The General Department of Taxation has just issued Official Letter No. 484/TCT-QLN on February 6, 2024, in response to the Tax Department of Kien Giang Province regarding the issue of outstanding land use tax for Phu Cuong Kien Giang Investment Joint Stock Company (referred to as Phu Cuong Kien Giang Company).
According to the General Department of Taxation, based on Article 83 of the Tax Management Law dated June 13, 2019, which stipulates 5 cases eligible for tax debt write-off, the case of Phu Cuong Kien Giang Company is not one of them.
A corner of the Phu Cuong New Urban Area project in Rach Gia City, Kien Giang Province
The Official Letter from the General Department of Taxation also states: “Based on the provisions (in Clause 4 of Article 18; Point c, Clause 7 of Article 11; Point c.4 of Clause 11 of Article 13 of Decree 126/2020/ND-CP dated October 19, 2020 of the Government and Point b of Clause 1 and Clause 7 of Article 59 of the Tax Management Law), the Tax Department of Kien Giang Province issued Announcement No. 1340 dated July 3, 2023, but it was beyond the prescribed period (within 90 days). Phu Cuong Kien Giang Company has not paid land use fees according to the announcement of the Tax Department of Kien Giang Province to the state budget, so the company must pay late according to regulations.”
Phu Cuong Kien Giang Company is the implementing unit of the residential project BT31 villa (belonging to Area I, Phu Cuong New Urban Area, Rach Gia City, Kien Giang Province) according to the approved decision by Kien Giang Provincial People’s Committee on July 22, 2021.
On July 3, 2023, the Tax Department of Kien Giang Province notified Phu Cuong Kien Giang Company to pay the land use transfer fee for the above-mentioned project, which is over VND 46 billion, with a deadline of 90 days. The company believes that the amount of land use transfer tax is too high and the calculation price is not appropriate.
Subsequently, the company sent a proposal to Kien Giang Provincial People’s Committee and related departments and agencies to consider reassessing the conversion price for land use purposes.
On December 19, 2023, the Party Executive Committee of Kien Giang Provincial People’s Committee has made conclusions and assigned the Department of Finance of the province to take charge, hire a specialized consulting unit to independently determine the land price for survey and assessment. The Tax Department of the province is requested to consider, according to its jurisdiction, the suspension of financial obligations for Phu Cuong Kien Giang Company according to legal regulations.
On January 8, 2024, the Tax Department of Kien Giang Province issued Official Letter No. 30 to the General Department of Taxation requesting guidance on the tax debt write-off for the case of Phu Cuong Kien Giang Company and was answered in writing by the General Department of Taxation as mentioned above.
As reported, on February 23, 2024, the Inspectorate of Kien Giang province has concluded the inspection on planning and implementation of construction planning for the Department of Construction and district-level People’s Committees in Kien Giang province.
Accordingly, the inspection concluded Phu Cuong Kien Giang Company has adjusted the partial planning for land use at land plot BT31 in Area I, Phu Cuong New Urban Area. The company has gone through the procedures for land use conversion and has announced to pay the land use fee.
However, it has been overdue, the company has not paid the land use fee in the amount of over VND 46 billion, which is in violation of Article 4 of Article 18 of Decree No. 126 dated October 19, 2020 of the government detailing a number of articles of the Tax Management Law.
Also according to the inspection conclusion, Phu Cuong Kien Giang Company carried out the amendment of the partial planning of commercial and service land plots in the center of Phan Thi Rang roundabout (Phu Cuong New Urban Area) for the purpose of land use change. However, the company has not gone through the procedures to request the conversion of land use purposes.
