Point a, Clause 5, Article 2 of Decree No. 123/2017/NĐ-CP dated November 14, 2017, amending and supplementing Decree No. 45/2014/NĐ-CP on land use fees, adds Clause 10 to Article 10 as follows:

"An economic organization that is assigned non-agricultural land by the State for production and non-agricultural business purposes, which has fulfilled financial obligations regarding land use fees and is allowed by competent state agencies to be exempted or have reductions in land use fees according to land legislation in effect before July 1, 2014, when transferring a project or transferring land use rights from July 1, 2014, onward, shall be treated as follows:

a. In the case of transferring a project in connection with transferring land use rights:

-  If the amount of land use fees has been exempted or reduced, it shall not be included in the transfer price. If the recipient of the transfer continues to implement the project, they shall continue to be exempted or have reductions in land use fees as prescribed by investment laws for the remaining duration of the project.

-  If the recipient of the transfer does not continue to implement the project, they must pay land use fees as regulated for post-transfer projects. If the transferor has already fulfilled a portion of the land financial obligations, the recipient of the transfer shall inherit the obligations that the transferor has paid."

Ms. Ho Truong Kim Chi asks, based on the regulations above, whether decisions allowing exemptions or reductions in land use fees that were signed by tax authorities after July 1, 2014, but based on regulations concerning land legislation before July 1, 2014, can be applied under Point a, Clause 5, Article 2 of Decree No. 123/2017/NĐ-CP by the government for projects involving land use rights transfers after July 1, 2014.

The Provincial Tax Department of An Giang provides the following response to this issue:

Regarding the application of regulations under Point a, Clause 5, Article 2 of Decree No. 123/2017/NĐ-CP dated November 14, 2017, by the government:

Starting from July 1, 2014, when the Land Law No. 45/2013/QH13 dated November 29, 2013, took effect, the State only allocates land subject to land use fees for economic organizations assigned land for constructing residential projects for sale or combined sale and lease, and for economic organizations assigned land for infrastructure projects related to cemeteries and graveyards to transfer land use rights associated with infrastructure (Clause 2, Clause 4, Article 55).

For cases where the State allocates land for economic organizations to carry out non-agricultural production and business projects under a land lease arrangement (Point d, Clause 1, Article 56).

In cases where the State allocates land for non-agricultural production and business to economic organizations with land use fees before July 1, 2014, and these organizations have not fulfilled their financial obligations, but have submitted applications to determine financial obligations for land use fees at land use rights registration offices or resource and environment agencies or have transferred to tax authorities or financial agencies before July 1, 2014, then their cases will continue to be processed according to the land policies and prices at the time of land allocation decisions (Clause 3, Article 17, Circular No. 76/2014/TT-BTC).

In principle, these cases will still be considered for exemption or reduction in land use fees when transferring projects associated with transferring land use rights, provided they meet all the conditions specified in Point a, Clause 5, Article 2 of Decree No. 123/2017/NĐ-CP.

If there are any tax policy complications related to the economic organization where you work, it is suggested that you propose the economic organization to provide a written document outlining the specific issues and complications, which project is involved, and the related documents. The Tax Department can then provide specific clarifications.