Can the taxable price of a natural resource be lower than one imposed by the People’s Committee of the province in Vietnam?

Can the taxable price of a natural resource be lower than one imposed by the People’s Committee of the province in Vietnam?

Under Article 6 of Circular 152/2015/TT-BTC which stipulates the taxable prices of natural resources:

Taxable prices of natural resources

Taxable price of a natural resource is the selling price of a unit of natural resource-derived products imposed by the extracting entity exclusive of VAT. This price must not fall below the taxable price imposed by the People’s Committee of the province. Otherwise, the taxable price imposed by the People’s Committee of the province shall apply.

If the cost of transport of natural resource-derived products and selling price are written on separate invoices, the taxable price is the selling price exclusive of transport cost.

...

Thus, according to the above regulations, the taxable price of a natural resource must not be lower than one imposed by the People’s Committee of the province in Vietnam.

*Note: Otherwise, the taxable price imposed by the People’s Committee of the province shall apply.

Can the taxable price of a natural resource be lower than one imposed by the People’s Committee of the province in Vietnam? (Image from the Internet)

What is the severance taxable price for natural resources of which unit prices of natural resource-derived products can be determined in Vietnam?

Under Clause 1, Article 6 of Circular 152/2015/TT-BTC, for natural resources of which unit prices of natural resource-derived products can be determined, the taxable price is calculated as follows:

- With regard to natural resources of which unit prices of natural resource-derived products can be determined

Taxable price is the selling price of a unit of natural resource-derived products of the same class and quality exclusive of VAT and extracted within the month; Selling price of a unit of natural resource equals (=) total revenue (exclusive of VAT) from the sale of the resource divided by (:) total quantity of the same resource sold in the month.

If no revenue is earned though the natural resource still extracted in the month, taxable price is the weighted mean of taxable unit price of the latest month in which revenue is earned. If the weighted mean of taxable unit price of the latest month in which revenue is earned is lower than the taxable price imposed by the People’s Committee of the province, the taxable price imposed by the People’s Committee of the province shall apply.

In case organizations being legal entities extract natural resources for a corporation/conglomerate under contracts, or sell natural resources at prices decided by such corporation/conglomerate, the taxable prices shall be decided by the corporation/conglomerate but not lower than the prices imposed by the People’s Committee of the province where natural resources are extracted.

Where is the severance taxable price schedule in Vietnam posted?

Under Clause 5, Article 6 of Circular 152/2015/TT-BTC:

Taxable prices of natural resources

...

5. The People’s Committees of provinces shall issue a new taxable price schedule annually as follows:

5.1. The taxable price schedule shall contain information as the basis for determination of severance tax on extraction of natural resources in the province in accordance with policies and law, including: norms for use of natural resources as the basis for conversion from natural resource-derived products or industrial products into quantity of extracted natural resources in the natural resource-derived products and industrial products; corresponding taxable prices of extracted natural resources and natural resource-derived products, where:

a) Norms for use of natural resources as the basis for conversion from natural resource-derived products or industrial products into quantity of extracted natural resources in the natural resource-derived products and industrial products of enterprises in the province are determined according to the enterprises’ declaration and must be consistent with the reports made by other agencies and organizations in terms of content, quality, extraction quantity, extraction methods, and ratio of obtainment in the province where natural resources are extracted;

b) Taxable prices on the price list are prices for extracted natural resources and natural resource-derived products corresponding to properties of natural resources and natural resource-derived products extracted, processed by enterprises in the province, determined according to documents, sale contracts of enterprises/organizations in the province in terms of quality and quantity of each type of natural resources, prices of natural resource-derived products on the local market and adjacent markets, except for the case mentioned in Point c Clause 5 of this Article.

c) Taxable prices of extracted natural resources used for further production and processing instead of being sold are calculated as follows:

c1) For resources used for further production or processing into natural resource-derived products, taxable prices are selling prices of natural resource-derived products exclusive of VAT (if sold domestically) or customs value exclusive of export duty (if exported);

c2) For resources used for further production or processing into industrial products for domestic sale or export, taxable prices are selling prices (if sold domestically) or customs value (if exported) of industrial products minus (-) export duty (if any) and processing cost.

Processing cost mentioned in c.2 shall comply with instructions of relevant Ministries, the Ministry of Finance, and determined by the Department of Finance of the province in cooperation with tax authorities, resources and environment authorities, relevant specialized agencies, then submitted to the People’s Committee of the province for approval according to the processing technologies under approved projects and business outcomes of the enterprises extracting, processing natural resources in the province, but do not include the costs of extraction, screening, enrichment.

5.2. Taxable prices imposed by the People’s Committees of provinces must conform to the bracket of taxable prices promulgated by the Ministry of Finance.

5.3. The agencies appointed by the People’s Committee of the province shall cooperate with relevant agencies in proposing the taxable price schedule to the People’s Committee of the province by December 31 for announcement on January 01 of the succeeding year. In the year, if the selling price of a type or resource fluctuates beyond the bracket of the Ministry of Finance, the Ministry of Finance must be notified to make prompt adjustments.

5.4. Tax authorities assigned to collect severance tax shall post the taxable price schedule at their offices and send it to General Department of Taxation for developing a database about taxable prices.

Thus, according to the above regulations, the tax authorities assigned to collect severance tax shall post the taxable price schedule at their offices and send it to General Department of Taxation for developing a database about taxable prices.