Unit：Land Value Increment Tax

Land that has been assigned a land 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. Yet, the following transfers of land title are exempted from land value increment tax:

1. Public land sold or donated by all levels of government according to law, and private land transferred to any level of government by gift is exempted from land value increment tax.
2. Land transferred by succession.
3. Land donated for the purpose of establishing social welfare enterprises or private school according to law is exempted from land value increment tax, provided the donation meets the following requirements:
1. The donee is a non-profit juristic person (“NPJP”);
2. Its statutes of incorporation stipulates that upon dissolution, the remaining property of the entity will be transferred to the local government;
3. The donor does not receive any interest from the donated land in any manner.
4. Land expropriated by the government
5. Private land expropriated by the government, while the owner of private land subject to expropriation voluntarily sells the land to the relevant government agency at the current assessed land value.
6. Transfer of land expropriated under zone or section expropriation.
7. Land reserved for public facilities pursuant to the Urban Planning Law and transferred before expropriation, shall be exempted. The provisions of the preceding paragraph apply to the transfer of land that has been designated as reserved land for public facilities under the Urban Planning Law, but not yet been expropriated. But if the aforesaid land is transferred again after it has been changed to non-reserved land, the total incremental value used to assess the land value increment tax payable for the transfer shall be based on the original decreed land value of the land prior to its first tax- exemption status or the previous transfer value.

In accordance with Article 28 of the Land Value Law, land bestowed may apply for non-taxable status of land value increment tax since the estate tax has been applied.

1. a.The rate applied to primary residential land is 10% of the land value increment.
2. b.For rate applied to general land, see the list below: (Calculation Formula for Land Value Increment Tax)

Different classes for tax Calculation Formula First Class Tax payable = Total amount of land value increment (less than 100% of the original decreed land value or the previous transfer value pursuant to consumer price index)× tax rate (20%) Second Class Tax Payable = Total amount of land value increment (more than 100% but less than 200% of the original decreed land value or previous transfer pursuant to consumer price index) ×【tax rate (30%)－[(30%－20%)×tax reduction rate]】－Cumulative Difference (original decreed land value or current assessed value of last transfer as adjusted by the consumer price index×A)
Note:
For land that has been owned for a period of less than 20 years, the reduction of land value increment tax shall not be applied at all. A=0.1 For land that has been owned for a period of over 20 years, the tax reduction rate is 20%. A=0.08 For land that has been owned for a period of over 30 years, the tax reduction rate is 30%. A=0.07 For land that has been owned for a period of over 40 years, the tax reduction rate is 40%. A=0.06 Third Class Tax Payable = Total amount of land value increment (more 200% of the original decreed land value or previous transfer value pursuant to consumer price index) ×【tax rate (40%)－ [(40%－20%)× tax reduction rate]】－Cumulative Difference (original decreed value or current assessed value of last transfer as adjusted by the consumer price index×B)
Note:
For land that has been owned for a period of less than 20 years, the reduction of land value increment tax shall not be applied at all. B=0.3 For land that has been owned for a period of over 20 years, the tax reduction rate is 20%. B=0.24 For land that has been owned for a period of over 30 years, the tax reduction rate is 30%. B=0.21 For land that has been owned for a period of over 40 years, the tax reduction rate is 40%. B=0.18 (Articles 33 and 34 of Land Value Law)

In case of land title transfer or creation of Dien right, the right holder and obligor shall, within thirty days after the signing of contract, jointly file in the Application for Current Assessed Land Value Declaration with the competent tax authority (forms provided by taxation agencies) and submit a photocopy of the transfer contract and other related documents. (Article 49 of Land Value Law)

Taxpayers of land value increment tax shall be: the original title owner for land transferred with consideration or compensation; the acquired title owner for land transferred without consideration or compensation; the Dien maker for land with Dien right created. The term “transfer with consideration or compensation” depicted in the preceding paragraph shall mean transfer by sale, exchange, government procurement or expropriation ad valorem. The term “transfer without consideration or compensation” shall mean transfer by succession or gift. (Article 5 of Land Value Law)