LAW

GOVERNING TAXES ON LAND USE RIGHT ASSIGNMENT.

With a view to strengthening the State management of the land, encouraging efficient land use, ensuring equity in tax obligations and supplementing the State budget with part of the income of the land user who assigns his/her land use rights.
Pursuant to Articles 80 and 84 of the 1992 Constitution of the Socialist Republic of Vietnam, and
Pursuant to Articles 3,73 and 79 of the Land Law; This Law provides the tax regulation on the assignment of the land-use rights;

Chapter I

GENERAL PROVISIONS

Article 1

Organizations, family households or individuals that have the right to use land, including the land on which there is a house or an architectural object, shall pay a tax on the assignment of land-use rights when they assign such rights in accordance with law, except for cases provided for in Article 2 of this Law.

Article 2

The following cases shall be exempt from the tax on the assignment of land-use rights;

1. Land assigned by the State to an organization, a family household or an individual for use in accordance with law;

2. Land returned to, or recovered by, the State from an organization, a family household or an individual in accordance with law;

3. The land-use right is assigned to an inheritor accordance with law;

4. The land-use right is assigned among members of the same family when a household is detached from the family or between spouses when they divorce;

5. An organization or an individual that is licensed to trade in immovable assets and is subject to turn-over and profit taxes;

6. An organization, a family household or an individual that leases land and is subject to turn-over and profit taxes.

Article 3

All State agencies, political and social organizations, units of the People's Armed Forces and citizens have the responsibility  to assist the tax agency and the tax collectors in implementing the Law on Tax on Land-Use Right Assignment.

Article 4

In this Law, the following terms are defined as follows :

1. A "land-use right assignment" is a change of hand, a transfer or a hand-over to another person, of the right to use land in accordance with law.

2. The "taxable entity" is an organization, a family household, or an individual that assigns the right to use land in accordance with law.

Chapter II

BASES FOR TAX CALCULATION

Article 5

The bases for calculating the tax on land-use right assignments are the acreage of the land, the value of land and the tax rate.

Article 6

The value of the land use for calculating the tax on the assignment of land-use rights is set by the People's Committee of provinces and cities directly under to the Central Government, which is within the value range set by the Government in accordance with the practical situation in each locality.

Article 7

The tax rates on the assignment of land-use are set as follows :

1. For an organization, a family household or an individual who has right to use land but who has not paid for its use, or is required to pay for it under the Land Law, the tax rate is as follows :

a. Land for agriculture, forestry, aquaculture and salt production : 10% (ten percent)

b. Land for residence, construction and other uses : 20% (twenty percent)

2. In case an organization, a family household or an individual that has the right to use land and has paid for the use under the Land Law, and in case the assignment of the land-use right is made for the second or more time and for which tax has been paid in the previous assignment in accordance with the provision of Item 1 of this Article, they shall, when permitted to make the assignment, pay a tax of 5% (five percent).

3. In case organizations, family households or individuals exchange their assigned land plots which have different values due to the difference in acreage, location or the type of land, the tax is 5% (five percent) of the difference in value.

Article 8

When the authorized State agency allows a change in the purpose of the land use, the assignment of the land-use right is to be carried out as follows :

1. If the purpose of the land use is to change from agriculture, especially long-terms rice cultivation, to non-agriculture undertakings, the tax shall be at least 40% (forty percent). If the change is from an agricultural project to an industrial project, the tax shall be below 40% (forty percent). The detailed tax rates shall be submitted by the Government to the National Assembly Standing Committee for approval.

2. If the change is from non-agricultural to an agricultural purpose, the tax shall be 0% (Zero percent).

Article 9

When necessary, the Government may propose that the National Assembly Standing Committee amend or supplement the tax rates, provided for in Article 7 and 8 of this Law, and submit a report on the matter for approval at the next meeting of the National Assembly.

Chapter III

DECLARING AND PAYING TAX

Article 10

An organization, family household or individual that assigns the land-use right has the responsibility to :

1. Declare to the tax agency the type of land, its acreage, location and value, along with the permit for change of land-use purpose (if any) and other papers related to the processing of the assignment of the land-use right;

2. Supply the necessary documents related to tax calculating as requested by the tax agency; and

3. Pay the tax in full and on time as specified by the tax agency.

Article 11

The tax on land-use right assignment shall be paid in one installment as specified by the tax agency. The authorized State agency shall issue a certificate of land-use right to the assignor only after the later has paid the tax in full.

Article 12

The tax on land - use right assignment shall be paid to the tax agency at the locality where the land use right is assigned.

Article 13

The tax agency has the following tasks and powers :

1. To guide the taxpayer in making a proper declaration and full payment of his/her tax on the assignment of land-use rights;

2. To examine and verity documents to be used as the bases for calculating tax to determine the tax rates;

3. Within 30 (thirty) days from receipt of the declaration, the tax agency shall notify the taxpayer the tax amount and the terms for payment; upon collecting the tax, the tax agency shall issue a  receipt released by the Ministry of Finance;

4. To record violations and to determine the administrative penalties for the violation within its jurisdiction or, depending on the extent of the violation propose an investigation for criminal responsibility as provided for by the law concerning the violation of the Law on Tax on Land-Use Right Assignment; and

5. To examine and address protests related to tax on land-use right assignments within its jurisdiction.

Chapter IV

 TAX EXEMPTION AND REDUCTION

Article 14

1 Tax shall be exempt for family households and individuals who assign their land-use rights to move to new economic zones, mountainous areas and islands by decision of the authorized State agency;

2. The tax on land-use right assignments shall be inapplicable or reduced for public employees who move to new places of residence due to changes in their jobs or due to their retirement by decision of the authorized agency.

