Thông tư 141/2007/TT-BTC của Bộ Tài chính về việc hướng dẫn sửa đổi, bổ sung Thông tư số 120/2005/TT-BTC ngày 30/12/2005 của Bộ Tài chính hướng dẫn thực hiện Nghị định số 142/2005/NĐ-CP ngày 14/11/2005 của Chính phủ về thu tiền thuê đất, thuê mặt nước

CIRCULAR

GUIDING AMENDMENTS AND SUPPLEMENTS TO CIRCULAR No. 120/2005/TT-BTC OF DECEMBER 30, 2005, WHICH GUIDES THE IMPLEMENTATION OF THE GOVERNMENTS DECREE No. 142/2005/ND-CP OF NOVEMBER 14, 2005, ON COLLECTION OF LAND RENTS AND WATER SURFACE RENTS

Pursuant to the Land Law;
Pursuant to the Decree No. 77/2003/ND-CP of Government dated July 1, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
Pursuant to the Decree No. 181/2004/ND-CP of Government dated October 29, 2004, on the implementation of the Land Law (below referred to as Decree No. 181/2004/ND-CP);
Pursuant to the Decree No. 197/2004/ND-CP of Government dated December 3, 2004, on compensation, support and resettlement upon land recovery by the State (below referred to as Decree No. 197/2004/ND-CP);
Pursuant to the Decree No. 142/2005/ND-CP of Government dated November 14, 2005, on collection of land rents and water surface rents (below referred to as Decree No. 142/2005/ND-CP);
Pursuant to the Decree No. 17/2006/ND-CP of Government dated January 27, 2006, amending and supplementing a number of articles of the decrees guiding the implementation of the Land Law and Decree No. 187/2004/ND-CP on transformation of state companies into joint-stock companies (below referred to as Decree No. 17/2006/ND-CP);

The Ministry of Finance provides guidance on amendments and supplements to Circular No. 120/2005/TT-BTC of December 30, 2005, providing the guidelines for the implementation of the Decree No. 142/2005/ND-CP of Government dated November 14, 2005, on the collection of land rents and water surface rents (below referred to as Circular No. 120/2005/TT-BTC) as follows:

I. To supplement Point 1, Section II, Part A as follows:

1- To add to the end of Item 1.4 the following:

Economic organizations that are leased land by the State under Items 1.3 and 1.4, Point 1 of this Section include also economic organizations set up as joint ventures between domestic and foreign investors under Article 8 of the Governments Decree No. 108/2006/ND-CP of September 22, 2006, detailing and guiding the implementation of a number of articles of the Investment Law.

2.- To add the following item (item 1.7):

1.7- Since July 1, 2007, households and individuals that are transferred the rights to use agricultural land in the form of transfer, donation of land use rights, handling of debts as agreed in contracts on mortgage or guarantee with land use rights; and use such land for agricultural production, forestry, aquaculture or salt making, shall shift to leasing land areas which are in excess of the limit prescribed in the National Assembly Standing Committees Resolution No. 1126/2007/NQ-UBTVQH11 of June 21, 2007, prescribing the limits on transferred agricultural land use rights of households and individuals for use for agricultural purposes.

II. To replace Section IV of Part B with the following:

IV- Determination of land rents and water surface rents under Article 7 of Decree No. 142/2005/ND-CP: several provisions are guided as follows:

1- Clause 1 is guided as follows:

1.1- The annually collected land or water surface rent is equal to the rented area multiplied by the land or water surface rent rate; the rented area is determined under the land lease decision (or land lease contract) of a competent state agency. In case the actually used area is different from the area stated in the land lease decision (or land lease contract) of the competent state agency, the rent shall be calculated according to the actually used area.

In case part of the land allocated without the collection of land use levies is used for production, business or service purposes, the land user shall pay a land rent for the land area actually used for production, business or service activities.

1.2- In case the person who is allocated land without having to pay land use levies uses the allocated land for both political tasks and production, business or service activities (the land area used for production, business or service activities cannot be separated), the land rent payable for the land area used for production, business or service activities shall be calculated according to the apportionment method.

