The Tax Department Responds: Citizens Still Have to Pay Land-Use Taxes Even After Withdrawing Applications

New Article: “High Land-Use Taxes Force Citizens to Withdraw Applications but Financial Obligations Remain”

Pressure from Land-Use Financial Obligations

Recently, in many localities, a wave of cases has occurred where citizens submitted applications for land-use rights certificates or for land-use conversion, but later withdrew them. The main reason stems from the fact that once the tax authorities issue notices of financial obligations, the required land-use fees are excessively high, far beyond people’s ability to pay.

A typical case is that of Mrs. Trần Thị Hải Yến (Lâm Đồng Province). In March 2024, Mrs. Yến submitted an application for land-use rights. By June 2024, she received a notice requiring her to pay a very high land-use fee. Unable to manage, she filed to withdraw her application at the Phan Thiết Branch of the Land Registration Office. Although the office approved her withdrawal, the tax obligation remained on record.

In March 2025, she submitted a request to the Phan Thiết - Hàm Thuận Inter-District Tax Office (now Tax Sub-Office 6, Lâm Đồng Province) to cancel the financial obligation. In May 2025, the office rejected her request. This meant that despite withdrawing her application, the tax liability still stood, and late payment penalties would also apply if the deadline was exceeded.

Tax Authorities’ Explanation

According to representatives of the General Department of Taxation (Ministry of Finance), based on the Land Law, Joint Circular No. 88/2016/TTLT-BTC-BTNMT, and Decree No. 126/2020/NĐ-CP, financial obligations are determined based on the information transferred from the Land Registration Office (or relevant land management agencies).

If an application is withdrawn, the land and environment authorities must issue a formal request to revoke or adjust the transferred information form. Only then will the tax authority have grounds to amend or cancel the tax obligation notice. Without this step, the obligation remains in force.

In Mrs. Yến’s case, the General Department of Taxation affirmed that it would request the Lâm Đồng Tax Department to coordinate with land management agencies for review and settlement under its authority.

Reform of Administrative Procedures on Land

From August 1, 2024, under Clause 2, Article 21 of Decree 103/2024/NĐ-CP, the land administration process was restructured:

• Tax authorities issue financial obligations strictly based on transferred information forms from land registration offices or land management agencies.

• If there are changes, withdrawals, or cancellations, the land office is responsible for notifying tax authorities.

• Tax offices will only adjust tax notices once there is a clear legal basis provided by the land office.

Currently, data exchange between the Tax Department and the Ministry of Natural Resources and Environment (now the Ministry of Agriculture and Environment after restructuring) has been digitized. Citizens now submit and withdraw applications at the Agriculture - Environment agency under the one-stop service mechanism.

Going forward, the Tax Department will work with the National Data Center (C12) and the Ministry of Agriculture and Environment to redesign the entire procedure on the National Public Service Portal, ensuring transparency and eliminating situations of “hanging debts” as seen today.

Root Causes of the Problem

Analysis shows that the issue arises from three main causes:

1. Excessive land-use fees: especially when converting from agricultural land to residential land, the cost difference is significant, discouraging both citizens and businesses.

2. Lack of synchronization between agencies: land registration offices may approve application withdrawal, but there is no immediate mechanism to update tax authorities.

3. Delayed tax adjustment procedures: tax notices are only revoked when formally requested by land agencies, leading to prolonged “virtual debts.”

The fact that citizens still owe taxes despite withdrawing applications reveals shortcomings in the land administration and tax procedures. Without timely reforms, many households will continue to face unreasonable “hanging debts” that create unnecessary financial burdens.

The reforms under Decree 103/2024/NĐ-CP and the upcoming integration into the National Public Service Portal are expected to resolve these problems, ensuring greater fairness and transparency for all citizens.