THE MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 120/2005/TT-BTC
Hanoi, December 30, 2005
 
CIRCULAR
GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S 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 Government Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Finance Ministry;
Pursuant to the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land rents and water surface rents;
The Finance Ministry hereby guides the collection of land rents and water surface rents as follows:
Part A
GENERAL PROVISIONS
I. SCOPE OF APPLICATION
This Circular guides the collection of land rents, water surface rents, applicable to cases of land lease, water surface lease specified in Article 1 of the Government’s Decree No. 142/2005/ND-CP of November 14, 2005, on collection of land rents, water surface rents (hereinafter referred to as Decree No. 142/2005/ND-CP), including:
1. The State leases land under the provisions of Article 35 of the Land Law, falling into land categories specified in Article 13 of the Land Law (Appendix No. 01).
2. The State permits the shift from land assignment to land lease in the following cases:
2.1. Shift from land assignment without the collection of land use levies to land lease.
2.2. Shift from land assignment with the collection of land use levies to land lease.
3. The State leases water surface, sea surface (referred to collectively as water surface lease) in the territorial waters and continental shelf of Vietnam, which do not fall into land categories specified in Article 13 of the Land Law.
II. PAYERS OF LAND RENTS, WATER SURFACE RENTS
Land rent, water surface rent payers defined in Article 2 of Decree No. 142/2005/ND-CP; Clause 1 and Clause 2 of this Article are guided as follows:
1. Clause 1 specifies cases where the State leases land with the annual collection of land rent; some cases are guided in detail as follows:
1.1. Households and individuals that wish to continue using the agricultural land areas in excess of the norms assigned before January 1, 1999, while the land use duration has expired shall be entitled for the continued use thereof for a duration being equal to half (1/2) of the land assignment duration, and later have to shift to land lease according to the provisions of Clause 2, Article 67 of the Land Law.
1.2. Households and individuals that are not directly engaged in agricultural production, forestry, aquaculture or salt-making and are assigned land without the collection of land use levies for development of farm economy shall have to shift to land lease according to the provisions of Item b, Clause 4, Article 82 of the Land Law, as specified in Clause 1, Article 75 of the Government’s Decree No. 181/2004/ND-CP of October 29, 2004, on implementation of the Land Law (hereinafter referred to as Decree No. 181/2004/ND-CP).
1.3. Economic organizations, households and individuals that lease land for use as ground for production and/or business, mineral activities, production of building materials, making of pottery articles as provided for in Clause 1 of Article 93, Clause 1 of Article 94, Clause 1 of Article 95 of the Land Law; lease land for execution of investment projects on agricultural production, forestry, aquaculture or salt making under the provisions of Article 74 thru Article 82 of the Land Law; lease land for construction of public works for business purposes under the provisions of Point b, Clause 5, Article 6 of Decree No. 181/2004/ND-CP.
1.4. Economic organizations that lease land for investment in the construction of infrastructure for sale or lease of land where infrastructure has already been constructed, including the construction of infrastructure of industrial parks, hi-tech parks, economic zones, rural population quarters, urban population quarters and other cases of infrastructure construction.
1.5. Public non-business units that are leased land by the State for execution of investment projects approved by competent state bodies must pay land rents according to Decree No. 142/2005/ND-CP and the guidance in this Circular.
1.6. Organizations that are assigned land without the collection of land use levies, are lawfully transferred with the land use rights from other persons or are assigned land with the collection of land use levies, provided that the money has been paid for the land use right transfer or the land use levies paid to the State originate from the state budget, and are using land for production and/or business purposes, for construction of public works for business purposes, and now select the form of land lease shall have to pay land rents.
2. Clause 2 specifies cases where the state leases land or water surface with the annual collection of land rents or with the lump-sum collection of land rents for the whole land lease or water surface lease term; a number of cases are guided in detail as follows:
2.1. Point b specifies a number of foreign organizations with diplomatic function, non-governmental organizations, that lease land for construction of their working offices, include diplomatic missions, consulates, other foreign representative offices with diplomatic functions recognized by the Vietnamese Government; representative offices of organizations under the United Nations, inter-governmental agencies or organizations, representative offices of inter-governmental organizations, non-governmental agencies or organizations; representations of non-governmental organizations.
2.2. Point c which defines economic organizations, households, individuals, overseas Vietnamese, foreign organizations or individuals, that are permitted by the State to use water surface, sea surface falling outside the land categories specified in Article 13 of the Land Law for execution of investment projects, shall cover joint-venture enterprises with foreign investment capital, Vietnamese parties to business cooperation contracts, that are leased water surface, sea surface by the State for execution of investment projects.
2.3. Overseas Vietnamese, foreign organiza-tions and individuals, that are leased urban land for execution of investment projects on construction of residential houses for sale or lease must:
a/ Pay land rents annually for projects on construction of residential houses for lease.
b/ Pay land rents in lump sum for the whole leasing term for projects on construction of residential houses for sale or lease; when selling residential houses, investors must pay to the State the differences between the land use levies and the paid land rents as follows:
- For villa houses, the land rents shall be paid within a month as from the date of signing house sale contracts.
- For condominium houses, the differences must be paid by the time of project completion at the latest.
The land use levies shall be calculated at the land prices set by provincial/municipal People’s Committees (hereinafter called provincial-level People’s Committees for short) at the time of paying the difference money.
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