Decree No. 59/2014/ND-CP dated June 16, 2014, on amendments to the Decree No. 69/2008/ND-CP on incentive policies on private sector involvement in education, vocational training, health care, culture, sports and environment

DECREE

ON AMENDMENTS TO THE DECREE NO. 69/2008/ND-CP DATED MAY 30, 2008 OF THE GOVERNMENT ON INCENTIVE POLICIES ON PRIVATE SECTOR INVOLVEMENT IN EDUCATION, VOCATIONAL TRAINING, HEALTH CARE, CULTURE, SPORTS AND ENVIRONMENT

Pursuant to the Law on Government organization dated December 25, 2001;

Pursuant to the Law on Investment dated November 29, 2005;

Pursuant to the Law on Tax administration dated November 29, 2006; the Law on the amendments to the Law on Tax administration dated November 20, 2012;

Pursuant to the Law on land dated November 29, 2013;

At the request of the Minister of Finance,

The Government issues a Decree on amendments to the Decree No. 69/2008/ND-CP dated May 30, 2008 of the Government on incentive policies on private sector involvement (PSI) in education, vocational training, health care, culture, sports and environment.

Article 1. Amendments to the Decree No. 69/2008/ND-CP dated May 30, 2008 of the Government

1. The Clause 1 of Article 1 shall be amended as follows:

“1. Scope of the Decree

The fields that need PSI include: education and training, vocational training, health care, culture, sports, environment, and judicial expertise.”

2. The Article 5 shall be amended as follows:

“Article 5. Lease and construction of facilities

1. Ministries or agencies in charge of private sector involvement (hereinafter referred to as PSI authorities) and the People’s Committee of central-affiliated cities and provinces (hereinafter referred to as the provinces) shall invest in infrastructure, construct a part of or all of PSI works, or use the existing housing or infrastructure in order to lease them out to private sector investors (hereinafter referred to as investors) for limited term according to the government budget and policies on private sector involvement.

2. In case the government budget is not allocated or not sufficiently allocated to invest in infrastructure or PSI works, PSI authorities, People’s Committee of the province shall reach an agreement with investors on the advance of the rents of infrastructure or buildings related to private sector involvement in order to invest in construction.

The advance rents shall be converted into number of years or months in which the rents for infrastructure or PSI works are paid.

3. The rents for infrastructure and a part of or all of PSI works shall be decided by PSI authorities and the People’s Committee of the province after reaching an agreement with the investors under following rule: The rent shall be determined conformably with the rent on the market with due account taken of the incentive policies of the local government on the date on which the lease contract is concluded provided that the cost covered the leased property is included.

4. The investor which has paid the total rent or has paid an advance of the rent for infrastructure and May shall have rights to:

a) Keep investing in completion of the project for private sector involvement to carry on business as prescribed in regulations of law if the investor rents infrastructure or a part of PSI works;

b) Include the rent for infrastructure and PSI works (which is paid or paid an advance) in the project cost as prescribed;

c) Include the additional investment in the investment capital of the project and use the additional investment property as collateral for a loan.

5. If PSI authorities and the People’s Committee of the province wish to contribute capital, or join in joint venture in order to establish an investor, they may conclude an agreement with the investor on use of the rents for infrastructure and PSI works or the value of assets on land.

6. When the lease term or capital contribution expires or the lease or capital contribution as prescribed in Clause 1 and Clause 4 of this Article terminates ahead of the deadline as prescribed in regulations of law, the investor shall transfer the whole infrastructure and building on land to the State.

7. Procedures for the lease of infrastructure and PSI works, use of the rent for capital contribution to carry out the project for private sector involvement shall comply with regulations of this Decree and law on the management and use of state-owned property.

8. The People’s Committee of the province must enable the investors to invest in construction of schools, hospitals, recreational centers, sports centers, museums, libraries, culture club, theaters, cinemas or other PSI works according to the planning approved by the competent authorities.

9. The Ministry of Finance shall provide guidance on this Article.”

3. The Article 6 shall be amended as follows:

“Article 6. Land lease

1. An investor is eligible to be leased a piece of land which is completed the land clearance subject to land rents over entire lease term by the State to construct PSI works except cases prescribed in Clause 2 of this Article.

