Uni 26-08-2021 - The policy on lease of infrastructure associated with land use right

Official letter 6898/CTVPH-TTHT about tax policy for infrastructure rentals attached to land use rights is as follows:

In case the Company leases land to construct a factory on the leased land area, then:

For the area of land the Company built the factory, completed, put into production and business activities and generated revenue, the Company may gradually allocate the land rent value to production operating expenses. doing business according to the land use permit period stated in the land use right certificate.
For the land area the Company has not yet built or is building a factory, the land rent value is included in the historical cost of the fixed asset up to the time of putting that asset into the ready-to-use state and is deducted. depreciation of fixed assets according to regulations. After the factory is put into use, the Company is gradually allocated the value of land rent for the remaining years to production and business expenses according to the above guidance.