I. SCOPE OF APPLICATION

1. Land use right transfer tax payers

Organizations, family households and individuals having the right to use land, when transferring their land use right under the provisions of the land legislation, shall all have to pay the land use right transfer tax, except for cases defined at Point 3, Section I of this Circular.

In cases where current land users possess one of the papers stipulated in Clause 2, Article 3 of the Government�s Decree No.17/1999/ND-CP of March 29, 1999 on the procedures for exchange, transfer, lease, sub-lease and inheritance of the land use right as well as the mortgage and capital contribution with the land use right value (hereinafter called the Government�s Decree No.17/1999/ND-CP for short) but have not been granted new land use right certificates, when transferring their land use right with certification by the competent authorities as prescribed, they shall also have to pay the land use right transfer tax under the guidance of this Circular.

The papers stipulated in Clause 2, Article 3 of Decree No.17/1999/ND-CP are determined to include the following concrete valid papers:

a/ Decisions on land allotment or land lease issued by the competent State agencies according to the provisions of the land legislation;

b/ Papers on land allotment or land lease granted by the competent State agencies in the course of implementation of the land policies in each period of the State of the Democratic Republic of Vietnam, the provisional Revolutionary Government of the Republic of Southern Vietnam and the State of the Socialist Republic of Vietnam, provided that the land has been used constantly by the allottees;

c/ Provisional land use right certificates issued by the competent State agencies or the land users� names are recorded in the land administration books, provided that the land is not in dispute;

d/ Papers issued by the competent authorities of the old regime to the land users that have been using the land since then without any dispute;

e/ Papers on land and house inheritance, presentation or donation, which were issued before the 1993 Land Law as certified by the commune/ward/township People�s Committees and the land is not in dispute;

f/ Judgements or decisions of the people�s courts or decisions on the settlement of land disputes, issued by competent State agencies, which have taken legal effect;

g/ Papers on the hand-over of houses of gratitude;

h/ Papers on land transfer, house sale and purchase together with the land use right transfer: Where the sellers have valid papers, the purchasers have not filled in the transfer procedures at the competent State agencies, even where the transfer has been made more than once and the current owners now apply for the land use right certificates; if, after examination, the commune/ward/township People�s Committees certify that the land is not in dispute and this examination result is verified by the People�s Committees of urban/rural districts, provincial towns or cities, the current land use right transferees shall have to make declaration for payment of the land use right transfer tax and registration fee.

2. Object of the land use right transfer tax

Object liable to the land use right transfer tax is the value of the land area on the use right transfer as prescribed by law, including land with houses and constructions thereon.

The value of The land The
the land area area on land
on the use = the use right x price
right transfer transfer (VND/m2)
(VND) (m2)

Where exist houses and constructions on the land on the use right transfer, the land use right transfer tax shall be calculated only with the value of the land on the use right transfer, without the value of houses or constructions thereon.

3. Tax-free cases

Cases not subject to the land use right transfer tax are stipulated in Article 3 of the Government�s Decree No.19/2000/ND-CP of June 8, 2000 detailing the implementation of the Law on Land Use Right Transfer Tax and the Law Amending and Supplementing a Number of Articles of the Law on Land Use Right Transfer Tax (hereinafter called the Government�s Decree No.19/2000/ND-CP for short). More concretely:

3.1. The State allots or leases land to organizations, family households or individuals for use according to the provisions of the land legislation.

3.2. Organizations, family households or individuals return land to the State or the State recovers land under the provisions of the land legislation.

3.3. The State sells State-owned houses together with the land use right transfer to the house buyers.

3.4. The land use right is transferred in case of divorce recognized by law with division of the land use right upon agreement of the husband and wife as certified by the commune/ward/township People�s Committees or the land use right is divided under the Marriage and Family Law.

The land use right is transferred in cases where the land use right transferee is a heir under testament or the land use right is divided under the inheritance legislation.

3.5. The land use right is transferred in the following cases:

- Between wife and husband, which requires the copy of household registration book, clearly stating their spousal relationship or their marriage certificate with the certification by the People�s Committee of the commune, ward or township where concerned persons register their household of their existing spousal relationship as recognized by law, provided that at least one of them has his/her name in the land use right certificate.

- Between fathers or mothers, foster-fathers or foster-mothers and their offspring or adopted children; between paternal or maternal grandparents and their grandchildren (or vice versa), provided that the land use right transferors must have their names in the land use right transfer certificates and have household registration books clearly stating their relationships with the persons having the land use right, or have birth certificates to determine the relationships between grandparents and parents, between parents and children, or other legal papers proving such relationships.