The compensation for land clearance to construct PSI works shall be provided as prescribed in Clause 5 of this Article.

2. With regard to the investor in the urban areas, the People’s Committee of the province shall issue regulations on exemption from or reduction in land rents in every area or sector according to the actual condition of the local government. The maximum incentive is the exemption of land rents over the entire lease term of the project; the minimum incentive is the incentive prescribed in regulations on law on land and law on investment.

At least 06 months from the effective date of this Decree, the People’s Committee of the province shall issue and announce the regulations on exemption or reduction in aforesaid land rents with the consent of the Standing of the People’s Council of province according to the sector and administrative divisions receiving preferential treatment for PSI.

Every 03 years, the People’s Committee of the province may amend the List of PSI fields and administrative divisions receiving PSI preferential treatment in the local governments.

3. In case an investor is transferred a piece of land to carry out the investment project for PSI works without any change in land use purposes in accordance with land-use planning, the investor is eligible to be leased the piece of land by the State as prescribed in law on land and receive preferential treatment for exemption or reduction of land rents as prescribed in Clause 1 and Clause 2 of this Article, in particular:

a) In case the investor is exempt from the land rents over entire lease term of the project, the amount of money paid for the piece of land shall be concluded in the investment cost of the project;

b) In case the investor is only exempt from the land rents for a year, the amount of money paid for the piece of land shall be considered as the advance of land rents which is paid to the State by the investor as prescribed in law on land. This amount of money shall be determined according to the use purpose of the transferred land on the date on which the permission for change in land use purposes is made by the regulatory agencies provided that it does not exceed the compensation equivalent to the compensation paid by the State when the land is withdrawn as prescribed in law on land.

c) The amount of money paid for the piece of land by the investors as prescribed in Point b of this Clause shall be determined according to the following rules:

- In case the land prices subject to the land rents are determined according to coefficient-based method, the price of the type of transferred land shall be also determined according to the coefficient-based method on the date on which the permission for change in land use purposes is made;

- In case the land prices subject to the land rents are determined according to direct comparison method, subtraction method, income-based method, or surplus-based method, the price of the type of transferred land shall be also determined according that method on the date on which the permission for change in land use purposes is made.

In case the land prices subject to the land rents are determined according to the coefficient-based method, or direct comparison method, subtraction method, income-based method, or surplus-based method as prescribed in the Decree of the Government on collection of land rents or water surface rents.

4. The land rents prescribed in Clause 1 and Clause 2 of this Article shall be exempt or reduced as follows:

a) The investor has PSI project(s) approved by the competent authorities as prescribed and eligible to rent land from the State to carry out the project and the approved project satisfying requirements pertaining to types, scope, and criteria regulated by the Prime Minister shall benefit from incentive policies on land as prescribed in this Decree from the date on which the permission for land lease or change in land use purposes is issued by the competent authority.

b) After the project is completed and put into operation, if the entity investor fails to meet requirements pertaining to types, scope or criteria as prescribed in the Decision of the Prime Minister according to the inspection of the competent authority, the investor must pay land rents which are exempt or reduced according to the policies and land prices on the date on which they receive preferential treatment for land as prescribed in Point a of this Clause and late payment interest subject to the land rents exempt or reduced as prescribed in law on tax administration;

c) According to the actual condition of the local government and types of the PSI project, the People’s Committee of the province shall assign the tax authority to take charge and cooperate with the PSI authorities and relevant authorities to inspect and determine the satisfaction of requirements pertaining to types, scope, or criteria as prescribed in the Decision of the Prime Minister taken by the investor on the date on which the completed project is put into operation;

d) The inspection and determination as prescribed in Point b and Point c of this Clause shall be carried out as follows:

- After the completed project is put into operation, within the period prescribed in the List of types, criteria, or scope of the fields that need PSI decided by the Prime Minister, the investor must notify the tax authority of that the operation of the completed project and send it relevant documents or materials in order for tax authority to consider making the official decision on exemption or reduction in land rents;

- At least 30 days from the date on which the notification of the investor is received, the tax authority shall cooperate with relevant authorities to implement the regulations of Point c of this Clause. In case the investor fails to meet requirements pertaining to criteria or scope decided by the Prime Minister, the tax authority must request the People’s Committee of the province for handling as prescribed in Point b of this Clause.

