What is land use fee?
Clause 44, Article 3 of the 2024 Land Law stipulates: Land use fee is the amount of money that a land user must pay to the State when the State allocates land with land use fee collection, allows change of land use purpose or other cases of land use that require payment of land use fee according to the provisions of law.
Accordingly, land use fee is the amount of money that land users must pay to the State when:
- Land allocated by the State with land use fees collected;
- Permission to change land use purpose by competent state agency;
- Land use rights are recognized by the State (red book, pink book is issued for land whose origin is not land allocated or leased by the State).
Land use fee and land use tax are both financial obligations of land users, but the difference is that: Land use fee is the amount of money that must be paid to the State and is only paid in one of the three cases above, except in cases of exemption or non-payment, while land use tax is an amount paid to the state budget and paid annually.
Will interest be charged if land use fees are not paid?
* Deadline for payment of land use fees
Pursuant to Clause 3, Article 55 of the Law on Tax Administration 2019 and Decree 126/2020/ND-CP detailing the Law on Tax Administration, the deadline for paying land use fees is prescribed as follows:
- No later than 30 days from the date of issuance of the notice of land use fee payment, the land user must pay 50% of the land use fee according to the notice.
- No later than 90 days from the date of issuance of the notice of land use fee payment, the land user must pay the remaining 50% of the land use fee according to the notice.
- No later than 30 days from the date of issuance of the Notice of Land Use Fee Payment, land users must pay 100% of the land use fee according to the notice in case the amount of land use fee to be paid is re-determined after 5 years from the date of the decision on land allocation for resettlement but the household or individual has not paid the full amount of land use fee owed.
* How to calculate late payment
Point b, Clause 2, Article 3 of the 2019 Law on Tax Administration stipulates that land use fees are one of the other revenues of the state budget managed by the tax administration agency. Taxpayers or those paying other revenues are obliged to pay fully and on time as notified by the tax authority.
According to Point a, Clause 2, Article 59 of the Law on Tax Administration 2019, when the deadline is overdue, people must pay late payment fees according to the following formula:
- Formula for calculating late payment by day
Late payment fee 1 day = 0.03% x unpaid amount
- Formula for calculating total late payment
Total late payment = (0.03% x unpaid amount) x number of days late
When people do not pay land use fees, there will be no "interest" but they will have to pay late payment fees at a rate of 0.03%/day.