+ For cases involving foster-fathers or -mothers and adopted children, they must be recognized by law under decisions on recognition of adopted children, issued by the competent State agencies prescribed in the Government�s Decree No.83/1998/ND-CP of October 10, 1998.

+ For cases involving paternal or maternal grand-parents and their grandchildren, there must be birth certificates of the grandchildren and their parents related to the paternal or maternal grandparents or household registration books that clearly state such relationships.

+ For cases of land use right transfer between siblings, there must be birth certificates proving that such persons have the same parents or the same father or mother, or a household registration book clearly stating such relationship or other papers proving that they are of the same bloodline.

3.6. Economic organizations, family households or individuals, that are leased land by the State, transfer the leased land use right. The transferor of the leased land use right must have a land-leasing contract which clearly states the land rent amount already paid and the remaining payable amount, which is calculated till the time of transfer, as well as the land-lease term; the transferee of the leased land use right shall continue complying with the land-lease regime according to the Land Law�s provisions.

3.7. Organizations, family households or individuals donate their land use right to the People�s Committees of different levels or to political organizations, socio-political organizations, social organizations, socio-professional organizations or economic organizations for the construction of cultural, educational, medical, physical training and sport establishments; or charity establishments, including houses of compassion or gratitude, orphanages, sanatoriums for elderly, homes for lonely aged or disabled people, and other humanitarian establishments for non-commercial purposes under projects already ratified or approved by the competent State bodies in conformity with the planning.

II. LAND USE RIGHT TRANSFER TAX CALCULATION BASES

Bases for calculation of the land use right transfer tax are the land area on the right transfer, land prices and land use right transfer tax rates.

1. Land area

Land area for calculation of the land use right transfer tax is the actual land area inscribed in the land use right transfer contract in conformity with the land administration book and map of the commune, ward or township. Where the land administration book or map is unavailable or the land area inscribed therein is different from that inscribed in the contract, the measurement must be organized to determine the landmarks with certification by the People�s Committee of the urban/rural district, provincial town or city (referred collectively to as district) where exists the land on the use right transfer, for land of family households and individuals; or by the provincial/municipal Land Administrations, for land use right of organizations.

Where the land administration books or excerpts of the land administration maps are available, the district People�s Committees or provincial/municipal Land Administrations may authorize their immediate subordinates to certify land areas and categories for the fulfillment of the land use right transfer procedures.

2. Land prices for calculation of the land use right transfer tax

Land prices for calculation of the land use right transfer tax are prescribed in Article 6 of the Government�s Decree No.19/2000/ND-CP of June 8, 2000. More concretely:

1. Land prices for calculation of the land use right transfer tax are the prices set by the People�s Committees of the provinces or centrally-run cities according to the Government�s price bracket for different land categories, which shall be publicly posted up at the tax agencies and land administration offices.

2. Where the land use right is transferred by mode of auction, the tax- calculation land prices shall be the auction-winning prices, which must not be lower than those set by the People�s Committees of the provinces or centrally-run cities according to the Government�s price bracket for different land categories.

Where the land use right is transferred together with the sale of assets affixed thereto in form of auction while the land prices cannot be determined separately from the auction-winning prices, the tax-calculation land prices shall be the land prices set by the People�s Committees of the provinces or centrally-run cities, according to the Government�s price bracket for different land categories.

3. Where apartments in multi-storied and multi-apartment buildings are sold together with the land use right transfer, the tax-calculation land prices shall be determined according to the coefficients prescribed for different stories by the Government�s Decree No.38/2000/ND-CP of August 23, 2000 on the collection of land use levy.

4. For the transfer of the right to use pond or garden land in rural population quarters or residential land in urban areas, the land prices for calculation of the land use right transfer tax shall be determined according to the land categories inscribed in the land use right certificates or the currently taxed land categories: if the land is being levied with the agricultural land use tax, the tax calculation prices shall be the agricultural land prices; if the land is being levied with the housing-land tax, the tax calculation prices shall be the prices of residential land or land for project construction.

- For a number of land use right transfer cases where specific land prices are unavailable in the local price bracket for different land categories, or the land lots have been under infrastructure renovation or construction planning, thus making their value higher than the pre-planning value; or where the land prices change too irrationally as compared with the prices in the price bracket, the tax agency shall coordinate with the finance agency and land administration agency in organizing the re-determination of the land prices to make them conform with the actual situation (a land price-setting council may be set up) and report such to the People�s Committee of the province or centrally-run city so that the latter may specify land prices for calculation of the land use right transfer tax.

