Dear Lawyer! I am looking for the advice on following problem. There is a company having an approved investment project on land leased from the State with annual payment. Our company would like to repurchase this project. Our company will pay 2 pieces of land and another amount of money for this transaction.

Is this transaction legal? What kind of taxes are required by the company to pay? Does our company have to issue invoices for these 2 pieces of land and pay CIT? In particular, this leased land with a term of 40 years issued with a certificate of land use rights associated with the ownership of houses and other land-attached assets.

Lawyer give following advice:

Article 175. Rights and obligations of economic organizations and public non-business organizations using leased land with annual rental payment

c/ To sell their assets attached to the leased land upon the satisfaction of the conditions prescribed in Article 189 of this Law. The buyer of these assets may continue to be leased land for determined land use purpose by the State;”

So, your Company and Company A can implement the transaction if you fully meet the conditions at Article 189 of Land Law 2013:

1. Economic organizations, households, individuals, overseas Vietnamese and foreign- invested enterprises may sell assets attached to leased land when fully meeting die following conditions:

a/ The assets attached to leased land are legally established in accordance with law;

b/ The construction has been completed in accordance with the detailed construction master plan and approved investment project.

2. The buyer of assets attached to leased land must ensure the following conditions:

a/ Having financial capacity to implement investment projects;

b/ Having business lines relevant to investment projects;

c/ Not violating the land law when being allocated or leased land from the State to implement the previous projects.

3. The buyers of assets may continue leasing land from the State within the remaining land use term according to specific land price and for the purposes determined in the project documents.

4. The case of leasing land to implement projects on construction and commercial operation of infrastructure is prescribed in Article 194 of this Law.

If parties fully meet that conditions, they can implement the transaction as a basic assets contract. However, the object of this transaction is the assets on the land, not the land use rights and such land still was the land with annual rental payment

Procedure was prescribed at clause 5 Article 79 of Decree 43/2014/NĐ-CP and Decree 140/2016/NĐ-CP.


Secondly, about taxes:

Regarding to this exchange, your Company have to pay for following kind of taxes:

  • Enterprise income tax from the transferring land use rights: following that, the income from the transferring movables, investment project, the right to participate in investment project, the right to probe, exploit and process the mineral shall be accounted independently to declarate for enterprise income tax with the tax rate is 22% (20% was applied from 01/06/2016), shall not get preferential treatment of  income tax (except the income that enterprise implement the investment project on social house in order to sell or lease, was applied enterprise income tax rate 10% following the point d clause 3 Article 19 of Circular 78/2014/TT-BTC and Article 2 of Circular 96/2015/TT-BTC).

And you have to export the invoice for such 2 plots of land to pay the enterprise income tax following the rules of law.

Thirdly, the conditions to transfer the investment project

Article 45 of Law on Investment 2014 prescribes clearly about the conditions to transfer the investment project.

The investor transferring the investment project hand in a project dossier to the registry office consists of:

  • A written request for adjustment to the Certificate of investment registration;
  • A report on project execution up to the date of project adjustment;
  • Transfer investment project contract or equivalent paper;
  • A copy of the ID card or passport (if the investor is an individual); a copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization); a copy of the Certificate of investment registration or the paper of decision on investment policies (if any);
  • A copy of the business cooperation contract (if the project is executed under a business cooperation contract); a copy of one of these following recipient investor’s documents: a financial report for the last 02 years, the commitment to support about finance from holding company, the guarantee about financial ability of investor, evidence to prove the financial ability of investor.

Please do not hesitate to contact us for more information to be supported and consulted:


Address: no. 280C12 Luong Dinh Cua Street, An Phu Ward, Thu Duc District , Ho Chi Minh City

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