The Government shall define detailed provisions for tax exemption and reduction for the taxable subjects stipulated in Item 2 of this Article.

Article 15

Tax on land-use right assignment shall be reduced by 50% (fifty percent) for the following cases :

1. War disabled of 1/4 and 2/4 degrees, and diseased army men of 1/3 and 2/3 degrees;

2. Family members of the fallen combatants, who are entitled to State subsidies; and

3. Disabled people who no longer have the ability to work, and people who are either under aged or old and helpless.

Article 16

Each of the taxable entities identified in Article 14 and 15 of this Law shall be considered for exemption or reduction from the tax on  land-use right assignment only in the first assignment.

The power for decision and the procedure for consideration of exemption or reduction from the tax on land-use right assignment shall be stipulated by the Government.

Chapter V

THE HANDLING OF VIOLATIONS AND REWARDS.

Article 17

The taxable subjects who violate the Law on Tax on Land-Use Right Assignments shall be penalized as follows :

1. For a false declaration or tax evasion, apart from paying in full the tax provided for by this Law, the taxable subject shall pay a fine equivalent to one to three times the evaded tax.

2. For an untimely payment of the tax or a fine in the amount written in the tax notification or penalty decision, apart from paying in full the tax or fine as provided for by this Law, the taxable subject shall pay for each day of delay by way of a fine equal to 0,2% (two thousandths) of the amount of delayed payment;

3. Individuals who evade tax of a substantial amount, or who havereceived administrative discipline for violations set forth in Items 1 and 2 of this Article but who still commit the same or  other serious violations, shall be investigated for penal liability as provided for by the law.

Article 18

The jurisdiction for dealing with tax violations is defined as follows :

1. For a taxable subject whose violation is stipulated in Item 1, Article 17 :

a. The head of a tax bureau is authorized to levy a cash fine which is equal to the evaded tax;

b. The director of the Tax Department is authorized to levy a cash fine which may amount to three times the evaded tax;

2. The heads of tax bureaus at all levels shall manage the collection of the tax on land-use right assignments, and are authorized to levy a fine on delayed tax payments and other fines, as provided for in Item 2 of Article 17 of this Law, and decide other penalties in accordance with the legal provisions for administrative fines.

Article 19

Individuals who hinder, or incite others to hinder, investigations into and the handling of violations, of the Law on Tax on Land-Use Right Assignment shall, depending on the extent of their violations, be given an administrative fine or investigated for penal liability in accordance with the law.

Article 20

Tax collectors and other individuals who take advantage of their powers and capacity to usurp or embezzle tax money shall, apart from reimbursing to the State all the usurped or embezzled tax money, have to pay a cash fine equivalent to 0,2 to 0,5 times the usurped or embezzled tax money and depending on the extent of their violations, be disciplined or investigated for penal liability in accordance with the law.

Tax collectors and other individuals who, taking advantage of their power and competence, shield the violators, intentionally break rules or show a lack of responsibility in the execution of this Law shall, depending on the extent of their violations, be disciplined or investigated for penal liability in accordance with the law.

The tax agency which mishandles its work and causes losses to taxpayers and those who are subject to its handling shall have to compensate for the losses. The tax collectors who are connected to this mishandling shall, depending on the extent of their mistakes, be disciplined or investigated for penal liability.

Article 21

The tax agency and collectors that fulfill their assigned duties well, and those who are credited with discovering violations of this Law, shall be rewarded in accordance with the State reward regime.

Chapter VI

PROTEST AND TIME LIMIT

Article 22

Organizations, family households and individuals have the right to protest against improper implementation of the Law on Tax on Land-Use Right Assignment. The tax bureaus at all levels are responsible for handling protests against acts concerning the implementation of the Law on Tax on Land-Use Right Assignment.

Written protests shall be sent to the tax bureau which issue the tax notification or the penalty decision within 30 (thirty) days from the receipt of the notification or decision.

Pending a solution, the protesters shall still pay in full and on time the taxes or fines already notified to them. The recipient of a written protest shall have to examine and handle in within 15 (fifteen) days from receipt. In case a protest concerns a compacted matter, the time limit may be extended but shall not exceed 30 (thirty) days from such receipt.

Article 23

In case the protester does not agree with the decision made by the executing office of his/her protest, or his/her protest has not been handled within the set time frames, he/she may lodge a protest with the tax agency immediately above the executing office. The decision taken by this next higher tax agency shall take effect. The decision taken by the Minister of Finance is final.

Article 24

The tax agency shall have to return the tax or fine money which it has taken improperly and pay the compensation (if any) within 15 (fifteen) days from the receipt of the decision.

Article 25

In case a discovery is proved right on a false declaration or tax evasion, within three years from the date the false declaration or tax evasion is made, the tax agency is authorized to recover the evaded tax handle the violation in accordance with Article 17 of this Law.

Chapter VII

PROVISION OF IMPLEMENTATION

Article 26

The Minister of Finance is responsible for organizing the implementation and inspection of the collection of tax on land-use right assignments within the entire country as well as the handling of protests and recommendation concerning the tax on land-use right assignment in accordance with his/her authority.

Article 27

The Chairman of the People's Committee at all levels shall organize the implementation and inspection of the collection of tax under this Law within his locality.

Article 28

This Law on the Tax on Land-Use Right Assignment shall take effect as of the 1st of July 1994

Any previous provisions contrary to this Law shall be annulled.

Article 29

The Government shall establish detailed provisions for the implementation of this Law.

This Law war passed by the Nationals Assembly of the Socialist Republic of Vietnam, Ninth Legislature Fifth Session, on June 22, 1994

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