The Tax Department issued Official Letter No. 1455/CT-CS guiding the non-agricultural land use tax policy, clarifying how to determine the area of land exempted from and with reduced taxes according to current regulations.
The document was issued on the basis of receiving a proposal from the Da Nang City Tax Department on determining the land area subject to exemption and reduction of non-agricultural land use tax for establishments operating in the field of socialization or subject to investment incentives.
Determine the correct subjects and principles of tax exemption and reduction
According to the provisions of the Law on Non-agricultural Land Use Tax 2010, cases of tax exemption or reduction include:
Exemption from tax for land of socialized establishments in the fields of education, healthcare, vocational training, culture, sports, environment, etc. when fully meeting the operating conditions according to the regulations of competent state agencies.
Reduce 50% of tax payable on land of investment projects in investment incentive areas, or implemented in areas with difficult socio-economic conditions, especially difficult conditions as prescribed by the law on investment.
The law also clearly stipulates: if the taxpayer is subject to two tax reductions at the same time, tax exemption will only be applied. In case there are many investment projects, tax exemption and reduction will be considered for each specific project.
Specific guidance from Circular 153/2011/TT-BTC
The official dispatch citing Circular 153/2011/TT-BTC provides more detailed instructions on the conditions of application:
Socialized facilities can be non-public organizations, joint ventures of public service establishments, or enterprises with activities in accordance with the field of socialization, meeting the scale standards prescribed by the Prime Minister.
Projects entitled to tax reduction incentives must be on the list of preferential areas and preferential areas according to the specific list of current investment laws.
Notes when determining tax policies for each project
Official dispatch 1455 notes that local tax authorities must comply with legal regulations, apply the principle of separate tax exemption and reduction for each investment project and land use facility. The assessment of exempted and reduced land areas needs to carefully consider the nature of activities, implementation areas and the level of dap ungance of socialization conditions and investment incentives.