3. Land use right transfer tax rates

The land use right transfer tax rates are determined according to the provisions in Article 7 of the Government�s Decree No.19/2000/ND-CP of June 8, 2000. More concretely:

a/ For land used for agricultural production, forestry, aquaculture or salt making, the tax rate shall be 2% (two per cent).

b/ For residential land, land for project construction and land categories other than those stipulated at Point a above, the tax rate shall be 4% (four per cent).

III. TAX DECLARATION AND PAYMENT

1. A dossier of the land use right transfer tax declaration includes:

- The land use right transfer tax declaration, which is made according to the form set by the tax agency.

- The land use right certificate or valid papers on land use right prescribed in Article 3 of the Government�s Decree No.17/1999/ND-CP and specified at Point 1, Section I of this Circular.

The above-mentioned papers must be the originals, each attached with a copy notarized by the State Notary Public for archives by the tax agency.

- The land use right transfer contract (made according to form 02 provided for in the Government�s Decree No.17/1999/ND-CP) between the land use right transferor and transferee with certification of the People�s Committee of the commune, ward or township where exists the land on the right transfer.

Where the land use right transfer had been made before the effective date of the Government�s Decree No.17/1999/ND-CP of March 29, 1999, with the land use right transfer contract being no longer available or not made, there must be papers on the sale, purchase, transfer, inheritance, donation or presentation at the time of transferring the land use right, with certification of the People�s Committee of the commune, ward or township where exists the land on the right transfer.

2. Declaration and determination of payable tax amount

The land use right transfer tax payers shall have to declare the land use right transfer tax according to the declaration form set by the tax agencies and supply other necessary documents related to the tax calculation at the requests of the tax agencies as well as papers related to the tax reduction or exemption.

Dossiers for declaration of the land use right transfer tax shall be submitted at tax divisions if the land use right certificates are granted by the People�s Committees of the rural/urban districts, provincial towns or cities (referred collectively to as districts); or at the provincial/municipal tax departments if the land use right certificates are granted by the provincial/municipal People�s Committees.

For localities with townships or towns being far away from the provincial/municipal centers, the provincial/municipal tax departments may assign their district/town divisions to fill in the procedures for land use right transfer tax collection. After the land use right transfer tax has been fully paid, the dossiers shall be handed over by the tax divisions or tax payers to the competent agencies for carrying out the procedures for issuance of land use right certificates.

The tax agencies shall guide tax payers to make right and full declaration. Upon receiving declarations for land use right transfer tax payment, the tax agencies shall have to make receipts thereof and open books for dossier monitoring. Tax agencies shall examine and verify documents serving as basis for tax calculation, determine the payable tax amounts and issue tax notices strictly according to the time-limits prescribed in Article 12 of the Government�s Decree No.19/2000/ND-CP of June 8, 2000.

Where a dossier is invalid or incomplete as prescribed, the tax agency shall have to notify it in writing to the tax payer so that the latter may supplement the dossier according to stipulations.

3. Tax payment

The land use right transfer tax payment shall comply with the provisions in Article 12 of the Government�s Decree No.19/2000/ND-CP, which are further detailed as follows:

The land use right transfer tax shall be remitted into the State treasury of the locality where exists the land on the use right transfer according to the tax agency�s notice. When handing a tax notice to the tax payer, the notice-handing person shall have to write down clearly the date when the tax payer receives such notice.

The land use right transfer tax must be paid within 30 days from the date the land use right transferor receives the tax agency�s notice. When collecting tax, the State treasury or the tax agency which directly collects the tax shall have to give tax receipt or voucher issued by the Finance Ministry to the tax payer. Where a tax payer pays tax in installments, the tax- collecting agency shall have to give receipt for each installment and certify the full tax payment when the tax is fully paid according to the tax notice, which shall serve as basis for the competent State agency to issue the land use right certificate. The land use right transfer tax remitted into the State budget shall be recorded in the corresponding right section, chapter, category, item and grade of the current State budget contents.

The competent State agencies shall grant land use right certificates to the land use right transferees only when the land use right transferors or transferees have fully paid the tax (with receipts or papers on money remittance into the State budget, issued by the Finance Ministry) or have tax reduction or exemption decisions issued by the tax agencies or when the land use right transfer tax is debited according to the provisions at Point 2g, Section VII of this Circular.

The tax departments of the provinces and centrally-run cities shall coordinate with the land administration agencies in providing detail guidance on the tax declaration procedures and dossiers as well as the dossier transfer process between the land administration agencies and the tax agencies according to the provisions on land use right transfer in the Government�s Decree No.17/1999/ND-CP, which must also conform with the local situation, ensuring the simplicity and convenience for the land use right transfer tax payers as well as the full and timely collection of the land use right transfer tax. The process of declaration for the transfer of the land use right transfer tax dossiers shall be publicized at the tax agencies and the land administration agencies so that the tax payers may know and implement it.