The land rent used as a basis for apportionment is the annual land rent payable for the allocated land area and the rent rate decided by a competent agency/person under Article 6 of Decree No. 142/2005/ND-CP. The apportionment norm is turnover from goods or services sold in the year and the single-price (business price) principle must be complied with. On the basis of the price ratio of one or two services accounting for the highest share in total turnover of the unit, the tax authority and the unit shall reach agreement on the principle of ensuring the units obligation to the state budget and avoiding overcollection. Following is an example of the land rent calculation:

Example: A guest house of a provincial-level Peoples Committee performs both political tasks and provides services of lodging, rent of meeting halls, vehicle keeping, etc. The annual land rent payable for the guest houses land area is VND 25 million.

- Turnover from the rent of rooms for commercial purposes is VND 300 million

- Turnover from the rent of rooms for internal use is VND 100 million

- Turnover from other business activities is VND 150 million

- Turnover from other internal activities is VND 50 million.

On the basis of the total turnover from rented rooms, the annual unit price of a room rent for commercial purposes is VND 150,000/bed/night and that of a room rent for internal use is VND 100,000/bed/night. So, the ratio between the commercial and internal prices is 1.5. The total turnover converted (for calculating payable land rent) is as follows:

300 million + (100 million x 1.5) + 150 million + (50 million x 1.5) = 675 million

The payable land rent = (25 million : 675 million) x (300 million + 150 million) = 12.150 million

Annually, the tax authority shall base itself on the previous years financial statement to reach agreement with the unit on the land rent amount temporarily payable for the current year. In the subsequent year, on the basis of the previous years financial statement, the tax authority shall reach agreement with the unit on the previous years payable land rent and make adjustment in the notice of the years payable land rent.

2- Clause 2 is guided as follows:

For oil and gas exploitation projects in Vietnams territorial waters and continental shelf, the water (sea) surface rent shall be determined as follows:

- The area used for calculating the water (sea) surface rent is the development area under the projects development plan approved by the Prime Minister..

- The applicable water (sea) surface rent rate is the highest rate in the water surface rent bracket prescribed in Clauses 1 and 2, Article 5 of Decree No. 142/2005/ND-CP.

- The starting time for calculating and collecting water (sea) surface rents is the time when the oil and gas exploitation projects development plan takes effect after being approved by the Prime Minister.

3- The deduction of sums of money already paid as land compensations and supports from the payable land rent under Clause 3, Article 7 of Decree No. 142/2005/ND-CP (amended and supplemented under Clause 1, Article 4 of Decree No. 17/2006/ND-CP) is only applicable to the land area subject to payment of land rent and is guided as follows:

3.1- Organizations and individuals that are leased land by the State and have advanced money for land compensations and supports under Decree No. 197/2004/ND-CP and paid land rents under Decree No. 142/2005/ND-CP (applicable to the land lease duration from January 1, 2006, on) are entitled to deduct such amounts (which have valid documents and were paid according to plans approved by competent authorities) from payable land rents; the deducted amounts must not exceed the payable land rent for the whole land lease duration stated in the land lease decisions or contracts (excluding the extended land lease duration).

In case the persons that are leased land by the State have directly reached agreement on the land and asset compensation and support levels with the persons with recovered land (not through the council for compensation, support and resettlement prescribed in Article 39 of Decree No. 197/2004/ND-CP), the deductible land compensation and support money shall be calculated based on the land price based on the use purpose of the allocated land or the land with recognized use rights, which is promulgated by provincial-level Peoples Committees and applied at the time the land recovery decisions of competent state agencies take effect.

In case organizations and individuals that are leased land by the State and pay annual land rents have paid land compensation and support money under Decree No. 197/2004/ND-CP paid in 2005 land rents under the Finance Ministers Decision No. 189/2000/QD-BTC of November 24, 2000, promulgating the Regulation on land rents, water surface rents and sea surface rents applicable to forms of investment in Vietnam and the Ministry of Finances Circular No. 35/2001/TT-BTC of May 25, 2001, guiding the payment of land rents, contribution of the value of land use rights of domestic organizations, households or individuals as capital to joint ventures, they are not entitled to deduct the paid land compensation and support money against the payable land rent. From January 1, 2006 on, if they continue leasing land and paying land rents under Decree No. 142/2005/ND-CP, they are entitled to deduct the land compensation and support money (not yet apportioned into production and business expenses) from the payable land rents according to the above provisions.

