What is the determination of the severance taxable price for natural gas in Vietnam?

Is natural gas subject to severance tax in Vietnam?

The severance tax-liable objects are prescribed in Article 2 of the Law on severance tax 2009 (amended by Clause 1, Article 4 of the Law on Amendments to Tax Laws 2014) as follows:

Severance tax-liable objects

1. Metallic minerals.

2. Non-metallic minerals.

3. Crude oil.

4. Natural gas, coal gas.

5. Natural forest products, other than animals.

6. Natural aquatic products, including marine animals and plants.

7. Natural water, including surface water and underground water, except for natural water used for agriculture, forestry, aquaculture, and salt production.8. Natural swallow's nests.

9. Other resources prescribed by the National Assembly Standing Committee.

Thus, natural gas is one of the severance tax-liable objects.

What is the determination of the severance taxable price for natural gas in Vietnam? (Image from the Internet)

What is the determination of the severance taxable price for natural gas in Vietnam?

The severance tax calculation value for natural gas is prescribed in Clause 2, Article 5 of Circular 36/2016/TT-BTC as follows:

Principles to determine the taxable price

...

Where the crude oil is not sold as per fair transactions, the taxable price to the crude oil is the average selling price of the month of crude oil sale of the same type or equivalent in the international market. The taxpayers must provide the tax agency with information about the components and quality of crude oil under extraction. In case of necessity, the tax agency shall refer to the selling price in US market (WTI), UK market (Brent) or Singapore market (Platts) or consult the competent state authorities about the determining the crude oil price under extraction of the taxpayers.

2. The natural gas, the taxable price is the selling price of natural gas at the delivery place, determined under the natural gas sale contract and approved by the Prime Minister and in accordance with the agreement in the petroleum contract taking into account the time of calculating the market price and other factors (if any). In case of necessity, the tax agency shall consult the competent state authorities about the determining the natural gas price under extraction of the taxpayers.

Thus, for natural gas, the taxable price is the selling price of natural gas at the delivery place, determined under the natural gas sale contract and approved by the Prime Minister and in accordance with the agreement in the petroleum contract taking into account the time of calculating the market price and other factors (if any).

In case of necessity, the tax agency shall consult the competent state authorities about determining the natural gas price under extraction of the taxpayers

When is the deadline for paying severance tax on natural gas in Vietnam?

According to Article 55 of the Law on Tax Administration 2019 which stipulates the tax payment deadlines as follows:

Tax payment deadlines

1. In case tax is calculated by the taxpayer, the tax payment deadline is the deadline for submission of the tax declaration dossier. In case of submission of supplementary tax documents, the tax payment deadline is the deadline for submission of the erroneous tax declaration dossier.

The deadline for paying corporate income tax, which is paid quarterly, is the 30th of the first month of the next quarter.

The deadline for paying severance tax and corporate income tax on crude oil is 35 days from the date of selling domestically or the date of customs clearance in case of export.

Severance tax and corporate income tax on natural gas shall be paid monthly.

2. In case tax is calculated by the tax authority, the tax payment deadline shall be specified in the tax authority’s notice.

3. The deadlines for paying other amounts payable to state budget from land, grant of the right to water resource extraction or mineral extraction, registration fees and licensing fees shall be specified by the Government.

4. For taxable exports and imports, deadlines for tax payment are specified in the Law on Export and import duties. In case tax is incurred after customs clearance or conditional customs clearance:

a) The deadline for submission of supplementary documents and fulfillment of the imposed tax liability is the same as that on the initial customs declaration;

b) The Minister of Finance shall specify deadlines for paying tax on goods that need to under analysis to determine tax payable, goods without official prices when the customs declaration is registered; goods for which the payment; goods for which payments and added amounts to the customs value are unknown when the customs declaration is registered.

Thus, the severance tax on natural gas is paid monthly.

In case tax is calculated by the taxpayer, the tax payment deadline is the deadline for submission of the tax declaration dossier.

In case of submission of supplementary tax documents, the tax payment deadline is the deadline for submission of the erroneous tax declaration dossier