New regulations on collection of land use fees, land rent in economic zones

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The Government has issued Decree 35/2017/NĐ-CP on collection of land use fees, collection of land rents and water surface rents in economic zones and high-tech zones newly promulgated by the Government. The decree is effective from 20/6/2017.

Under the provisions of this Decree, the determination of land use levies in cases where land is allocated by the State with the collection of land use levies, land use purpose change or land use right transfer in economic zones to implement investment projects to build commercial houses for sale or for sale in combination with leasing under planning.

In case the government allocates residential land or recognizes the right to use residential land, the conversion of land use purpose into residential land for family households and individuals in the economic zone shall comply with the provisions of Decree No.45/2014/NĐ-CP dated 15/5/2014 of the Government on collection of land use fees and amendments and supplements (if any).

Specifically, in cases the government leases land for annual payment which is not in the form of auction in accordance with the provisions of law, the annual land rent shall be determined in percentage mulpiply with thespecific land rental price.

In particular, the rate of unit price of land rental is from 0.5 to 3%. The People's Committees of the provinces and cities shall make specific provisions for each land position, area or route corresponding to each land use purpose in accordance with the planning already approved and promulgated by the competent authorities during the implementation.

With regard to the land rental price, the case of land lease with annual land rents shall not be in the form of auction for five years from the time when the management board of the economic zone decides to lease the land or the provincial People's Committee Decision to lease land. At the end of the stabilization period, the Management Board of the Economic Zone shall adjust the land rent applicable for the next period according to the policy and land price at the time of adjustment.

For cases where land rent is paid by the Government for a lump-sum payment for the entire lease term, which is not auctioned according to the provisions of law, the land rent unit, which is levied once for the whole lease term, is the specific land price for the duration of land lease.

In addition, the Decree also specifies cases where the Government leases land through auction in accordance with the law; determining land rents for cases where land is leased by the Government with surface water in economic zones.

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