5. Provision of compensation for land clearance:

a) The People’s Committee of the province shall provide compensation for land clearance and allocate the land after finishing the land clearance in order for the investors to rent for PSI project according to the local budget;

b) In case the People’s Committee of the province fails to provide compensation for land clearance and allocate the land after land clearance in order for the investors to rent for PSI project because of unbalanced local budget, the compensation for land clearance shall be provided as follows:

- In case the investor is eligible for exemption from land rents over entire lease term, it must make a refund of expenditure on compensation for land clearance according to the plan approved by the competent authority and this expenditure shall be included in the investment capital of the project;

- In case the investor is eligible for a part of exemption or reduction in land rents or is not eligible for exemption or reduction in land rents, the entity must make a refund of expenditure on compensation for land clearance according to the plan approved by the competent authority and this expenditure shall be subtracted from the payable land rents (if the land rents are paid over the entire lease term) or converted into number of years or months in which the land rents are paid (if the land rents are paid annually) as prescribed in law on collection of land rents and water face rents provided that they do not exceed the payable land rents or deadline for the payable land rents of the project. The remaining amount of money (if any) shall be included in the investment capital of the project.

c) In case the investor which is eligible for land lease by the State voluntarily pays the advance of compensation for land clearance to the State in order to enhance the progress of land clearance, the compensation for land clearance shall be provided as follows:

- In case the investor is eligible for exemption from land rents over the entire lease term, the expenditures on compensation for land clearance according to the plan approved by the competent authority shall be included in the investment capital of the project;

- In case the investor is eligible for a part of exemption or reduction in land rents or is not eligible for exemption or reduction in land rents, the expenditures on compensation for land clearance shall be subtracted from the payable land rents (if the land rents are paid over the entire lease term) according to the plan approved by the competent authority or converted into number of years or months in which the land rents are paid (if the land rents are paid annually) as prescribed in law on collection of land rents and water face rents provided that they do not exceed the payable land rents or deadline for the payable land rents of the project. The remaining amount of money (if any) shall be included in the investment capital of the project.

d) The compensation for land clearance prescribed in Point b and Point c of this Clause includes compensation, support, and resettlement and expenditures on organization of compensation for land clearance.

6. In case the investor is leased a piece of land subject to lump-sum payment over the entire lease term and it is exempt from the land rents over the entire period of project or exempt from the land rents for a number of years as prescribed in Clause 1 and Clause 2 of this Article but it wishes to pay the land rents (not applicable to incentive policy), the payable land rents shall be determined according to policy and land prices on the date on which the competent authority permits the payment. The land rents shall be subject to land use term which is the remaining term of the project of investment. The investor shall have rights related to the piece of leased land for the remaining land use term as prescribed in law on land in proportion to the type of land use.

In this case, the compensation for land clearance paid by the investor shall be subtracted from the payable land rents according to the plan approved by the competent authority, provided that it does not exceed the payable land rents; it may include the value of the piece of lease land in the value of assets of the project of investment and it shall have rights and obligations similarly to the economic organization which is allocated land subject to land levies for the remaining land use term as prescribed in law on land.

7. In case there are two investors or more who register one place where the PSI project is carried out, the investor who satisfy requirements pertaining to scope, quality, effect the best as prescribed in law on tender and law on land.

8. The investor using the piece of land lawfully shall be granted Certificate of land use rights, ownership of land and property on land; shall be protected their lawful rights to use land, ownership of land and property on land as prescribed. Procedures for land lease, issuance of the Certificate shall comply with regulations of law on land.

9. The investor must use land for proper purposes, conform to the planning and comply with regulations of law on land. When the land lease term expires, if the investor does not wish to keep using or it is dissolved or it has moved to another place, it is required to return the land to the State; if it uses the piece of land for improper purposes, its piece of land shall be withdrawn.

