New regulations on land rent exemption and reduction
1. Conditions for exemption and reduction of land rent
According to Clause 3, Article 19 of Decree 46/2014/ND-CP, land rent exemption is applied during the basic construction period. In addition, for projects in areas with special socio-economic difficulties, the land rent exemption period is extended to 11 years.
The list of investment incentive areas and sectors is determined according to investment law provisions.
2. Regulations in Decree 103/2024/ND-CP
Decree 103/2024/ND-CP emphasizes two new principles in exempting and reducing land rent:
Handling violations of land rent exemption and reduction conditions:
If the land user is found to not meet the conditions or to be using the land for the wrong purpose, the state agency will recover the exempted or reduced amount, including late payment fees. The recovery is based on the land price at the time of calculation according to the provisions of the Land Law.
Exemption and reduction are not applicable to some specific fields:
Business projects in goods and services subject to special consumption tax are not entitled to incentives, except for the production of automobiles, airplanes and yachts.
3. Provisions on preferential transfer
For land lease projects before August 1, 2024, the old incentives will still apply if the application is valid. However, if the incentive level under the new Decree is higher, the enterprise will enjoy the higher level for the remaining period.
Specific instructions from the General Department of Taxation
The General Department of Taxation notes that local tax authorities need to base on new regulations and actual situations to implement:
For projects subject to special consumption tax, it is necessary to clearly identify the area that is not exempted. If it is not possible to separate this area, please coordinate with the Ministry of Planning and Investment for detailed instructions.
In case of any problems, relevant agencies should proactively seek opinions from the Ministry of Finance and relevant ministries.
Meaning of the new regulation
New regulations on land rent exemption and reduction not only increase transparency but also ensure fairness in the use of land resources. At the same time, this is an important basis for tax authorities to strictly control policy implementation, avoiding budget losses.
