On October 3, 2023, Vietnam promulgated the new policy of 25 2023 QD-TTG "On Reducing Land Rent in 2023", which exempts part of the rent amount of land use rights obtained through national channels, which came into effect and implemented on November 20, 2023.
This article introduces the relevant regulations and application procedures for land rent in Vietnam's new policy.
According to the provisions of the Land Law of Viet Nam, land in Vietnam is owned by the whole people and is managed by the state on behalf of the owners. The State grants land use rights to land users in accordance with the provisions of law.
There are two ways to obtain land tenure from the state:
1. The allocation of land use rights by the state is the main body that issues land allocation decisions by the state and grants land use rights to useful uses. Most of the allocations are a way to acquire land without compensation;
2. The state leases the land use right, which is the decision of the state to grant the land use right to the subject who needs to use the land through a contract that leases the land use right. It is a way to acquire state land for a fee.
Among them, Vietnam has strict requirements for the allocation of land use rights, and usually, the most important way to obtain land from the state is to obtain land use rights through leasing.
The rent of the land use right leased by the state is determined in accordance with the relevant provisions of the 35 2017 ND-CP "Regulations on the Levy of Land Use Fees, Land Rent and Water Surface Rent in Economic Zones and High-tech Parks".
If the state does not lease land in the form of auction, the unit price of the annual rent of the land shall be multiplied by a certain proportion according to the ** (the specific land price determined by the land price adjustment coefficient method specified in the ** land price order) (the corresponding proportion shall be determined by the Provincial People's Committee every year according to the location, area and route of each land use, and an announcement shall be issued to the public, with a range of 0.).5% 3%).
The term for payment of rent is usually one year or at the end of the lease term.
Vietnam's "On Reducing Land Rent in 2023" stipulates that:
1. Reduction and exemption amount:
30% reduction of rent payable for 2023;
2. Reduction and exemption subjects:
Lease entities that lease land directly from the state in the form of land and pay annually if an organization, unit, enterprise, family or individual obtains land use rights, house ownership and other assets attached to land in accordance with the decision or contract or certificate of the competent state authority;
3. How to apply for exemption and exemption:
1) Fill in the application form for land rent reduction and exemption in 2023 and fill in the relevant information in accordance with the template prescribed by law (attached to the attachment of "About Land Rent Reduction in 2023");
2) Sort out the land lease decision or land lease contract or the ownership certificate (copy) of the land use right, house and other land ancillary assets issued by the competent state authority;
The above two materials shall be submitted to the tax authorities that manage the collection of land rent, the management committee of the economic zone, the management committee of the high-tech park or other competent authorities through one of the three methods of on-site submission, electronic and mail. The relevant department will determine the amount of the reduction within 30 days after receiving the complete and compliant documents, and issue a "Decision on Reducing Land Rent";
4. Application deadline:
From November 20, 2023, the date of implementation of the "On Reducing Land Rent in 2023", to March 31, 2024. If the deadline is overdue, the reduction will not be accepted.
Through the above process, the relevant entity can apply for a 30% reduction in land rent.
The introduction of the new regulations is good news for investors investing in Vietnam, especially for some enterprises engaged in manufacturing and agriculture with large land areas, or engaged in land-related industries such as real estate, which can reduce an important expense.
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