On the basis of land compensation and support plans approved by competent agencies and other vouchers and documents on the paid land compensation and support money, land lessees shall make reports on finalization of land compensation and support (containing general and detailed figures) showing the data according to the approved plan, the actually paid amount, the amount not yet apportioned into production and business expenses (for projects having paid land compensation and support money under Decree No. 197/2004/ND-CP and the 2005 land rents according to regulations effective before the effective date of Decree No. 142/2005/ND-CP); send to provincial-level Finance Departments (for compensation plans approved by provincial-level Peoples Committees), district-level Peoples Committees (for compensation plans approved by district-level Peoples Committees) for certification. The tax authorities shall check the accuracy and consistency of the data in the certified finalization reports (if necessary) and effect the deduction under the provisions of this Circular and file 01 original dossier of the land lessees land rent calculation dossier.

3.2- On the basis of the deductible land compensation and support money already determined under Item 3.1 of this Point, the deduction of the land compensation and support money from the payable land rents is effected as follows:

a/ In case of payment of land rent in a lump sum for the whole land lease period, the land compensation and support money shall be deducted from the land rent for the whole land lease period; if the land rent for the whole lease period is bigger than the land compensation and support money, the land lessee shall pay this difference in a lump sum into the state budget immediately in the first year of paying land rent.

b/ In case of payment of annual land rents, on the basis of the land compensation and support money deductible from the payable land rent and the payable annual land rent, the tax authority shall make incremental deductions in the notified payable annual land rents, which must not exceed the payable land rents as prescribed in Clause 1, Article 4 of Decree No. 17/2006/ND-CP. The land lessee shall further pay the land rents after the land compensation and support money has been fully deducted (for the remaining land lease duration, if any).

In cases in which the number of years (n) during which the land compensation and support money is allowed to be deducted from the payable land rent (no land rent is paid) under the guidance at Item b, Point 2, Section IV, Part B of Circular No. 120/2005/TT-BTC has been determined, incremental deduction must be effected now under the guidance of this Circular.

3.3- In cases in which no land rent is required to be paid or projects are exempted from paying land or water surface rents specified in Clauses 1 and 2, Article 14 of Decree No. 142/2005/ND-CP, persons who are leased land by the State shall pay compensations and supports to persons with recovered land in accordance with the law on compensation, support and resettlement; expenses for compensation, support and resettlement shall be accounted as projects investment expenses.

3.4- For projects exempted from paying land or water surface rents under Clauses 3 and 4, Article 14 of Decree No. 142/2005/ND-CP, the land compensation and support money may be deducted from the land rent payable immediately at the end of the land or water surface rent exemption duration.

III. To amend Point 1, Section V, Part B as follows:

1- Clause 2 is guided as follows:

1.1- Investment projects which have land lease decisions, have been handed over land for use before January 1, 2006, and have paid annual land rents may continue applying the principle on adjustment of unit land rents indicated in the investment licenses and land lease decisions issued by competent state agencies to the investors or the land lease contracts already signed between competent state agencies and land lessees as follows:

For investment projects having any of the following three papers: investment decision or land lease decision or land lease contract issued (or signed) under the Law on Foreign Investment or the Law on Domestic Investment, which specifies the unit land or water surface rent and the principle on adjustment of the unit rent in accordance with the Ministry of Finances regulations on unit land rents and water surface rents (Decision No. 210/A-TC/VP of April 1, 1990, Decision No. 1417/TC-TCDN of December 30, 2004, Decision No. 179/1998/QD-BTC OF February 24, 1998, Decision No. 189/2000/QD-BTC of November 24, 2000, and Decision No. 1357/TC/QD-TCT of December 30, 1005), they are allowed to:

- Continue applying the unit land or water surface rents stipulated in the investment license, land lease decision or land lease contract, if the five-year stabilization period has not yet expired.

- If the five-year stabilization period has expired, adjust the unit rent on the basis of the principle on adjustment of unit rents as prescribed in the investment license, land lease decision or land lease contract.

- The order and procedures for adjusting the unit land or water surface rents comply with the provisions of Clause 2, Article 17 of Decree No. 142/2005/ND-CP and the guidance at Point 2, Section I, Part D of Circular No. 120/2005/TT-BTC.

1.2- In other cases (currently paying annual land rents or the principle on adjustment of unit land rents is not prescribed in the investment licenses or land lease decisions issued by competent state agencies to the investors or the land lease contracts signed between competent state agencies and land lessees), the unit land rents shall be adjusted under Clause 2, Article 9 of Decree No. 142/2005/ND-CP as follows:

- Cases other than those meeting the conditions specified at Point 1.1 above include: Projects currently paying annual land rents but their investment licenses, land lease decisions or land lease contracts already issued (or signed) do not prescribe the unit land rents or the principle on adjustment of unit land rents, their unit land rents shall be adjusted under Clause 2, Article 9 of Decree No. 142/2005/ND-CP.