IV. TAX EXEMPTION AND REDUCTION

1. Subjects eligible for land use right transfer tax exemption

Subjects eligible for land use right transfer tax exemption are specified in Articles 8, 9 and 10 of the Government�s Decree No.19/2000/ND-CP of June 8, 2000, including:

1.1. Family households or individuals that transfer the land use right to move to settle down in new economic zones, mountainous regions or islands under decisions of the competent State agencies;

1.2. Persons conferred with the "heroic Vietnamese mother" title by the State, who transfer their land use right;

1.3. The transfer of the right to use land of various types in rural mountainous or island communes as prescribed by the Government;

1.4. The mutual exchange of land used for agricultural production, forestry, aquaculture or salt making in order to meet the farming conditions;

1.5. Economic organizations which are allotted land by the State, with the collection of land use levies, for investment in the construction of dwelling houses for sale or construction of infrastructure for transfer or lease of the right to use land affixed with such infrastructure, shall be exempt from the land use right transfer tax corresponding to the land area for which the land use levy has been paid under each project.

Other cases of dealing in real estates involving the land use right transfer shall not be entitled to the land use right transfer tax exemption prescribed above.

2. Subjects eligible for land use right transfer tax reduction

To reduce by 50% (fifty per cent) of land use right transfer tax for the following subjects when they transfer their land use right:

2.1. War invalids of 1/4 and 2/4 grades, and diseased armymen of 1/3 and 2/3 grades;

2.2. Members of families of the fallen combatants who are entitled to the State allowance regime;

2.3. Disabled people who lose their working capacity, minors and lonely aged people who have no one to support.

3. Dossiers of application for land use right transfer tax exemption or reduction:

3.1. When asking for the land use right transfer tax exemption or reduction, subjects entitled thereto shall, in addition to the dossiers prescribed at Point 1, Section III of this Circular, have to make applications clearly stating the reasons for or cases of land use right transfer tax exemption or reduction which they fall into.

3.2. Subjects eligible for land use right transfer tax exemption or reduction must have papers proving their respective cases. More concretely:

+ For family households and individuals moving to settle down in new economic zones, mountainous regions or islands, they must produce copies of decisions issued by the competent State agencies, which are notarized by the State Notary Public.

+ For tax exemption or reduction for family households� masters being war invalids, diseased armymen, members of families of fallen combatants or persons conferred with the "heroic Vietnamese mother" title, depending on each specific case, there must be certification attached with the notarized copy of certificate of the grades of the concerned war invalids or diseased armymen, certificate of heroic Vietnamese mothers, or certificate of families of fallen combatants or monthly allowance entitlement book for members of families of fallen combatants.

+ Cases of transfer of the right to use land of different categories in rural mountainous and island communes shall comply with the Government�s regulations on mountainous and island communes (except for land in cities, towns and townships).

+ For cases of mutual exchange of land used for agricultural production, forestry, aquaculture or salt making, there must be certifications by the commune/ward/township administration.

+ For cases involving lonely aged people having no one to support or minors, there must be written certification of the commune/ward/township People�s Committee for each specific case; for disabled persons� there must be certifications by the district/town medical agencies of the extents of their disability.

+ For cases of land use right transfer tax exemption for economic organizations allotted land by the State with the collection of land use levies for the execution of construction investment projects already ratified by the competent authorities, such exemption shall be effected for investors only when the construction of projects has been completed, such as the complete construction of houses for sale to organizations and households; the construction of infrastructure of industrial parks or residential quarters for partial or full transfer to other organizations for management and use; cases of the complete construction of only infrastructure of residential quarters which are divided into blocks or grounds for transfer shall not be entitled to the land use right transfer tax exemption or reduction prescribed herein. The units entitled to the land use right transfer tax exemption must have business registration permits compatible with their construction lines, land allotment decisions, already ratified construction investment projects and vouchers proving that they have fully paid the land use levies as prescribed.

The papers defined at Point 2 of this Section must be originals or copies notarized by the State Notary Public so that the tax agencies may clarify dossiers to be archived as prescribed.

4. Competence to consider tax exemption and reduction

- The directors of the provincial/municipal tax departments shall have to consider and decide the land use right transfer tax exemption or reduction for subjects that declare and pay the land use right transfer tax at the tax departments of the provinces and centrally-run cities and for subjects granted the land use right certificates by the provincial/municipal People�s Committees.

