Are imported lubricating grease subject to environmental protection tax in Vietnam?

Are imported lubricating grease subject to environmental protection tax in Vietnam?

The subjects liable to environmental protection tax are stipulated in Article 3 of the 2010 Law on Environmental Protection Tax as follows:

Subjects Liable to Tax

1. Petrol, oil, and grease, including:

a) Petrol, except ethanol;

b) Aviation fuel;

c) Diesel oil;

d) Kerosene;

dd) Mazut oil;

e) Lubricating oil;

g) Lubricating grease.

2. Coal, including:

a) Brown coal;

b) Anthracite coal;

c) Fat coal;

d) Other types of coal.

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

4. Taxable plastic bags.

...

Thus, lubricating grease is one of the subjects liable to environmental protection tax.

Are imported lubricating grease subject to environmental protection tax in Vietnam? (Image from the Internet)

What is the foundation for calculation of the environmental protection tax for imported lubricating grease in Vietnam?

According to Article 6 of the 2010 Law on Environmental Protection Tax, the foundation for calculation of the environmental protection tax for imported lubricating grease in Vietnam is as follows:

Basis for Tax Calculation

1. The basis for calculating the environmental protection tax is the taxable amount and the absolute tax rate.

2. The taxable amount is stipulated as follows:

a) For domestically produced goods, the taxable amount is the quantity of goods produced, sold, exchanged, internally consumed, or gifted;

b) For imported goods, the taxable amount is the quantity of imported goods.

3. The absolute tax rate for tax calculation is stipulated in Article 8 of this Law.

Additionally, Article 5 of Circular 152/2011/TT-BTC also stipulates the basis for calculating the environmental protection tax applicable to imported goods as follows:

Basis for Tax Calculation

The basis for calculating the environmental protection tax is the taxable amount and the absolute tax rate.

1. The taxable amount is stipulated as follows:

1.1. For domestically produced goods, the taxable amount is the quantity of goods produced, sold, exchanged, internally consumed, gifted, or promoted.

1.2. For imported goods, the taxable amount is the quantity of imported goods.

In cases where the taxable quantity of goods subject to environmental protection tax when exported, sold, and imported is measured in a unit of measurement different from the unit stipulated for tax calculation in the environmental protection tax rate table issued by the Standing Committee of the National Assembly, it must be converted to the unit of measurement stipulated in the environmental protection tax rate table for tax calculation.

1.3. For mixed fuel containing petrol, oil, or grease made from fossil fuel and biofuel, the taxable amount is the amount of fossil-fuel-based petrol, oil, or grease in the mixed fuel sold, exchanged, gifted, or internally used, converted into the tax calculation unit of the corresponding goods. The determination is as follows:

...

Thus, based on the above regulations, the taxable amount of imported lubricating grease is based on the quantity of imported lubricating grease to calculate the environmental protection tax.

*Note: In cases where the taxable quantity of goods subject to environmental protection tax when exported, sold, and imported is measured in a unit of measurement different from the unit stipulated for tax calculation in the environmental protection tax rate table issued by the Standing Committee of the National Assembly, it must be converted to the unit of measurement stipulated in the environmental protection tax rate table for tax calculation.

In addition, the timing for calculating the environmental protection tax applicable to imported lubricating grease will be based on Article 9 of the 2010 Law on Environmental Protection Tax on the timing for tax calculation as follows:

Timing for Tax Calculation

1. For domestically produced goods sold, exchanged, or gifted, the time of tax calculation is the time of transfer of ownership or use rights of goods.

2. For goods produced for internal consumption, the time of tax calculation is the time the goods are put to use.

3. For imported goods, the time of tax calculation is the time of customs declaration registration.

4. For domestically produced or imported petrol and oil for sale, the time of tax calculation is the time when the petrol and oil wholesaler sells them.

For imported goods, the time of tax calculation is the time of customs declaration registration.

How to determine the absolute tax rate for imported lubricating grease in Vietnam?

According to Article 4 of Circular 152/2011/TT-BTC, the environmental protection tax payable when engaging in grease business is determined by the following formula:

In addition, clause 1, Article 8 of the 2010 Law on Environmental Protection Tax stipulates the tax rate applicable to imported lubricating grease as follows:

Thus, the environmental protection tax applied to imported lubricating grease ranges from 300 VND per unit of goods to 2,000 VND per unit of goods.

In addition, the environmental protection tax for imported lubricating grease is determined by the following formula: