VCI Legal – December 8, 2025

On 6 November 2025, the Government promulgated Decree No. 291/2025/ND-CP (“Decree 291”), which amends Decree No. 103/2024/ND-CP dated 30 July 2024 on land use fees and land rentals (“Decree 103”) and Decree No. 104/2024/ND-CP dated 31 July 2024 on the land development fund. Decree 291 took effect immediately on the date of issuance and introduces several notable revisions as follows.

1. Additional amounts payable

Pursuant to Article 257.2(d) of the Land Law 2024, land users who obtained a land allocation or land lease decision before the Land Law 2024 became effective (i.e., prior to 1 August 2024), but for whom land prices had not yet been determined, must pay an additional amount for the period during which the land use fee or rental was not calculated.

Decree 291 provides that this additional amount is set at 3.6% per year of the payable land use fee or rental (replacing the 5.4% per year rate previously stipulated under Decree 103). These additional payments are classified as other State budget revenues.

2. New principle governing land incentives

Decree 291 introduces a new rule regarding the application of land use fee or rental exemptions or reductions based on separable and corresponding geographical areas.

Where a land parcel eligible for incentives spans multiple geographical areas, the exemption or reduction shall be determined proportionately based on the area located within each respective geographical area.

3. Refund of exempted or reduced land use fees or rentals

Articles 17.6 and 38.9 of Decree 103 require land users to refund the exempted or reduced land use fee or rental to the State budget if they no longer meet the conditions for incentives or if the land is used for purposes inconsistent with the land allocation decision, land lease decision, or contract—provided that the case does not fall under land recovery.

Decree 291 revises these provisions by:

· clarifying the method for calculating the fee or rental amount subject to recovery; and

· specifying the procedures for determining and recovering the exempted or reduced land use fees or rentals.

4. Land clearance and compensation costs

Under Decree 291, where an investor has advanced funds for land compensation, support, and resettlement in accordance with an approved plan, and the project involves multiple land use forms (e.g., land allocation without fee, land allocation with fee, and land lease), the following mechanism applies:

· the advanced amount shall first be deducted from the total payable land use fees and lump-sum land rentals;

· any remaining, undeducted amount shall then be offset against annual land rentals (including rentals for underground construction areas, if applicable); and

· amounts that cannot be deducted shall be recorded as part of the project’s investment costs

About VCI Legal:

VCI Legal is an award-winning business law firm in Vietnam with a wide range of legal and corporate services, among other things, corporate, banking & finance, tax, labor & HR, real estate and dispute resolution with special focus on international investment disputes, We also offer our specialized type of service called “In-House Counsel Service” with the aim of assisting our clients in dealing with all types of internal and external issues arising from their day-to-day operations and business activities. With our offices in both Hanoi and Ho Chi Minh City, we have a tremendous depth of experience in providing well-reasoned and comprehensive legal advice to not only multinationals and Fortune 500 companies, but also small and medium enterprises.

Our professional team comprises one of the leading law firms in Vietnam with service quality highly recommended and acknowledged by international legal service reviewers such as: The Legal 500, AsiaLaw Profiles, IFLR, KPMG’s Tax Directors’ Handbook, Acquisition International, ACQ Global, Global Law Experts, Finance Monthly, and Chambers & Partners.

For many years, VCI Legal has been ranked among the top law firms in Vietnam for corporate, finance, insurance, taxation, employment, intellectual property and investment. With a “Can Do Attitude” combined with a “Know How” capacity, our firm is big enough to provide comprehensive legal support for any in-house legal matters, yet small enough to care about each of our clients. We undertake each engagement with the mindset of a long-term relationship, with the will to give whatever it takes to understand and fulfill your needs.

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