Are foam box manufacturing enterprises subject to environmental protection tax in Vietnam?

Are foam box manufacturing enterprises subject to environmental protection tax in Vietnam?

* On Subjects Liable to Tax (Article 3 of the Law on Environmental Protection Tax 2010)

- Gasoline, oil, lubricants, including:

+ Gasoline, except ethanol;

+ Jet fuel;

+ Diesel oil;

+ Kerosene;

+ Heavy fuel oil;

+ Lubricants;

+ Grease.

- Coal, including:

+ Lignite;

+ Anthracite;

+ Coking coal;

+ Other types of coal.

- Hydro-chloro-fluoro-carbon solution (HCFC).

- Taxable plastic bags.

- Herbicides that are restricted for use.

- Termiticides that are restricted for use.

- Wood preservatives that are restricted for use.

- Warehouse disinfectants that are restricted for use.

- If deemed necessary, the Standing Committee of the National Assembly shall consider and legislate on supplementing other taxable objects in each period of time.

Subjects liable to environmental protection tax are also guided by Article 2 of Decree 67/2011/ND-CP (amended by Article 1 of Decree 69/2012/ND-CP) as follows:

The liable subjects comply with regulations outlined in Article 3 of the Law on Environmental Protection Tax 2010.

- For gasoline, oil, and lubricants specified in clause 1, Article 3 of the Law on Environmental Protection Tax 2010, they are fossil-based. For mixed fuels containing biofuels and fossil-based gasoline, oil, and lubricants, environmental protection tax is calculated only on the fossil-based portion.

- For hydro-chloro-fluoro-carbon (denoted as HCFC) specified in clause 3, Article 3 of the Law on Environmental Protection Tax 2010, it is a gas used as a refrigerant in refrigeration equipment and the semiconductor industry.

- For taxable plastic bags (plastic bags), as specified in clause 4, Article 3 of the Law on Environmental Protection Tax 2010, they are thin, bag-shaped plastic packaging (including bag mouth, bag bottom, bag sides, capable of containing products) made from single-layer HDPE (high density polyethylene resin), LDPE (Low density polyethylene), or LLDPE (Linear low density polyethylene resin), except for pre-packaged packaging and plastic bags meeting environmentally friendly criteria per the regulations of the Ministry of Natural Resources and Environment.

Pre-packaged goods as defined in this clause (including both bag-shaped and non-bag-shaped) include:

+ Imported pre-packaged goods packaging;

+ Packaging produced or imported by organizations, households, or individuals to pack products manufactured, processed, or purchased by them for packaging or packaging services;

+ Packaging purchased directly from producers or importers by organizations, households, or individuals to pack products manufactured, processed, or purchased by them for packaging or packaging services.

- For restricted-use herbicides, termiticides, wood preservatives, and warehouse disinfectants specified in clauses 5, 6, 7, and 8, Article 3 of the Law on Environmental Protection Tax 2010: Details are implemented according to Resolution No. 1269/2011/UBTVQH12 dated July 14, 2011, by the Standing Committee of the National Assembly on the environmental protection tax rate table.

* On Non-Taxable Objects (Article 4 of the Law on Environmental Protection Tax 2010)

- Goods not specified in Article 3 of the Law on Environmental Protection Tax 2010 are not subject to the environmental protection tax.

- Goods specified in Article 3 of the Law on Environmental Protection Tax 2010 are not subject to the environmental protection tax in the following cases:

+ Goods transiting or transferring via Vietnamese borders as per law, including goods transported from the exporting country to the importing country via Vietnamese borders without import procedures into Vietnam or export procedures out of Vietnam; goods transiting through Vietnamese borders based on agreements signed between the Government of Vietnam and a foreign government or agreements between agencies or representatives authorized by the Government of Vietnam and a foreign government per the law;

+ Goods temporarily imported for re-export within the time frame prescribed by law;

+ Goods directly exported by producers or entrusted to export businesses for export, except when organizations, households, or individuals purchase goods subject to the environmental protection tax for export.

Therefore, currently, manufacturing foam boxes is not subject to the environmental protection tax.

Are foam box manufacturing enterprises subject to environmental protection tax in Vietnam? (Image from the Internet)

How to calculate the environmental protection tax in Vietnam?

According to Article 7 of the Law on Environmental Protection Tax 2010, the method of calculating the environmental protection tax is the payable environmental protection tax equals the quantity of taxable goods multiplied by the absolute tax rate prescribed for each unit of goods.

What is the roadmap for microplastic products, non-biodegradable plastic packaging for environmental protection in Vietnam?

Based on the regulation in Article 64 of Decree 08/2022/ND-CP, microplastic products and non-biodegradable plastic packaging will have the following roadmap:

- From January 1, 2026, there will be no production and import of non-biodegradable plastic bags smaller than 50 cm x 50 cm with a single-layer film thickness less than 50 µm, except for production for export or for packaging products and goods sold on the market.

- Organizations and individuals producing and importing single-use plastic products, non-biodegradable plastic packaging must fulfill recycling and treatment responsibilities as stipulated by this Decree.

- Gradually minimize the production and import of single-use plastic products, non-biodegradable plastic packaging, and products and goods containing microplastics. After December 31, 2030, halt the production and import of single-use plastic products (except products certified with Vietnam's ecological label), non-biodegradable plastic packaging (including non-biodegradable plastic bags, foam plastic food containers), and microplastic-containing products and goods, except for production for export and production or import of non-degradable plastic packaging for packaging products and goods for market sale.

- Provincial People's Committees shall issue regulations and organize waste management activities, ensuring that after 2025, single-use plastic products and non-biodegradable plastic packaging (including non-degradable plastic bags, foam plastic food containers) are not circulated and used in commercial centers, supermarkets, hotels, tourist areas, except for products and goods with non-degradable plastic packaging; organize inspections and examinations of units producing single-use plastic products and non-degradable plastic packaging locally.