement Section IIa before Section II Part D (guidance for Clause 8 Article 2 Decree No. 120/2010/NĐ-CP) as follows:

"IIa. Procedures for recording debt and settling land use fee debts.

1. The procedure for recording land use fee debts for cases specified in Clause 4 Article 15 of Decree No. 198/2004/NĐ-CP (supplemented in Clause 8 Article 2 of Decree No. 120/2010/NĐ-CP) shall be carried out as follows:

1.1. Households and individuals belonging to the category eligible to record land use fee debts according to Clause 8 Article 2 of Decree No. 120/2010/NĐ-CP submit a request for recording land use fee debts along with relevant documents to the Land Registration Office (or the Natural Resources and Environment Department) under the People's Committee of the district where the land is located.

1.2. The Land Registration Office (or the Natural Resources and Environment Department) reviews and submits to the People's Committee of the district for issuance of the certificate of land use rights, which includes recording the financial obligation (including the land use fee); subsequently, they prepare and transfer the Land Information Form along with a copy of the file to the Tax Authority at the same level to determine the amount of land use fee payable by households and individuals according to Subpoint a Point 1.5 (1.5.2) Clause 1 Article 1 of this Circular and establish a record of land use fee debt settlement. The record of debt is detailed according to the residential land area within and outside the allocation limit.

2. The procedure for settling land use fee debts shall be carried out as follows:

2.1. When settling land use fee debts, the land user goes to the tax authority to declare payment of the debt, the tax authority bases on the record of debt to process the settlement of the debt for households and individuals.

If after five years, households and individuals settle the debt or within five years have not fully settled the debt, the outstanding land use fee for each type of area within and outside the allocation limit shall be converted into a percentage of the unfulfilled financial obligation (= outstanding land use fee / total land use fee calculated based on the land price at the time of issuing the certificate of land use rights) multiplied by the reassessed land use fee based on the land price at the time of repayment.

The land price for calculating the land use fee at the time of repayment is the land price prescribed by the People's Committee of the province (for the area within the residential land allocation limit), and the land price decided by the People's Committee of the province (for the excess area).

2.2. After the land user completes the settlement of the debt, the tax authority issues a notification or confirmation for the land user to go to the Land Registration Office (or the Natural Resources and Environment Department) to process the cancellation of the land use fee debt on the certificate of land use rights.

3. Households and individuals who record land use fee debts when transferring shall pay the outstanding land use fee in full. In case permission is granted to transfer a portion of the plot, the natural resources and environment agency shall process the division of the plot so that the tax authority can determine the corresponding land use fee for the transferred portion. In case the heir receives the right to use the land through inheritance and the deceased has not yet repaid the land use fee, the heir shall be responsible for continuing to repay the debt according to the laws on inheritance."

(Example 3 attached to this Circular)

Article 8. Handling of existing issues regarding payment for land use rights

1. In cases where households or individuals have declared and submitted complete valid documents to the competent state agency before March 1, 2011, requesting issuance of certificates of land use rights for currently used land or requesting change of land use purpose from non-residential to residential land, the payment for land use shall be made according to the provisions of the law prior to the effective date of Decree No. 120/2010/NĐ-CP.

2. In cases where households or individuals are allowed to defer payment for land use rights according to Clause 4, Article 5 of Government Decree No. 17/2006/NĐ-CP dated January 27, 2006, when settling the debt, households or individuals will settle the debt based on the amount recorded on the certificate.

3. In cases where households or individuals are allowed to defer payment for land use rights according to Clause 1, Article 5 of Government Decree No. 84/2007/NĐ-CP dated May 25, 2007, they now apply the settlement of debt according to Clause 8, Article 2 of Government Decree No. 120/2010/NĐ-CP; specifically:

3.1. Within five years from March 1, 2011 (the effective date of Decree No. 120/2010/NĐ-CP), households or individuals must declare and settle the debt at the Tax Authority, and they will be repaid according to the land price at the time of issuing the certificate of land use rights. The determination of the land use fee payable for the area within the quota and the area outside the quota shall be carried out according to the provisions of item a point 1.5 (1.5.2) Clause 1 Article 1 of this Circular.

3.2. In cases where households or individuals settle the debt after five years or within five years but have not fully settled the debt, the debt settlement shall be carried out according to the provisions of point 2.1 Clause 2 Article 7 of this Circular.

Article 9. Implementation Organization

1. Provincial People's Committees shall be responsible for:

1.1. Directing financial agencies, tax agencies, state treasuries to coordinate with relevant agencies to implement the determination and collection of land use fees as guided in this Circular;

1.2. Inspecting and handling according to their authority any violations or complaints and denunciations related to the determination and collection of land use fees;

1.3. Specifying the procedures for coordination among local functional agencies in the transfer of files, determination, and collection of land-related financial obligations as stipulated in Clause 1 Article 1 of this Circular and the procedures for recording debts and settling debts as stipulated in Article 7 of this Circular, in accordance with the actual situation of the locality; specifying clearly the deadlines, responsibilities of each agency, unit, and land users in declaring, determining, and fulfilling financial obligations.

2. This Circular takes effect from August 15, 2011.

Cases arising from March 1, 2011 shall be implemented according to the provisions of Decree No. 120/2010/NĐ-CP dated December 30, 2010 and the guidance provided in this Circular.

Repeal Circular No. 70/2006/TT-BTC dated August 2, 2006 of the Ministry of Finance amending and supplementing certain contents of Circular No. 117/2004/TT-BTC dated December 7, 2004 of the Ministry of Finance.

During implementation, if any difficulties arise, organizations and individuals are requested to promptly report to the Ministry of Finance for research and resolution./.