- The land or water surface rent levels used for adjustment comply with Articles 4, 5 and 6 of Decree No. 142/2005/ND-CP and the guidance in Sections I, II and III, Section B of Circular No. 120/2005/TT-BTC.

IV- To replace Section VI, Part B with the following:

VI. The shift from land allocation to land lease by households and individuals under Article 10 of Decree No. 142/2005/ND-CP is specifically guided as follows:

1. For households and individuals that have been allocated agricultural land within the agricultural land use quotas and, when being permitted by competent state agencies to change the land use purpose to non-agricultural production and business purposes, opt for the form of land lease, the agricultural land use rights value shall be deducted from payable land rents, but the deduction level must not exceed the payable land rent amount.

The agricultural land use rights value to be deducted from payable land rents shall be calculated for the land areas subject to rent payment and at the agricultural land prices prescribed by provincial-level Peoples Committees and applied at the time of shift from land allocation to land lease under decisions of competent state agencies.

2. Households and individuals that have been allocated land by the State and paid land use levies or have been transferred the land use rights from lawful land users and now shift to land lease are entitled to deduct the assigned or transferred land use rights value from payable land rents, but the deduction level must not exceed the payable land rent amount.

The assigned or transferred land use right value to be deducted from payable land rents shall be calculated for land areas subject to rent payment and at the prices applicable to the category of the allocated or transferred land prescribed by provincial-level Peoples Committees and applied at the time of shift from land allocation to land lease under decisions of competent state agencies.

V. To replace Section VII, Part B with the following:

VII. The shift from land allocation to land lease by organizations under Article 11 of Decree No. 142/2005/ND-CP; several contents of Clauses 1 and 3 are guided as follows:

For organizations which have been allocated land by the State and paid land use levies or have been lawfully transferred the land use rights while the paid land use levies or the money paid for the transferred land use rights do not originate from the state budget, when shifting to land lease, they may deduct the assigned or transferred land use rights value from payable land rents, which shall be calculated for the land areas at the prices applicable to the category of the allocated or transferred land prescribed by provincial-level Peoples Committees and applied at the time of shift from land allocation to land lease under decisions of competent state agencies, but the deduction level must not exceed the payable land rent amount.

In cases in which payable land rents are allowed to be deducted under Sections VI and VII of Circular No. 120/2005/TT-BTC (now amended in Sections IV and V of this Circular), the tax authority shall make incremental deductions in the notified payable annual land rents, which must not exceed the payable land rents as prescribed Articles 10 and 11 of Decree No. 142/2005/ND-CP. The land lessee shall further pay the land rents after full deduction (for the remaining land lease duration, if any). In cases in which the number of years (n) during which the land rent must still be paid under the guidance at Point 2, Section VII, Part B of Circular No. 120/2005/TT-BTC has been determined, incremental deduction must be effected now under the above guidance.

VI. To replace Section I, Part C with the following:

I- Principles for land or water surface rent exemption or reduction under Article 13 of Decree No. 142/2005/ND-CP; Clause 5 is guided in detail as follows:

1- Operational projects entitled to land or water surface rent exemption or reduction at levels lower (lower exemption or reduction levels) than those specified in Articles 14 and 15 of Decree No. 142/2005/ND-CP may now enjoy the exemption or reduction levels specified in Articles 14 and 15 of Decree No. 142/2005/ND-CP for the remaining exemption and reduction duration. The remaining exemption and reduction duration shall be calculated according to the duration specified in Articles 14 and 15 of Decree No. 142/2005/ND-CP minus the duration of enjoying exemption and reduction before the effective date of Decree No. 142/2005/ND-CP.

Operational projects entitled to incentives are those which have been granted the investment incentive certificates/have such incentives indicated in their investment licenses or received exemption/reduction decisions issued by tax authorities in accordance with law before the effective date of Decree No. 142/2005/ND-CP. If the land lessees, though having paid land rent before the effective date of Decree No. 142/2005/ND-CP carries out the procedures of application for land rent exemption or reduction on or after the effective date of Decree No. 142/2005/ND-CP, the provisions on exemption and reduction and other provisions of Decree No. 142/2005/ND-CP shall be applied.

