On 1 January 2018, Decree No. 123/2017/ND-CP (“Decree 123”) amending and supplementing Decree No. 45/2014/ND-CP providing the collection of the land use levy and Decree No. 46/2014/ND-CP providing the collection of the land rent and water surface rent will take effect.
The most important amendment and supplement of Decree 123 is the addition of the cases where land use levy are exempted or reduced. Accordingly, the transferee of the investment project associated with the land use right transfer from 1 July 2014 onwards and continuing to implement the project will be exempted from or reduced of the land use levy for the rest of the project provided that the below conditions are satisfied:
a. The transferor is an economic organization which is allocated the land by the State for non-agricultural production and/or business purpose with the land use levy;
b. The transferor has fulfilled its financial obligations related to land use levy and has been exempted from and reduced of the land use levy by the decision of the competent authorities in accordance with the laws issued prior to 1 July 2014; and
c. The exemption from or reduction of land use levies is not included in the transfer price.
The exemption from and reduction of land use levies will be determined in accordance with the laws on investment.