New policy on non-agricultural land use tax

(Baonghean) -On October 23, 2012, the Ministry of Finance issued Official Dispatch No. 14452/BTC-TCT on the implementation of the non-agricultural land use tax policy. Accordingly, to unify the understanding and implementation of the non-agricultural land use tax policy, the Ministry of Finance provides guidance on a number of issues as follows:

1. For houses purchased from housing construction projects for sale or rent.

In case the person with the right to use the land leases the land under a contract, the taxpayer is determined according to the agreement in the contract. In case the contract does not have an agreement on the taxpayer, the person with the right to use the land is the taxpayer;

In case the State allocates or leases land to carry out housing projects for sale or lease, the taxpayer is the person to whom the State allocates or leases the land. In case of transferring land use rights to other organizations or individuals, the taxpayer is the transferee.

For land in multi-storey houses with many households living in them, apartment buildings, including cases where it is both for residence and business purposes, the taxable land area of ​​each taxpayer is determined by multiplying the allocation coefficient by the area of ​​the house (construction) that the taxpayer uses, in which:

In case of residential land in use before January 1, 2012, the residential land limit used as the basis for tax calculation is determined as follows:

In case at the time of granting the Certificate, the Provincial People's Committee has regulations on the residential land allocation limit, the residential land recognition limit and the residential land area in the Certificate is determined according to the residential land allocation limit, the residential land allocation limit shall be applied as the basis for tax calculation. In case the residential land allocation limit is lower than the current residential land allocation limit, the current residential land allocation limit shall be applied as the basis for tax calculation;

- About taxpayers:

+ For apartments that the project investor has transferred to organizations or individuals, the transferee is the taxpayer. In case the transferee does not use the apartment but rents it to another organization or individual under a contract, the taxpayer is determined according to the agreement in the contract; If there is no agreement in the contract, the transferee is the taxpayer.

+ For apartments that the investor has not transferred to other organizations or individuals, the investor is the taxpayer; In case the investor leases to other organizations or individuals under a contract, the taxpayer is determined according to the agreement in the contract; If there is no agreement in the contract, the investor is the taxpayer.

- Regarding land price, taxable land area and tax rate:

+ Taxpayers are project investors: the taxable land area is the entire taxable land area of ​​the building (including the basement) that the investor has not transferred the house ownership and land use rights. Land price is according to the provisions of Article 6, Circular No. 153/2011/TT-BTC, Tax rate is 0.03%.

+ For the case where the taxpayer is a household or individual receiving the transfer: the taxable land area is determined according to the provisions in Section a, Point 1.3, Clause 1, Article 5, Circular No. 153/2011/TT-BTC; The taxable land price is the residential land price regulated by the provincial People's Committee corresponding to the location; The tax rate is proportional to the taxable land area.

2. For real estate of individual households in old apartment buildings and collective housing areas.

- In Clause 2, Section 3.1, Clause 3, Article 2, Circular No. 45/2011/TT-BTNMT dated December 26, 2011 of the Ministry of Natural Resources and Environment guiding the determination of land area used for improper purposes, encroached land area, unused land area in accordance with regulations to calculate non-agricultural land use tax stipulates:

2.1. Encroached land as stipulated in Clause 7, Article 7 of the Law on Land Use Tax is the additional land area currently used for the purpose of being subject to land use tax, originating from the land user's self-transfer of boundary markers and boundaries to land with a legal owner or to land managed by the State without the permission of the land user or without the permission of a competent state agency. In case the area of ​​the land plot after re-measurement is changed compared to the legal documents on land use rights, but the boundary markers and boundaries of the land plot are not changed, the additional area is not determined as encroached land.

3. Land occupied as prescribed in Clause 7, Article 7 of the Law on Non-agricultural Land Use Tax is land currently used for purposes subject to non-agricultural land use tax, originating from one of the following cases:

3.1. Occupied land is land that the current land user has occupied by himself/herself, land managed by the State or land that already has a legal owner without permission from a competent state agency or the land user.

- In the case of households and individuals expanding or encroaching on land or common space: If households and individuals on the first floor encroach on common land for use and households and individuals on the upper floors also take advantage of that area for expansion or use, households and individuals on the first floor and upper floors must pay tax on this area according to the tax rate applied to encroached land; In the case where only households and individuals living on the upper floors encroach on space to expand the use area, no tax will be collected on this area.

3. On the application of land limits as the basis for calculating tax on land without a Certificate.

In case the Certificate has not been granted, the limit does not apply. The entire taxable residential land area of ​​the taxpayer is subject to the tax rate for the land area within the limit.

In case of change of taxpayer, the taxable residential land limit is the current residential land allocation limit prescribed by the provincial People's Committee and is applied from the next tax year, except for the case of change of taxpayer due to inheritance, gift or donation between: husband and wife; biological father, biological mother and biological child; adoptive father, adoptive mother and adopted child; father-in-law, mother-in-law and daughter-in-law; father-in-law, mother-in-law and son-in-law; paternal grandfather, paternal grandmother and grandchild; maternal grandfather, maternal grandmother and grandchild; siblings, the taxable residential land limit is implemented according to the prescribed residential land limit and applied to the transferor.

- In the case where many households are using the same plot of land that has been granted a Certificate (due to inheritance or transfer), but each household has not been granted a Certificate for the actual land area used, each household must declare and pay taxes for the actual land area used. The residential land limit applies as follows:

+ In case the land is inherited, donated, or presented between the land user and the person whose name is on the Certificate in one of the following cases: husband and wife; biological father, biological mother and biological child; adoptive father, adoptive mother and adopted child; father-in-law... then the prescribed limit for the person whose name is on the Certificate shall apply.

4. For land allocated or leased by the State to carry out investment projects in industrial zones.

In case the State allocates or leases land to carry out an investment project, the person to whom the State allocates or leases land is the taxpayer.

Therefore, for land in industrial zones, the units that are allocated land or leased land by the State are subject to declaring and paying land use tax. In case the industrial zone infrastructure business company is allocated land or leased land by the State and sub-leases the land to carry out investment projects, the industrial zone infrastructure business company must declare and pay tax.

5. On determining land price for tax calculation for land plots with different locations.

The price of 1m2 of taxable land is the land price according to the purpose of use of the taxable land plot as prescribed by the Provincial People's Committee and is stabilized for a 5-year cycle, starting from January 1, 2012.

- In case the Provincial People's Committee has specifically prescribed the method of determining land price as the basis for calculating tax for land plots located in different locations, the regulations of the Provincial People's Committee shall apply.

- In case the provincial People's Committee has not yet issued regulations, the tax authority shall coordinate with local authorities to determine land prices as the basis for calculating taxes corresponding to each location of the land plot according to the weighted average method or propose a calculation method suitable to local reality and report to the provincial People's Committee for additional regulations.

6. On tax exemption and reduction.

Tax exemption and reduction only apply directly to taxpayers and are only calculated on the tax amount as prescribed in the Law on Land Use Tax and instructions in Circular 153/2011/TT-BTC dated November 11, 2011 of the Ministry of Finance.

On the issuance of exemption decisions.

Tax authorities must issue decisions on tax exemption or reduction for taxpayers according to the tax calculation period (year). In cases where there is no change in the amount of tax incurred or the amount of tax exempted or reduced during a stable period (5 years), the tax authorities may issue decisions on tax exemption or reduction for the entire stable period.

Duong Hong Quang (Nghe An Tax Department)