2. For operational projects which pay annual land rents and are ineligible for exemption or reduction before the effective date of Decree No. 142/2005/ND-CP, if they now continue paying land rents under Decree No. 142/2005/ND-CP and are eligible for land or water surface rent exemption or reduction under Articles 14 and 15 of Decree No. 142/2005/ND-CP, they are entitled to the prescribed exemption or reduction for the remaining incentive period.

3. For persons who are leased land by the State and pay annual land rents before the effective date of Decree No. 142/2005/ND-CP, if they execute new investment projects on the leased land which are eligible for exemption or reduction under Articles 14 and 15 of Decree No. 142/2005/ND-CP, they are entitled to the exemption or reduction prescribed in this Decree.

VII. To add a new point (Point 3); to modify and replace Point 3, Section II, Part C with Point 4 as follows:

3- Clause 3 is further guided as follows:

If the land lessee uses land for an agricultural production purpose (planting perennial trees) under a project approved by competent authorities, the land lessees is entitled to land rent exemption during the time of construction of the tree garden which varies on the basis of each type of tree and the technical process of growing and tending perennial trees issued by the Ministry of Agriculture and Rural Development.

4. Land rent exemption will be granted till the tax year 2010 for agricultural land areas within the quotas prescribed by law for each region for farmer households, state-owned farm member households, agricultural cooperative members that have received contractual land of enterprises or agricultural cooperatives and now shift to land lease under contracts signed with competent state agencies in accordance with the Land Law.

VIII. To replace Points 2 and 3, Section III, Part C with the following:

2- Clause 2 provides the lease of land for use for agricultural production, forestry, aquaculture or salt-making; when natural disasters or fires have caused damage:

- Land rent reduction in a percentage corresponding to the damage percentage shall be considered, if the damage represents less than 40% of the output.

- Land rent exemption for the damage-suffering year shall be considered, if the damage represents 40% or more of the output.

The percentage of the lost output shall be calculated on the basis of the quantity of harvested products under normal production conditions of the preceding crop or the nearest harvest.

3. Fifty percent (50%) reduction of annual land rents till the taxation year 2010 for agricultural production land areas of persons not entitled to land rent exemption under the guidance at Point 3, Section II, Part C of Circular No. 120/2005/TT-BTC (now amended at Point 4, Section VII of this Circular) and agricultural production land areas in excess of the quota prescribed by law for farmer households, state-owned farm member households and other agricultural production households.

IX. To add the following Section IV to Part C:

IV- The order and procedures for land or water surface rent exemption or reduction (below collectively referred to as land rent) applicable to the cases specified in Articles 14 and 15 of Decree No. 142/2005/ND-CP are as follows:

1- Dossier of land rent exemption or reduction:

Organizations, households, individuals, overseas Vietnamese or foreign organizations or individuals that are leased land by the State (below collectively referred to as land lessees) shall, in the first year of enjoying land rent exemption or reduction, supply to the tax authority the following dossiers of land rent exemption or reduction:

1.1- The written request for land rent exemption/reduction, stating the leased land areas (areas within and excess of quota, for the cases entitled to exemption or reduction under Point 3, Section II, Point 3, Section III, Part C of Circular No. 120/2005/TT-BTC, which are amended at Point 4, Section VII and Point 3, Section VIII of this Circular); the land lease duration, the reason for exemption/reduction and the duration of land rent exemption/reduction.

Particularly for the cases eligible for land rent exemption under Clause 6, Article 14 of Decree No. 142/2005/ND-CP:

a/ For a project under which construction is postponed due to difficulties:

- Within seven (07) days from the date of postponement of construction, the land lessee shall send to the tax authority: A written request for land rent exemption during the time of postponement of capital construction, clearly stating the reason and the time of postponement, which is certified by the investment-licensing or business registration-granting agency;

- The construction contract annex or the written record (of the postponement of construction) made by the principal and contractor, which states that the performance of the construction contract may be postponed when it is due to the fault of the principal and contractor; it is so agreed upon by the two parties or occurs a force majeure event specified in Clause 6.1, Section II, Part II of the Construction Ministrys Circular No. 02/2005/TT-BTC of February 25, 2005, providing guidance on construction contracts in construction activities.

b/ For a project which has to suspend operation due to difficulties: The land lessee shall send to the tax authority within seven (07) days from the date of suspension of operation: A written request for land rent exemption during the time of suspension of operation, which is certified by the investment-licensing or business registration-granting agency;

1.2- The investment project approved by competent authorities.