- The heads of the tax divisions of rural districts, urban districts and towns shall have to consider and decide the land use right transfer tax exemption or reduction for subjects that declare and pay the land use right transfer tax in rural districts, urban districts, towns and cities of the provinces and centrally-run cities.

The decisions on land use right transfer tax exemption or reduction must clearly state the land areas eligible for exemption or reduction consideration and the exempted or reduced tax amounts. Such decisions shall be sent concurrently to the tax payers and concerned agencies for use as basis for the granting of land use right certificates to the land use right transferees.

For cases ineligible for tax exemption or reduction consideration, the tax agencies shall have to reply in writing to the tax payers, land administration agencies and finance agencies of the same level.

5. Statute of limitations for tax exemption and reduction

- The time-limit for consideration of tax exemption or reduction shall not exceed 15 days after the receipt of complete dossiers. For complicated cases which require consultation or coordination with the land administration agencies and finance agencies in consideration and the dossier verification, the said time-limit may be prolonged but must not exceed 30 days after the tax agencies receive complete dossiers.

- For family households and individuals, the land use right transfer tax shall be exempted or reduced only once at places where such households or individuals register their permanent residence and where exists the land on the right transfer (provinces or centrally-run cities).

- For economic organizations allotted land by the State with the collection of land use levies for investment in the construction of houses for sale or construction of infrastructure for assignment, they shall be entitled to the land use right transfer tax exemption corresponding to the land area for which the land use levy has been paid under each project.

V. HANDLING OF VIOLATIONS AND COMMENDATION

1. Handling of violations

Violators of the Law on Land Use Right Transfer Tax and the Law Amending and Supplementing A Number of Articles of the Law on Land Use Right Transfer Tax shall be handled according to the provisions of Article 16 of the Government�s Decree No.19/2000/ND-CP of June 8, 2000. More concretely:

a/ For act of making false declaration for tax evasion

- The heads of the tax divisions may impose a fine of up to one time the evaded tax amount. Cases of imposing fine of more than one time the evaded tax amount must be proposed by the heads of the tax divisions to the directors of provincial/municipal tax departments for decision.

- The directors of the provincial/municipal tax departments may impose fines trebling the evaded tax amounts;

b/ For act of delaying tax payment

The directors of the provincial/municipal tax departments and the heads of the tax divisions may impose fines for the delayed tax and fine payment according to the provisions of Clause 2, Article 17 of the Law on Land Use Right Transfer Tax.

c/ For tax payers that evade big amounts of tax, commit one of the three acts of violation prescribed in Article 17 of the Law on Land Use Right Transfer Tax for the fourth time onward or commit other serious violations, the tax agencies shall compile dossiers to be transferred to the functional agencies for penal liability examination.

2. Commendation

Tax agencies and officials that well fulfill their assigned tasks and persons who have merits in detecting violations of the Law on Land Use Right Transfer Tax and the Law Amending and Supplementing a Number of Articles of the Law on Land Use Right Transfer Tax shall be commended or rewarded according to the Government�s common regime.

VI. SETTLEMENT OF COMPLAINTS

1. Right to make tax complaints

Articles 22 and 23 of the Law on Land Use Right Transfer Tax stipulate: Organizations, family households and individuals have the right to complain about the wrong application of the Law on Land Use Right Transfer Tax.

The written complaints must be sent to the tax agencies that issue tax notices or handling decisions within 30 days after the receipt of such tax notices or handling decisions. Pending the settlement, the complainants shall still have to pay in full and on time the notified tax and fine amounts into the State budget.

If organizations, family households or individuals disagree with the tax agencies� decisions on the settlement of their complaints or past 30 days after sending complaints they receive no replies, they may further lodge their complaints to the immediate superior tax agencies of the complaint-receiving bodies. The decisions of the immediate superior tax agencies shall have the implementation effect. The Finance Minister�s decisions shall be the final ones.

2. Responsibilities and powers of the tax agencies

Tax agencies of different levels shall, within 15 days after receiving tax complaints from tax payers, have to consider and settle them. For complicated cases that require more time for investigation and verification, such must be notified to the complainants but the time-limit for the settlement must not exceed 30 days after the receipt of the complaints.

Tax agencies shall have to return tax and fine money that has been wrongly collected and pay damages (if any) to the victims within 15 days after receiving handling decisions.

If detecting and concluding that there�s a false tax declaration, evasion or mistake, the tax agencies shall have to collect tax arrears for 3 years dating back from the date of inspection and detection and handle the violations according to the provisions of Article 17 of the Law on Land Use Right Transfer Tax.

VII. ORGANIZATION OF IMPLEMENTATION