Scenario: two projects are both advised they “get 15 years of land-rent exemption”: an electronics project in an incentivised sector in a specially disadvantaged mountainous province, and an ordinary garment project in the same province. Only one of them truly reaches the 15-year tier. The 11 and 15-year exemptions are the two highest rungs of the land incentive ladder — and the two most misunderstood. This article separates the specific conditions of each tier under clause 3, Article 39 of Decree 103/2024/ND-CP.
The condition map: the two tiers are a combination problem
The post-basic-construction exemption system in clause 3, Article 39 of Decree 103/2024/ND-CP is built as a two-dimensional matrix: the sector dimension has three grades (no incentive, incentivised, specially incentivised) and the area dimension has three grades (ordinary, disadvantaged, specially disadvantaged). The ladder’s lower tiers (3 years for a purely incentivised sector or relocating facilities; 7 years for a purely disadvantaged area) are covered in the land-rent exemption framework article. The matrix’s top two rungs: the 11-year tier at point c comprises three cells — specially disadvantaged areas with any sector, specially incentivised sectors in any area, and the cross cell of an incentivised sector in a disadvantaged area; the 15-year tier at point d comprises the two highest cross cells — incentivised sectors in specially disadvantaged areas, and specially incentivised sectors in disadvantaged areas. Reading this matrix correctly shows that no single factor (just “a big project”, just “hi-tech”, just “remote area”) creates the 15-year tier by itself: two incentive layers must overlap. Every investment pitch promising 15 years must be checked against the project’s exact matrix cell before that figure may enter a financial model.
Three cumulative conditions and one misunderstanding to remove
For a project to actually receive an 11 or 15-year exemption decision, three conditions must stand simultaneously. The sector condition: business lines on the incentivised or specially incentivised investment list under investment law at determination time, with actual operations matching the registered lines — a project registered in an incentivised sector but operating something else loses the condition. The area condition: the project site on the current disadvantaged or specially disadvantaged area list — the list is updated by the Government over time, so the lookup must use the version in force when the project is leased land and determined. The subject-and-procedure condition: the project is the direct land user leasing from the State and completes the exemption determination procedure under Article 48 of Decree 103/2024 — without a determination decision, the matrix cells are only paper potential. The misunderstanding to remove is a capital-scale condition: many investors believe a large capital threshold is required for 15 years; in fact Article 39 contains no capital threshold — capital thresholds belong to the special investment incentive and support regime of investment law, applying to other policies. A mid-sized project in the right specially-disadvantaged/incentivised-sector cell receives the full 15 years like any large project.
Operating after exemption: the time clock and condition-loss risk
The exemption mechanism runs on a fixed clock anchored to the land lease decision: basic-construction exemption for up to 3 years, followed by 11 or 15 years by combination — a top-cell project can owe no land rent for up to 18 years from the lease decision, provided construction progress fits inside phase one. Two operating risks must be governed across that long period. Risk one is mid-term condition loss: changing operating sectors, using part of the land for a wrong purpose, or letting the project fall seriously behind schedule can all lead the authority to review the exemption decision and retroactively collect wrongly exempted amounts with late-payment interest under the Law on Tax Administration 108/2025/QH15. Risk two is transferring the project mid-exemption: the incentive attaches to the project file and the determined land user, so the transferee must re-run the determination procedure for the remaining period rather than assuming automatic succession of the old decision. Putting both risks into the project’s annual compliance calendar — reconciling actual operating sectors against the Investment Registration Certificate, reviewing each area portion’s use purpose — is the only way 15 paper years become 15 budget years.
Frequently Asked Questions
Which projects get 11 years of land rent exemption, and which get 15 years?
Under points c and d, clause 3, Article 39 of Decree 103/2024/ND-CP, the line between the two tiers lies entirely in the sector–area combination. The 11-year exemption applies to three cases: projects in specially disadvantaged socio-economic areas (any sector); projects in specially incentivised investment sectors (any area); and incentivised-sector projects located in disadvantaged areas. The 15-year exemption applies to the two ‘double-incentive cross’ cases: incentivised-sector projects in specially disadvantaged areas; and specially incentivised-sector projects in disadvantaged areas. A memory rule: one incentive layer (only a specially disadvantaged area, or only a specially incentivised sector, or ordinary incentive plus a disadvantaged area) yields 11 years; two stacked incentive layers (specially disadvantaged area plus incentivised sector, or disadvantaged area plus specially incentivised sector) yield 15 years. The area list and sector lists apply in their version in force when the project’s incentive is determined.
What are the specific conditions on sector, area and capital scale?
The conditions run on three axes, and there is no capital-scale axis for these two exemption tiers. Sector axis: the project’s business lines must belong to the incentivised or specially incentivised investment sector list under current investment law, as shown on the Investment Registration Certificate and matching actual operations. Area axis: the project site must be on the Government’s disadvantaged or specially disadvantaged socio-economic area list. Formal axis: the project must be the direct land user leasing from the State — a factory sub-leasing inside an industrial park is not the subject of this exemption decision. On capital scale, one common misunderstanding must be corrected: Article 39 of Decree 103/2024 sets no investment-capital threshold for the 11 and 15-year tiers — capital thresholds (projects of VND 12,000 billion and above with disbursement criteria) belong to the special investment incentive and support regime under investment law for other taxes and support, not to land-rent exemption. A small project in the right sector–area cell still receives the full years.
From when is the exemption period counted — the land lease decision or the start of operations?
Both exemption clocks anchor to the land lease decision date, not to the factory’s operation start. Specifically under Article 39 of Decree 103/2024/ND-CP: phase one exempts land rent during basic construction per the approved project, capped at 03 years from the land lease decision date; phase two (the project’s 11 or 15-year tier) begins immediately after that basic-construction period ends. The hard governance consequence: the slower the construction, the more phase one is eroded (the 3-year cap runs continuously regardless of actual progress), and the date full land rent begins is fixedly derived as lease decision date plus basic-construction period plus the exemption years — the finance function can compute this exact date on the day the decision is received and must put it in the cash-flow model instead of waiting for the first tax notice.
If the conditions stop being met, is the exempted rent retroactively collected?
Yes, retroactive collection applies in full. The land-rent exemption is determined on conditions at determination time; if during enjoyment the project stops meeting them (wrong-purpose land use, actual operations diverging from the approved project, project termination or land recovery), the competent authority adjusts or revokes the exemption/reduction determination and the tax authority retroactively collects the wrongly exempted rent plus late-payment interest of 0.03%/day under clause 2, Article 16 of the Law on Tax Administration 108/2025/QH15 over the wrongly enjoyed period. Tax inspection and land inspection are the two typical discovery channels. The enterprise’s duty is to self-review incentive conditions whenever the project changes (sector expansion, partial purpose conversion, project transfer) and proactively re-run the determination procedure instead of letting the state discover it in an inspection years later — for the same collected principal, the longer the wrongful period, the larger the interest.
This article has been quality-reviewed by the FLAW AI Legal Council