1.3- The land lease decision issued by a competent agency in accordance with the land law; the land lease contract (and the contract or a document on the contractual allocation of land between an enterprise or agricultural cooperative and the farm member household or cooperative member, for the cases eligible for exemption or reduction specified at Point 3, Section II and Point 3, Section III, Part C of Circular No. 120/2005/TT-BTC, which are now amended at Point 4, Section VII and Point 3, Section VIII of this Circular).

1.4- The investment license or business registration certificate (applicable to the cases specified in Clauses 1, 2, 3, 4, 5 and 6, Article 14 and Clauses 1, 2 and 3, Article 15 of Decree No. 142/2005/ND-CP).

1.5.- The investment certificate issued by a competent state agency in case the investment project must be recorded by the investment management agency in the investment certificate or the project is not subject to investment registration but the investor has requested certification of investment incentives under the Governments Decree No. 108/2006/ND-CP of September 22, 2006, detailing and guiding the implementation of a number of articles of the Investment Law (applicable to the case specified in Clauses 1 and 4, Article 14 of Decree No. 142/2005/ND-CP).

1.6- For the case eligible for exemption under Clause 3, Article 14 of Decree No. 142/2005/ND-CP, the submission of a dossier is divided into two stages:

a/ During the time of capital construction, starting from the time when the land rent must be paid under Clause 2, Article 7 of Decree No. 142/2005/ND-CP:

- The construction permit issued by a competent agency;

- The construction contract;

- The written record of the hand-over of land on the field;

b/ After a work or work component is completed, handed over and commissioned:

The written record of the take-over test, hand-over and commissioning of the completed work or work component, made by the investor and the construction contractor.

1.7- The agreement or commitment between the Vietnamese Government and an international organization on land rent exemption and reduction; or the certificate of the Vietnamese Ministry of Foreign Affairs or a local foreign affairs agency authorized by the Ministry of Foreign Affairs (applicable to the cases specified in Clause 7, Article 14 and Clause 4, Article 15 of Decree No. 142/2005/ND-CP).

1.8- The written record of the level of damage according to the procedures prescribed in Circular No. 89/TC-TCT of November 9, 1993, guiding the implementation of Decree No. 74/CP on agricultural land use tax, or the written record of the state or level of damage caused by natural disaster, fire or force majeure event, which is certified by the concerned commune, ward or township Peoples Committee or state management agency (applicable to the case specified in Clause 2, Article 15 of Decree No. 142/2005/ND-CP).

1.9- The written record of the level of damage (caused by natural disaster, fire or force majeure event), which is certified by the concerned commune, ward or township Peoples Committee or state management agency (applicable to the case specified in Clause 3, Article 15 of Decree No. 142/2005/ND-CP).

1.10- The decision of the Prime Minister (applicable to the cases specified in Clause 8, Article 14 and Clause 5, Article 15 of Decree No. 142/2005/ND-CP).

1.11- The land rent declaration made according to form No. 01-05/TTD land rent declaration issued together with Joint Circular No. 30/2005/TTLT/BTC-BTNMT of April 18, 2005, of the Ministry of Finance and the Ministry of Natural Resources and Environment, guiding the transfer of dossiers of land users performing the financial obligation (below referred to as Circular No. 30/2005/TTLT/BTC-BTNMT).

The land lessee in a case eligible for land rent exemption or reduction under a certain article and clause shall supply relevant papers as specified above. Papers mentioned at Items 1.1, 1.8, 1.9 and 1.11 of this Point must be original; papers mentioned at Items 1.2, 1.3, 1.4, 1.5, 1.6, 1.7 and 1.10 of this Point are copies certified by a public notary or the business establishment owner (the land lessee) with his/her signature, full name and a true-copy stamp.

2- Submission of dossiers of request for land rent exemption or reduction

The land lessee shall submit the dossier of request for land rent exemption/reduction at the same time with declaring and paying the land rent in the first year at the land use rights registration office or the natural resources and environment agency. If the request for land rent exemption/reduction is not carried out at the same with the land rent declaration and payment, the dossier of request for land rent exemption/reduction shall be submitted to the tax authority directly manage the collection of land rents.

3- Notification of and decision on land rent exemption or reduction

3.1- For the cases specified in Clauses 1, 2, 3, 4, 5, 6, 7 and 8, Article 14 and Clauses 1 and 2, Article 15 of Decree No. 142/2005/ND-CP, Point 3, Section II and Point 3, Section III, Part C of Circular No. 120/2005/TT-BTC (now amended at Point 4, Section VII and Point 3, Section VIII of this Circular), the tax authority shall examine the dossier of land rent exemption/reduction and issue an exemption/reduction decision according to its competence specified in Article 16 of Decree No. 142/2005/ND-CP.

