Name of recommendations: Recommendations on land lease for investment in export processing zones and industrial parks
Status: Has not been responded
Recommended by units: VN Linh Trung - Subzone Co., Ltd
Official letter: 1602/ PTM - VP, dated: 2018-07-25
VN Linh Trung - Subzone Co., Ltd is an investor of Linh Trung 1 Export Processing and Industrial Zone, Linh Trung 2 Export Processing Zone in Thu Duc District, Ho Chi Minh City and Linh Trung Export Processing Zone. (hereinafter referred to as Linh Trung Area 3) in An Tinh Commune, Trang Bang District, Tay Ninh Province. The company would like to recommend some issues related to the payment of land rental for companies trading in infrastructure of export processing zones, industrial zones (IZs, EPZs) in general and Linh Trung Sepzone Company Co., Ltd as follows:
In Clause 9, Article 3 of Decree No. 135/2016 / ND-CP, the method of calculating and collecting the land rental for a period from January 1, 2016 to the end of the lease term . This amount shall be determined on the basis of the subleased land area and the remaining land lease term as from January 1, 2016, the annual land rental is determined in accordance with law at the time January 1, 2016, plus an amount equivalent to the amount of late payment under the law in each period ... "This provision has some disadvantages compared with business practices of enterprises leased land of the State to invest in infrastructure business (EPZ, IP) as follows:
- When investing in the construction of export processing zones or industrial parks, the projects shall enjoy the land rent exemption (depending on the localities under the Government's regulations). For some enterprises, when changing the method of payment of land rent (from the State) from annual payment to one payment for the whole lease term, it is still in the period of land rental exemption, the obligation to pay land rental - should not be delayed payment. In addition, during the land use process, before the Land Law 2013 and the guiding documents were issued and in effect, some companies dealing in infrastructure of industrial zones and export processing zones requested to be converted from the annual payment form to the lump sum payment form, but it has not been allowed the approval of the competent state agencies, so they can not fulfill their obligation. Therefore, when the Decree 135/2016 stipulates that it is unreasonable to pay an additional amount of late payment when paying a lump sum rent to the company which directly affects the financial situation and economic damage to the company.
2. Specifically for the project of export processing zone Linh Trung 3, the project has been exempted from land rental until August 14, 2019. In August 2008, Linh Trung Sepzone Co., Ltd has made a proposal to pay land rent once for the whole lease term and was recorded in the Decision No. 228 / QD-CT dated 21 February 2010 of the Tay Ninh Tax Department. However, by 2014, the People's Committee of Tay Ninh Province had a decision No 2908 / QQD-UBND on approval for the company to transfer from land rental paid annually to the whole lease period. During the above-mentioned process, the People's Committee of Tay Ninh Province and the concerned agencies have not yet determined the financial obligations when paying the lump sum land rental for Linh Trung 3.
To get ideas for solving this problem, the Linh Trung Sepzone Co., Ltd has repeatedly sent a written proposal to Tay Ninh Tax Department, General Department of Taxation, Ministry of Finance. In the document No. 10839 / BTC-QLCS dated August 15, 2017 of the Ministry of Finance to the Tay Ninh Tax Department on the payment of land rent of Linh Trung 3 Industrial Zone stated "According to the report of Tay Ninh Tax Department Since August 2008, the company has proposed to transfer land rental paid annually to pay the lump sum land rental for the whole lease term and was recognized in the Decision No. 228 / QD-CT dated January 21, 2010. of the Tay Ninh Tax Department. Therefore Tay Ninh Tax Department is based on the specific records of Linh Trung Sepzone Co., Ltd to report.
The provincial People's Committee of Tay Ninh Province shall consider and handle the time for late payment according to its competence. "However, this issue has not been resolved by the local administration.
If at the time of 2008, the proposal of the company for the payment of land rental in Linh Trung 3 Industrial Zone was resolved completely by the People's Committee of Tay Ninh Province, Linh Trung Sepzone Co., Ltd fulfilled its obligations to pay a lump sum land rental both for the duration of the lease and there is no delay in paying the land rentas as present. Therefore, the delayed settlement of the above mentioned recommendation directly affects the economic benefits of the company.