How much is the severance tax imposed on diamond mining in Vietnam?

How much is the severance tax imposed on diamond mining in Vietnam?

First, based on Article 2 of the 2009 Law on severance tax (amended by Clause 1, Article 4 of the 2014 Law on Amendments to Tax Laws), the taxable subjects are defined as follows:

- Metallic minerals.

- Non-metallic minerals.

- Crude oil.

- Natural gas, coal gas.

- Natural forest products, 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 nests.

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

Since diamonds belong to the group of metallic minerals, diamond mining is subject to severance tax.

Additionally, based on Article 7 of the 2009 Law on severance tax, the tax rates are defined as follows:

- The tax rate schedule for natural resources is stipulated as follows:

- The specific tax rates for crude oil, natural gas, and coal gas are determined progressively by the average daily production of crude oil, natural gas, and coal gas.

- Based on the provisions of Clauses 1 and 2 of this Article, the Standing Committee of the National Assembly stipulates specific tax rates for each type of resource in each period to ensure the following principles:

+ Compliant with the list of groups and types of resources and within the tax rate schedule prescribed by the National Assembly;

+ Contributing to state management of resources; ensuring rational, economical, and efficient exploitation and use of resources;

+ Contributing to ensuring state budget revenue and market stability.

Thus, referring to the above tax rate schedule, diamond mining, which falls under the category of metallic minerals, is subject to a tax rate of 16-30%.

How much is the severance tax imposed on diamond mining in Vietnam? (Image from Internet)

What is the basis for calculating the severance tax when mining diamonds in Vietnam?

According to Article 4 of the 2009 Law on severance tax, it is prescribed as follows:

Basis for tax calculation

The basis for calculating the severance tax is the taxable resource output, taxable price, and tax rate.

Thus, the basis for calculating the severance tax when mining diamonds will be determined by the taxable resource output, taxable price, and tax rate.

How to calculate the mining output for diamond severance tax in Vietnam?

According to Article 5 of the 2009 Law on severance tax, it is prescribed as follows:

Taxable resource output

1. For resources with identifiable quantity, weight, or volume, the taxable resource output is the actual quantity, weight, or volume of the resource extracted during the tax period.

2. For resources with unidentifiable quantity, weight, or volume due to containing various substances and impurities, the taxable resource output is determined based on the identifiable quantity, weight, or volume of each substance obtained after screening and sorting.

3. For resources that are not sold but are used for the production of other products, if the actual quantity, weight, or volume of the extracted resource cannot be directly determined, the taxable resource output is determined based on the output of products produced during the tax period and the resource consumption rate per unit of product.

4. For natural water used for hydroelectric production, the taxable resource output is the electricity output sold by the hydroelectric plant to the buyer according to the electricity purchase contract or the electricity output delivered in the absence of an electricity purchase contract, determined according to the measurement system meeting Vietnamese quality measurement standards, certified by the buyer, seller, deliverer, or receiver.

5. For natural mineral water, natural hot water, and natural water used for industrial purposes, the taxable resource output is determined in cubic meters (m³) or liters (l) according to the measurement system meeting Vietnamese quality measurement standards.

6. For resources extracted manually, scatteringly, or intermittently with an annual estimated extraction value below 200,000,000 VND, the resource output for tax calculation is fixed seasonally or periodically. The tax authorities cooperate with relevant local agencies to determine the fixed resource output for tax calculation.

the Government of Vietnam provides detailed regulations for this Article.

Thus, for natural diamond mineral resources, which are very rare, the calculation will be based on two cases:

[1] If the quantity, weight, or volume of extracted diamonds can be identified, the taxable resource output is the actual quantity, weight, or volume of diamonds extracted during the tax period.

[2] If the quantity, weight, or volume of extracted diamonds cannot be immediately identified due to the presence of various substances and impurities, the taxable resource output is determined based on the identifiable quantity, weight, or volume of each substance obtained after screening and sorting.