10. The inclusion of the piece of leased land of investor in the value of assets of the project of investment:

a) In case the investor is leased a piece of land subject to lump-sum payment over the entire lease term from the State and it is exempt from the land rents over the entire period of project or the piece of leased land subject to annual payment, the piece of land shall not be included in the value of assets of project of investment and it is not exchanged, transferred, given, or leased; the piece of leased land is not also mortgaged, guaranteed, or contributed as capital;

b) In case the investor is leased a piece of land subject to lump-sum payment over the entire lease term or exempt from the land rents for a number of years, the value of the piece of leased land equivalent to the payable land rents shall be included in the value of assets of project of investment. The investor may only transfer, give, or lease the piece of leased land; mortgage, guarantee, or contribute the piece of leased land in the proportion to the payable land rents.

11. Transfer of project related private sector involvement:

a) During carrying out the project, if the investor fails to keep carrying out the project on the piece of leased land by the State due to objective reasons, it may transfer this project as prescribed in law on trading in real estate if the People’s Committee of the province approves the policies on transfer of project in writing. The transferee of the project must keep carrying out the PSI project for the proper objectives and land purposes;

b) The value of the transferred project shall be dealt by the parties, including:

- The property on land if the land of project is exempt from total land rents or the land is leased subject to the annual payment;

- The property on land and the total value of the piece of land if the total land rents (without any exemption or reduction) are required with regard to the land subject to lump-sum payment over entire lease term;

- The property and a portion of value of the piece of land in proportion to the land rents paid to government budget with regard to the land subject to reduction in land rents.

c) The procedures for the land lease between the old investor and the new investor when transferring the PSI project shall comply with law on land.

12. With regard to the land which is lawfully transferred from organizations, households or individuals without any change in land use purposes as prescribed in Clause 2 of this Article, the investor may include the value of the piece of land in the value of assets of the project of investment and the capital recovery costs as prescribed in regulations of law.

13. The Ministry of Finance shall provide guidance on this Article.”

4. The Clause 9 Article 18 shall be amended as follows:

“Article 18. Responsibility of the People’s Committee of the province

9. Responsibility for inspection and observation

Direct Department of Taxation to take charge and cooperate with the Services of Planning and Investment, Services of Finance, the Service of Natural Resources and Environment and relevant Services in charge of PSI in observation of the implementation of PSI projects according to the requirements approved by the competent authority. If the entities related to private sector involvement fail to meet requirements approved by the competent authority, the People’s Committee of the province shall consider deciding to remove incentives as prescribed in regulations of law".

Article 2. Transitional provisions

1. In case the investors use residential land, urban area land subject to the List of types, criteria, scope and standards decided by the Prime Minister, but the People’s Committee of the province has not promulgated regulations on exemption and reduction of land levies or land rents as prescribed in Clause 1 Article 6 of the Decree No. 69/2008/ND-CP, the investors shall be exempt from or reduced in the land rents as prescribed in this Decree from the effective date of the Decree No. 69/2008/ND-CP.

2. If the investors are allocated land subject to exemption from land levies or reduction in land levies and they have paid the remaining land rents as prescribed in law on encouragement to private PSI before the effective date of this Decree, they may keep using the land for the remaining land use term but it they are not required to rent the piece of land. If they change to rent the piece of land, they shall be exempt from the land rents within the term in which the piece of land is allocated.

3. In case investors are allocated or leased pieces of land subject to land clearance and they may benefit from incentive policies as prescribed in the Decree No. 69/2008/ND-CP from the effective date of the Decree No. 69/2008/ND-CP to the preceding date of August 1, 2014, and the State does not request to pay the compensation for land clearance, they are not required to make a refund of this compensation to the State.

4. The Ministry of Finance shall provide guidance on this Article.

Article 3. Implementation

1. This Decree shall take effect from August 1, 2014.

2. The Clause 2 of Article 4 and Clause 3 of Article 18 of the Decree No. 69/2008/ND-CP shall be annulled from May 30, 2008 of the Government.

3. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, the President of the People’s Committee of central-affiliated cities and provinces shall be responsible for implementation of this Decree./.