Land that has been assigned a value shall be subject to land value increment tax based on the total amount of land value increment at the time of transfer of land title. Land transferred by succession, public land sold or donated by all levels of government according to law, and private land transferred to any level of government by gift are exempted from land value increment tax.
Under the Land Tax Act, the taxpayers of LVIT are as follows:
1. The original landowner for land transferred with compensation; and
2. The claimer of land title for land transferred without compensation;
3. The Dien Right assignor for a Dien Right has been established on the Land;
In the transfer of land title, if the LVIT due is not paid by the taxpayer within the due period, the new title holder of the land shall pay the past due LVIT.
The tax base of the LVIT is called “Total Increment Amount of Land Value”, which is calculated as follows:
Total Increment Amount of Land Value = declared current value for transfer - the original decreed value or the assessed current value at the previous transfer × consumer price index/100 - (land improvement cost + construction benefit fee + land rezoning fee + the claimed current value of donated land)
Land value tax is levied at either the regular progressive rates or the special privileged rates. The regular progressive rates range from 20% to 40%. If the area of the land for self-use residence sold by the the land owner complies with the related regulations, the special privileged tax of 10% is applicable.
The provisions for reductions and exemptions for LVIT are as follows:
1. Land transferred due to inheritance;
2. Land acquired by the government;
3. 40% reduction on land being transferred for the first time after any rezoning, subject to relevant regulations.
If, after a land owner has sold land that was used for owner-operated factory and within two years following the completion of the transfer registration, the assessedt value for transfer of the land is higher than the balance of the original land value excluding LVIT, the seller (previous landowner) may apply to the tax office for refund of the portion of LVIT to make up the difference to be paid for the sale of land. If, on the day following the receipt of compensation for land reacquired by the government and the land was used for owner-operated factory, the assessed value of the land is higher than the balance of the original land value at time of transaction excluding LVIT, the previous landowner may apply to the tax
office for refund of the portion of LVIT to make up the difference to be paid for the reacquisition of the land.
When the land owner sells his land or has his land requisitioned by the government within 2 years after acquiring another parcel of land, he is also entitled to apply for an LVIT refund. However, if the land sold or requisitioned was rented or used for business purposes in the last full year before the transfer, the land would not qualify for the refund.
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