Are metallic minerals which are titanium subject to severance tax in Vietnam?

Are metallic minerals which are titanium subject to severance tax in Vietnam?

Based on Article 2 of the 2009 Law on severance tax (amended by Clause 1, Article 4 of the 2014 Law on Amendments to Laws on Taxation), the following entities are subject to tax:

- Metallic minerals.

- Non-metallic minerals.

- Crude oil.

- Natural gas, coal gas.

- Products from natural forests, excluding animals.

- Natural aquatic resources, including marine plants and animals.

- Natural water, including surface water and groundwater, excluding natural water used for agriculture, forestry, fishery, and salt production.

- Natural bird nests.

- Other resources as regulated by the Standing Committee of the National Assembly.

Additionally, based on the tax rate framework for severance tax in Article 7 of the 2009 Law on severance tax, titanium falls under the category of metallic minerals.

Thus, according to the above regulations, metallic minerals, such as titanium, are taxable resources. Therefore, metallic minerals which are titanium are subject to severance tax.

Are metallic minerals which are titanium subject to severance tax in Vietnam? (Image from the Internet)

What is the severance tax rate for metallic minerals which are titanium in Vietnam?

Based on the tax rate framework for severance tax in Article 7 of the 2009 Law on severance tax, the tax rate framework is as follows:

-Severance tax rate framework is regulated as follows:

- Specific tax rates for crude oil, natural gas, and coal gas are determined progressively based on average daily production.

- According to Clause 1 and Clause 2 of this Article, the Standing Committee of the National Assembly stipulates specific tax rates for each type of resource and period, ensuring the following principles:

+ Complying with the list of resource categories and within the tax rate framework set by the National Assembly;

+ Contributing to state management of resources; protecting, exploiting, and using resources rationally, economically, and efficiently;

+ Ensuring state budget revenue and market stability.

Thus, according to the above regulations, the severance tax rate for metallic minerals which are titanium will range from 7% to 20%.

How is the taxable resource quantity determined for metallic minerals which are titanium that are extracted but not sold and are instead used for production?

According to Article 5 of the 2009 Law on severance tax:

* Taxable Resource Quantity

- For resources extracted that can be quantified by number, weight, or volume, the taxable resource quantity is the actual quantity, weight, or volume extracted during the tax period.

- For resources extracted that cannot be quantified by number, weight, or volume due to containing various substances and impurities, the taxable resource quantity is determined based on the quantity, weight, or volume obtained after sorting and classification.

- For resources extracted but not sold and are instead used for production, if the actual quantity, weight, or volume extracted cannot be directly determined, the taxable resource quantity is determined based on the quantity of products produced during the tax period and the standard resource usage per unit of product.

- For natural water used in hydroelectric production, the taxable resource quantity is the electricity quantity sold to the buyer under the purchase contract or the quantity delivered in cases without a purchase contract, determined according to a metering system meeting Vietnamese standards of measurement and quality, confirmed by both seller and buyer or deliverer and receiver.

- For natural mineral waters, hot waters, and water used for industrial purposes, the taxable resource quantity is measured in cubic meters (m³) or liters (l) according to a metering system meeting Vietnamese standards of measurement and quality.

- For manually extracted, dispersed, or intermittently extracted resources, with an estimated annual extraction value below 200,000,000 VND, taxable resource quantity is seasonally or periodically allocated based on the estimated extraction quantity for tax calculation. The Tax Authority collaborates with relevant local agencies to determine the allocated extraction quantity for tax purposes.

Thus, the taxable resource quantity for metallic minerals which are titanium that are extracted but not sold and instead used for production is determined based on the quantity of products produced during the tax period and the standard resource usage per unit of product.