A land rent exemption/reduction decision must clearly state the reason for exemption/reduction, the land lease period, the land rent exemption/reduction duration and the exempted/reduced land rent amount calculated at the unit land rent prescribed by the provincial-level Peoples Committee at the time of issuance of the decision.

3.2.- For the case of land rent exemption specified in Clause 3, Article 14 of Decree No. 142/2005/ND-CP:

a/ In the first year of the land rent exemption duration, the tax authority shall examine the dossier of land rent exemption/reduction and issue a notice of temporary land rent exemption according to a from issued together with this Circular (Form No. 01-07/TMTTD). This notice must clearly state the exemption reason and the duration of temporary land rent exemption (suitable to the construction period indicated in the construction contract and the construction schedule).

In the course of construction, if the project meets with difficulties and construction must be suspended, the land lessee shall make a written request (and a dossier) as stipulated at Item 1.1 (a), Point 1 of this Section. On this dossier, the tax authority shall issue a notice of extension of the temporary land rent exemption duration during the time when construction is suspended.

b/ After the work or work component is completed, handed over and commissioned, the land lessee shall supplement the dossier as required at Item 1.6 (b), Point 1 of this Section. On the basis of the dossier, the tax authority shall finalize the actually exempted amount and issue a land rent exemption or reduction decision according to its competence specified in Article 16 of Decree No. 142/2005/ND-CP.

A land rent exemption decision must clearly state the exemption reason, the exemption duration and the exempted land rent amount, namely the above finalized amount.

3.3- For the case of land rent reduction specified in Clause 3, Article 15 of Decree No. 142/2005/ND-CP:

On the basis of the written record of the state and level of damage mentioned at Item 1.9, Point 1 of this Section and other papers as required, the tax authority shall issue a notice of temporary reduction of 50% of the land rent during the time of suspension of production and business.

Within 7 working days from the date of resuming production and business activities, the land lessee shall send a written notice to the tax authority, clearly stating the time of suspension of operation, the starting and ending dates of suspension of operation and take responsibility for the notified contents.

On the basis of this notice and the practical situation, the tax authority may conduct field examination at the business establishment and issue a land rent reduction decision according to its prescribed competence.

3.4- The time limit for settlement of land rent exemption/reduction: The tax authority shall issue temporary land rent exemption within 10 days after receiving full and valid dossiers as prescribed in this Circular.

Within 30 days from the date receipt of full and valid dossiers as prescribed in this Circular, the tax authority shall issue land rent exemption/reduction decisions or notify the land lessee of the reason for their ineligibility for exemption or reduction.

Land rent exemption/reduction decisions shall be made according to a form (No. 04-07/QDTTD) issued together with this Circular.

4. Transfer of dossiers and sending of land rent exemption/reduction notices/decision

4.1- If the land lessee submits the land rent exemption/reduction dossier at the natural resources and environment agency, the dossier shall be transferred and the land rent exemption or reduction notices/decision shall be sent in accordance with Circular No. 30/2005/TTLT/BTC-BTNMT.

4.2- If the land lessee submits the land rent exemption/reduction dossier at the tax authority, the tax authority shall send the land rent exemption/reduction notices/decision to the land lessee.

Upon receiving the land rent exemption/reduction notices/decision, the land lessee shall write the date and full name in the official letter book of the agency that hands the notice to decision to the land lessee.

X. To replace Section II, Part D with the following:

II. Tax authorities directly administering taxpayers shall determine payable land or water surface rents under the provisions of Article 18 of Decree No. 142/2005/ND-CP; Item b, Clause 1, Article 18 of Decree No 142/2005/ND-CP is guided as follows:

The year of payment of land or water surface rent is the calendar year, starting from January 1 through December 31. If the first year of land or water surface lease or the final year of land or water surface lease is less than 12 months, the land rent of the first and final years shall be calculated according to the number of months of lease.

If the last month or final month of lease does not have the sufficient number of days of a month,

- A monthly land rent shall be paid if the number of days of lease is between 15 and a full month (>= 15 days).

- No land rent is required to be paid if the number of days of lease is less than 15 days (<15 days).

XI. To add the following point (Point 4) to Section II, Par D:

4- Summing up of and reporting on the collection of land rents:

4.1. The tax authority directly collecting land rents shall open land rent collection books for its locality, including:

- The annual land rent collection book (master book), made according to a form issued together with this Circular (No. 02-07/SBTTD).

- The book for monitoring and updating land rents paid by each land lessee, made according to a form issued together with this Circular (No. 03-07/SBTTD).

4.2. On a monthly basis, the tax authority shall sum up land rent collection results in the locality and report them to the superior tax authority according to reporting regulations.

4.3. Before April 30 annually, Provincial Tax Departments shall send to the General Department of Taxation reports on finalization of land rents collected in the previous year according to a form issued together with this Circular (No. 05-07/SBTTD) and reports on annual land rents of the plan year (according to the form of the master book mentioned at Point 4.1 of this Point).

XII. To amend Point 2, Section IV, Part D as follows:

To annul the provision at the third em rule at Point 2, Section VI, Part D.

XIII- Implementation effect.

This Circular takes effect 15 days after its publication in CONG BAO. The provisions of the Ministry of Finances Circular No. 120/2005/TT-BTC of December 30, 2005, which are not amended and supplemented under this Circular continue to be effective.

The previous guiding documents of the Ministry of Finance which are contrary to this Circular are annulled.

Any problems arise in the course of implementing this Circular should be promptly reported to the Ministry of Finance for study and additional guidance.-

Form No. 01-07/TMTTD

NOTICE OF TEMPORARY LAND RENT EXEMPTION
------------

On the basis of cadastral information transfer slip No/VPDK of .date month year 200 of the land use rights registration office.. for determining the financial obligation, the tax authority notify the temporary land rent exemption as follows:

1. Name of land-leasing organization, household, individual:

- Address for sending the notice of payment: .Tel.: ..

- Business line: .

2. Land plot No. ..... On map No

3. Leased land address: .

4. Street grade/area: ..Position (1, 2, 3,4):

5. Use purpose of leased land: .

6. Origin of land (decision of the State on land lease/shift from allocation to lease): .

7. Land lease period (years);

8. Leased land area (m2): .

8.1. Area subject to rent payment: ..

8.2. Area not subject to rent payment: .

9. Land rent deductions (VND)

9.1. Land compensation and support to be deducted: .

9.2. Other deductions (if any): ..

10. Temporary land rent exemption: ..

10.1. Reason for exemption:

10.2. Temporary exemption duration: years, from month year to month year.

10.3. At the end of the temporary land rent exemption duration, to finalize the actually exempted land rent amount and the land rent exemption duration according to regulations.

The tax authority notify the land lessee of the above details for information and compliance./.

Form No. 02-07/SBTTD

LAND RENT OF YEAR

Form No. 03-07/STTTD

BOOK FOR MONITORING COLLECTED LAND RENTS
Year

Form No. 04-07/QDTTD

DECISION OF THE DIRECTOR
OF THE PROVINCIAL/DISTRICT TAX DEPARTMENT.

ON THE LAND RENT EXEMPTION/REDUCTION
------------

THE DIRECTOR OF THE PROVINCIAL/DISTRICT TAX DEPARTMENT.

Pursuant to Decision No. of date month of on the functions, tasks, powers and organizational structure of the provincial Tax Department attached to the General Department of Taxation/of the district Tax Department attached to the provincial Tax Department;
Pursuant to the Governments Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land rents and water surface rents; and the Ministry of Finances Circular No. 120/2005/TT-BTC of December 31, 2005, guiding the implementation of Decree No. 142/2005/ND-CP;
Pursuant to the Governments Decree No. 108/2006/ND-CP of September 22, 2006, detailing and guiding the implementation of a number of the Investment Law;
Pursuant to investment license/business registration certificate No. date. of ;
Pursuant investment certificate No. date of;
Considering the land rent exemption/reduction application (and enclosed dossier) of;
At the proposal of the head of the Section/Group/Team;

DECIDES:

Article 1. To exemption (reduce) the payable land rent for . Headquartered at; tax identification number.; under land lease contract No date.; lease land area m2 at;

Article 2. The exempted (reduced) amount:. VND

The exemption/reduction duration (year/month). From date/../ to the end of date//

The exemption/reduction reason: (specify the applicable article and its content)

Article 3. This Decision takes effect on the date of its signing. Mr./Mrs , the head of the Section/Group/Team; Mr./Mrs. (representing the land lessee) shall implement this Decision./.