One of the financial obligations of land users is the obligation to pay land use fees and land rent. Recently, the Government has issued new regulations on land use fees and land rent in Decree 103/2024/ND-CP to guide the new regime effective under Land Law 2024 in Vietnam. Below, we will analyze some notable contents in Decree 103/2024/ND-CP regulating land use fees and land rents.
1. Decree 103/2024/ND-CP has specified the provisions of the Land Law 2024 on land use fees and land rents, specifically:
Land use fees are applied to entities to whom the state allocates land, while land rent is applied to entities to whom the state leases land and has obligations.
The following cases are specified:
- The State allocates land with land use fees collected
- The State leases land (including land with water surface).
- The State allows the change of land use purpose to land types subject to land use fees or land rent.
- The State recognizes land use rights, adjusts land allocation decisions, adjusts detailed planning, allows conversion of land use forms, and allows multi-purpose land use according to the provisions of law, which gives rise to obligations regarding land use fees.
- The State leases land to build underground works for business purposes that are not underground parts of above-ground works; land to build above-ground works to serve the operation, exploitation, and use of underground works.
- The State recognizes land use rights, extends land use, adjusts land use terms, adjusts land lease decisions, adjusts detailed planning, allows conversion of land use forms, and allows multi-purpose land use according to the provisions of law in cases where land rent must be paid according to regulations.
2. New regulations on land rental prices with annual rental payment
The Land Law 2024 specifically stipulates cases where specific land prices are applied to calculate land rent, the land price list is applied to calculate land rent when the State leases land and collects annual land rent; specifically stipulates cases where the State leases land and collects land rent once for the entire lease term; leases land and collects annual rent in the remaining cases; the land price list is built according to area and location.
For areas with digital cadastral maps and land price databases, a land price list will be developed for each plot of land based on the value zone and standard plot of land. The land price list will be developed for the first time to be announced and applied from January 1, 2026, and will be adjusted, amended, and supplemented for announcement and application from January 1 of the following year.
Based on these regulations, Article 26 of Decree 103/2024/ND-CP stipulates the unit price for land rental payments annually. Accordingly:
Annual land rental price = Percentage (%) of land rental price multiplied by (x) Land price for calculating land rental fee
In which:
- The percentage (%) for calculating the annual land rental price is from 0.25% – 3% calculated by the Provincial People’s Committee for each area and route corresponding to each land use purpose after consulting the People’s Council at the same level.
- The land price for calculating land rent is the land price in the Land Price List (according to regulations in Point b, Point h, Clause 1, Article 159 of the Land Law); determined in units of VND/m2.
3. New regulations on land use fee exemption and reduction from August 1, 2024
Decree 103/2024/ND-CP regulating land use fees and land rents clearly states that land use fees are exempted in the cases specified in Article 18 and land use fees are reduced in the cases specified in Article 19.
To strengthen post-inspection and handling after the State allows exemption or reduction of land use fees, Clause 8, Article 17 stipulates that in cases where competent state agencies discover that land users have been exempted or reduced from land use fees but do not meet the conditions for exemption or reduction but are not subject to land recovery, they must return to the state budget the amount of land use fees that have been exempted or reduced. This new regulation has added guidance on handling cases where competent state agencies discover that land users have been exempted or reduced from land use fees but do not meet the conditions for exemption or reduction of land use fees as prescribed.
4. New regulations on land rent exemption and reduction from August 1, 2024
Decree 103/2024/ND-CP specifically stipulates cases of land rent exemption in Article 39; designs land rent reduction levels according to investment incentive sectors and investment incentive locations according to the provisions of the law on investment, which are similar to the current regulations in Decree 46/2014/ND-CP (amended and supplemented in Decree 135/2016/ND-CP, Decree 123/2017/ND-CP).
Article 157 of the Land Law 2024 only stipulates exemption and reduction of land use fees and land rents for cases of land use for production and business purposes in investment incentive sectors or investment incentive areas (regardless of socialized sectors as in the Land Law 2013).
Therefore, Articles 39 and 40 of the Decree only provide general regulations on preferential levels of exemption and reduction of land use fees for projects in investment incentive sectors and areas without establishing separate incentives for projects using land to build public works for business purposes (socialization).
5. Note the transitional regulations on the amount of money that land users must pay additionally for the period not yet calculated for land use fees and land rent.
Article 257 of the Land Law 2024 stipulates transitional provisions for cases where there has been a decision on land allocation, land lease, permission to change land use purpose, permission to change from annual land lease to one-time land lease for the entire lease term, land use extension, adjustment of land use term, adjustment of detailed planning before the effective date of this Law but the land price has not been decided.
Article 50 and Article 51 of Decree 103/2024/ND-CP guide the amount of money that land users must pay in addition to the period when land prices have not been decided for the cases specified in Article 257 of the Land Law according to 04 options:
Option 1: The amount of money that land users must pay additionally for the period not yet calculated for land use fees and land rent is calculated by:
The average deposit interest rate of 03 commercial banks in which the State owns more than 50% of the charter capital in the province or centrally-run city where the land is located for a term of 03 months is calculated on the amount of land use fee and land rent payable, determined according to the provisions of Clause 2, Article 257 of the Land Law 2024.
Option 2: The amount of money that land users must pay additionally for the period not yet calculated for land use fees and land rent is calculated by:
The average deposit interest rate of 03 commercial banks in which the State owns more than 50% of charter capital in the province or centrally-run city where the land is located for a term of 01 year is calculated on the amount of land use fee and land rent payable.
Option 3: The amount of money that land users must pay additionally for the period not yet calculated for land use fees and land rent is calculated by:
50% of the amount equivalent to late payment of land use fees according to the provisions of the law on land use fee collection, the law on tax management from time to time, calculated on the amount of land use fees and land rent payable.
Option 4: The amount of money that land users must pay additionally for the period not yet calculated for land use fees and land rent is calculated by:
The amount is equivalent to the late payment of land use fees and land rent according to the provisions of the law on land use fee collection and the law on tax management from time to time, calculated on the amount of land use fees payable.
Contact Our Legal Experts
At TLA, our experienced attorneys specialize in diverse legal fields, including criminal, civil, corporate, and family law. We provide comprehensive legal support and personalized advice.
For Expert Legal Consultation, Contact Us:
- Lawyer Vu Thi Phuong Thanh – Director of TLA Law Firm, Hanoi Bar Association.
Email: vtpthanh@tlalaw.vn - Lawyer Tran My Le – Chairwoman of TLA Law Firm’s Members’ Council, Hanoi Bar Association.
Email: tmle@tlalaw.vn
Address: Floor 7, No. 6 Duong Dinh Nghe Street, Yen Hoa, Cau Giay, Hanoi
Website: https://tlalaw.vn/
Hotline: 0906246464
_Phi Ngoc Dung_