Are natural forest products subject to severance tax in Vietnam?
Are natural forest products subject to severance tax in Vietnam?
According to Article 2 of the 2009 Law on Severance Tax (amended by Clause 1 of Article 4 of the 2014 Law Amending the Laws on Taxation), the taxable subjects are regulated as follows:
- Metallic minerals.
- Non-metallic minerals.
- Crude oil.
- Natural gas and coal gas.
- Products of natural forests, excluding animals.
- Natural aquatic products, including marine animals and plants.
- Natural water, including surface water and groundwater, excluding natural water used for agriculture, forestry, fishery, and salt production.
- Natural bird's nests.
- Other resources as regulated by the Standing Committee of the National Assembly.
According to the regulations, products of natural forests are among the subjects to severance tax, but animals are excluded.
Are natural forest products subject to severance tax in Vietnam? (Image from the Internet)
Do exploiters conducting small-scale exploitation of natural resources pay severance tax in Vietnam?
According to Article 3 of the 2009 Law on Severance Tax, taxpayers are regulated as follows:
- Severance taxpayers are organizations and individuals exploiting taxable resources.
- Severance taxpayers in certain specific cases are regulated as follows:
+ In the case of a resource-exploiting enterprise established According to a joint venture, the joint venture enterprise is the taxpayer;
+ In the case of Vietnamese and foreign entities participating in a business cooperation contract for resource exploitation, the tax responsibility of each party must be clearly determined in the business cooperation contract;
+ Organizations and individuals exploiting small-scale resources and selling them to organizations or individuals as purchase agents, where said purchase agents agree in writing to declare and pay tax on behalf of the exploiting organizations or individuals, the purchase agents are the taxpayers.
According to the above regulations, exploiter conducting small-scale exploitation of natural resources are subject to severance tax.
What is the severance tax rate for natural forest products in Vietnam?
According to Article 7 of the 2009 Law on Severance Tax, tax rates are regulated as follows:
- The tax rate framework for severance tax is regulated as follows:
| Group | Name | (%) |
| I | Metallic Minerals | |
| 1 | Iron, manganese | 7 - 20 |
| 2 | Titanium | 7 - 20 |
| 3 | Gold | 9 - 25 |
| 4 | Rare earth | 12 - 25 |
| 5 | Platinum, silver, tin | 7 - 25 |
| 6 | Tungsten, antimony | 7 - 25 |
| 7 | Lead, zinc, aluminum, bauxite, copper, nickel | 7 - 25 |
| 8 | Cobalt, molybdenum, mercury, magnesium, vanadium | 7 - 25 |
| 9 | Other metallic minerals | 5 - 25 |
| II | Non-metallic Minerals | |
| 1 | Earth for leveling and construction | 3 - 10 |
| 2 | Stone, except lime stone for lime production and cement; gravel; sand, except sand for glass production | 5 - 15 |
| 3 | Earth for brick production | 5 - 15 |
| 4 | Granite, refractory clay | 7 - 20 |
| 5 | Dolomite, quartzite | 7 - 20 |
| 6 | Kaolin, mica, technical quartz, sand for glass production | 7 - 15 |
| 7 | Pyrite, phosphorite, lime stone for lime production and cement | 5 - 15 |
| 8 | Apatite, serpentine | 3 - 10 |
| 9 | Underground anthracite | 4 - 20 |
| 10 | Open-pit anthracite | 6 - 20 |
| 11 | Brown coal, coking coal | 6 - 20 |
| 12 | Other coal | 4 - 20 |
| 13 | Diamond, ruby, sapphire | 16 - 30 |
| 14 | Emerald, alexandrite, black precious opal | 16 - 30 |
| 15 | Iolite, rhodolite, pyrope, beryl, spinel, topaz | 12 - 25 |
| 16 | Amethyst, green and yellow quartz crystal; cryolite; white and red fire opal; feldspar; turquoise; nephrite | 12 - 25 |
| 17 | Other non-metallic minerals | 4 - 25 |
| III | Crude Oil | 6 - 40 |
| IV | Natural Gas, Coal Gas | 1 - 30 |
| V | Products of Natural Forests | |
| 1 | Wood group I | 25 - 35 |
| 2 | Wood group II | 20 - 30 |
| 3 | Wood groups III, IV | 15 - 20 |
| 4 | Wood groups V, VI, VII, VIII and other types of wood | 10 - 15 |
| 5 | Branches, tops, stumps, roots | 10 - 20 |
| 6 | Firewood | 1 - 5 |
| 7 | Bamboo, rattan, reed, thatch, vulu, lo o | 10 - 15 |
| 8 | Agarwood, cinnamon | 25 - 30 |
| 9 | Anise, cinnamon, cardamom | 10 - 15 |
| 10 | Other products of natural forests | 5 - 15 |
| VI | Natural Aquatic Products | |
| 1 | Pearls, abalone, sea cucumber | 6 - 10 |
| 2 | Other natural aquatic products | 1 - 5 |
| VII | Natural Water | |
| 1 | Natural mineral water, natural hot water, filtered bottled or canned natural water | 8 - 10 |
| 2 | Natural water used for hydroelectric production | 2 - 5 |
| 3 | Natural water used for production, business, except for water specified at points 1 and 2 of this Group | |
| 3.1 | Surface water | 1 - 3 |
| 3.2 | Groundwater | 3 - 8 |
| VIII | Natural Bird's Nests | 10 - 20 |
| IX | Other Resources | 1 - 20 |
- Specific tax rates for crude oil, natural gas, and coal gas are determined progressively by the daily average extraction volume of crude oil, natural gas, and coal gas.
- According to the regulations in Clauses 1 and 2 of this Article, the Standing Committee of the National Assembly regulates specific tax rates for each type of resource in each period, ensuring the following principles:
+ Appropriate to the group and type of resources and within the tax rate framework determined by the National Assembly;+ Contributing to state management of resources; protecting, exploiting, and using resources rationally, economically, and effectively;+ Contributing to ensuring state budget revenue and stabilizing the market.
Accordingly, According to the above regulations, the severance tax rate for products of natural forests falls under Group V as shown in the table above.
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