Registration Fee Exemption for Annually-Paid Leased Land Continues After Company Merger
RegHub explainer by New MarketerLast updated:
Based on:10/2022/ND-CP - Ministry of Finance
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The Ministry of Finance (via Hai Phong City Tax Department) responded to a business inquiry about registration fee (lệ phí trước bạ) exemption after a corporate merger. The company had been leasing land from the State under an annual payment arrangement and had been granted a registration fee exemption under Clause 7, Article 9 of Decree 140/2016/ND-CP, with a Land Use Right Certificate (LURC) issued in 2020. The company asked whether, after merging into another entity, the surviving entity would continue to enjoy the registration fee exemption when registering the change of land user name on the LURC due to the merger. Under Clause 7, Article 10 of Decree No. 10/2022/ND-CP dated January 15, 2022 on registration fees, land leased from the State under an annual rental payment method, or leased from organizations or individuals that already hold lawful land use rights, is exempt from registration fees. Based on this, the tax authority confirmed that when the surviving entity after a merger carries out the procedure to register the change and update the land user's name on the LURC, if the land use method remains an annually-paid State land lease, it continues to qualify for the registration fee exemption under Clause 7, Article 10 of Decree 10/2022/ND-CP. This clarification is useful for businesses undergoing restructuring or mergers that hold land use rights under annual-payment State leases.
Question
To the Ministry of Finance. My company was leased land by the State under an annual payment arrangement and was granted a registration fee exemption under Clause 7, Article 9 of Decree 140/2016/ND-CP dated October 10, 2016 (the Land Use Right Certificate was issued in 2020). If my company merges into another organization, will the surviving entity continue to receive the registration fee exemption for the annually-paid State-leased land area when carrying out the procedure to register the change and update the land user's name on the Land Use Right Certificate due to the merger?
Answer
Pursuant to Clause 7, Article 10 of Decree No. 10/2022/ND-CP dated January 15, 2022 of the Government on registration fees:
"Article 10. Registration fee exemptions
...
- Land leased from the State under the annual land rental payment method, or leased from organizations or individuals that already hold lawful land use rights."
In the case where the reader's company was leased land by the State under the annual rental payment method, and subsequently merged into another organization, when the surviving entity carries out the procedure to register the change and update the land user's name on the Land Use Right Certificate, if the land use method remains an annually-paid State land lease, it continues to be eligible for the registration fee exemption under Clause 7, Article 10 of Government Decree No. 10/2022/ND-CP dated January 15, 2022.
Hai Phong City Tax Department provides this response for the reference of reader Nguyen Hai Dang.