In October 2024, Mr. Le Huu Hoang - Permanent Vice Chairman of Khanh Hoa Provincial People's Committee - signed a document assigning the Tax Department to urge tax debt collection and implement tax enforcement measures according to its authority.
Tax debt due to land price increase
Before the above directive, the tax authority in Khanh Hoa proposed that the Khanh Hoa Provincial People's Committee direct relevant units to carry out land recovery procedures for 11 enterprises due to failure to fulfill financial obligations regarding land as of August 31, with an amount of hundreds of billions of VND.
Among the 11 enterprises mentioned above, Nha Trang Tropical Company Limited and Cam Ranh Marina and Resort Club Joint Stock Company (Cam Ranh Marina Company) are listed with large tax debts, respectively 72 billion VND and 216 billion VND.
Regarding tax arrears, Nha Trang Tropical Company Limited and several other companies are petitioning the local authorities to review the land rental price increase compared to the previous period.
According to the representative of Nha Trang Tropical Company Limited, the application of the new coefficient K=4 (land price adjustment coefficient) has caused the land rental price to increase very high, 8 times higher than the unit price that businesses paid for the period from 2016 - 2020. For example, Nha Trang Tropical Company Limited increased from more than 5 billion VND/year to 26 billion VND/year (an increase of 420%).
“The fact that the People's Committee of Khanh Hoa province calculated the land rental costs for the 2020-2024 and 2021-2025 cycles to increase dramatically has caused businesses to not have enough revenue to fulfill their obligations to pay the state budget (land rental), even when the market recovers as before.
This will lead to businesses owing taxes, resulting in consequences such as late payment penalties, account freezes, enforcement, pushing businesses to bankruptcy..." - representative of Nha Trang Tropical Company Limited shared.
In addition to Nha Trang Tropical Company Limited, a number of other projects in Nha Trang City are also facing difficulties as the locality is slow to determine financial obligations following the conclusions of the Central Inspection Agency.
After inspection, land tax was also collected.
Cam Ranh Marina Company (City Gate Cam Ranh) is currently the enterprise with the highest tax debt in Khanh Hoa.
Previously, the tax department had collected 171 billion VND in land tax from this company (in 2020). Cam Ranh Marina Company then sued the tax authority in court (in 2022). However, the court ruled that the above collection by the authorities was well-founded and in accordance with the law.
There are many reasons why the court dismissed the lawsuit of Cam Ranh Marina Company, including the reason that in 2020, when implementing the conclusion of the Central Inspection Committee, Khanh Hoa province issued notices directing the Tax Department to review and handle the recovery of land use fee and land rent exemptions for a number of projects, including the Cam Ranh City Gate project.
Furthermore, the Khanh Hoa Provincial Tax Department stated that the company's project site "used land for purposes other than those stated in the land lease decision" in violation of Decree 123 of 2017, so it must return to the state budget the amount of land rent that had been exempted or reduced.
Regarding the businesses' reflections on the very high increase in land rental prices, the representative of Khanh Hoa Provincial Tax Department said that, according to the provisions of the Land Law, the Government regulates land prices in areas and regions with a framework every 5 years, on that basis, the provinces are assigned to issue land price lists, on the basis of that unit price also every 5 years.
According to this person, the increase depends on the land fund and location, whether it is 8 times or 5 times..., but the increase is correct. The issue of building a land price list is based on the principles of the Law and the province also complies with that principle.
