According to Ministry of Finance Circular 151/2010/TT-BTC dated September 27, 2010, which refers to taxes and other state budget-related financial obligations subject to land development funds, land development funds must not pay an enterprise income tax if they earn more than they spend when implementing duties stated in section 1 of Article 34, Decree 69/2009/ND-CP and section 1 of Article 11 of the sample regulation on land development fund management and use. They pay a 25 percent enterprise income tax for income from other activities.
In cases where a land development fund earns income from taxable activities but it can only define revenues and cannot define profit and expenses, that fund pays an enterprise income tax that is equal to five percent of its revenue (referring to service revenue), one percent of its revenue (referring to revenue in trade of goods) and two percent of its revenue (referring to revenue from other activities).
Capital advance and assistance activities, which are implemented by a land development fund in accordance with section 1 of Article 34, Decree 69/2009/ND-CP and section 1 of Article 11 of the sample regulation on land development fund management and use, are not subject to the value added tax (VAT).
In cases where a provincial people's committee authorizes a land development fund to manage the fund or authorizes another financial fund of the local region to manage the fund, or a land development fund is authorized to manage and use capital from individuals and organizations inside and outside the country, authorization fees (excluding capital lending-related authorization fees) are subject to VAT.
Circular 151/2010/TT-BTC takes effect 45 days after the date of signing./.