How to calculate and pay environmental protection tax for goods produced for gifting purposes in Vietnam?

How to calculate and pay environmental protection tax for goods produced for gifting purposes in Vietnam?

Based on Article 5 of Decree 67/2011/ND-CP:

Tax declaration, calculation, and payment

Tax declaration, calculation, and payment are carried out according to the provisions of Article 10 of the Law on Environmental Protection Tax and the law on tax administration.

1. For domestically produced goods sold, exchanged, consumed internally, or given as gifts, tax declaration, calculation, and payment are done on a monthly basis. For imported goods, including those imported on commission, tax declaration, calculation, and payment are done per each occurrence.

2. Tax declaration, calculation, and payment of environmental protection taxes on gasoline, oil, and lubricants: Lead petroleum trading companies shall declare and pay environmental protection tax to the state budget for the quantity of gasoline and oil exported, sold (including exports for internal consumption, exports for product exchange, exports to return entrusted imported goods, sales to other entities or individuals; except for sales to other lead petroleum trading companies) in the locality where VAT is declared and paid.

The Ministry of Finance stipulates that lead companies declare and pay environmental protection tax on gasoline and oil.

3. Tax declaration, calculation, and payment of environmental protection tax on coal products are to be conducted based on the principle that domestically consumed coal must declare and pay environmental protection tax; exported coal is not subject to environmental protection tax. The Ministry of Finance, in cooperation with the Ministry of Industry and Trade, provides detailed guidance on this provision.

4. Environmental protection tax is payable only once for domestically produced or imported goods. In cases where exported goods, for which environmental protection tax has been paid, are re-imported into Vietnam, they are not subject to environmental protection tax upon re-importation.

Therefore, in accordance with the regulations, for goods produced for gifting purposes, tax declaration, calculation, and payment shall be conducted monthly.

How to calculate and pay environmental protection tax for goods produced for gifting purposes in Vietnam? (Image from the Internet)

What are criteria for calculating environmental protection tax on goods produced for gifting purposes in Vietnam?

According to Article 5 of Circular 152/2011/TT-BTC (supplemented by Article 3 of Circular 159/2012/TT-BTC and amended by Article 1 of Circular 106/2018/TT-BTC):

Tax calculation basis

The basis for calculating environmental protection tax is the quantity of taxable goods and the absolute tax rate.

1. The quantity of taxable goods is regulated as follows:

1.1. For domestically produced goods, the taxable quantity of goods includes quantities sold, exchanged, internally consumed, gifted, promoted, or advertised.

1.2. For imported goods, the taxable quantity of goods is the quantity of imported goods.

In cases where the taxable goods quantities for environmental protection tax are measured in units different from the units stipulated in the tax rate table issued by the Standing Committee of the National Assembly, the quantities must be converted to the measurement units stipulated in the environmental protection tax rate table for tax calculation.

1.3. For mixed fuels containing fossil-based gasoline, oil, lubricants, and biofuels, the taxable quantity in the period is the quantity of fossil-based gasoline, oil, lubricants in the mixed fuels produced or sold, exchanged, gifted, or used internally converted to the stipulated measurement unit for the corresponding taxable goods. Determination is as follows:

Based on the technical standards for processing mixed fuels approved by the competent authority (including cases with changes to the percentage of fossil-based gasoline, oil, lubricants in the mixed fuel), taxpayers shall calculate, declare, and pay environmental protection tax on the quantity of fossil-based gasoline, oil, lubricants; simultaneously, notify the tax authority of the percentage of fossil-based gasoline, oil, lubricants contained in the mixed fuels and submit this notification together with the tax declaration for the following month in which the mixed fuels (or adjusted percentage) are sold.

1.4. For multilayer plastic bags produced or processed from single-layer films HDPE, LDPE, LLDPE, and other films (PP, PA,...) or other materials like aluminum, paper, etc., environmental protection tax is determined based on the percentage weight of single-layer films HDPE, LDPE, LLDPE contained in the multilayer plastic bags. Based on the usage standard for single-layer films HDPE, LDPE, LLDPE in producing or processing multilayer plastic bags, producers or importers of multilayer plastic bags shall declare and take responsibility for their declarations.

Example 8: Company A produces or imports 100 kg of multilayer plastic bags, of which the weight of single-layer films HDPE, LDPE, LLDPE in the multilayer plastic bags is 70%, and the weight of other films (PA, PP, ..) is 30%.

Thus, the environmental protection tax that company A must pay for 100 kg of multilayer plastic bags is: 100 kg x 70% x 40,000 VND/kg = 2,800,000 VND.

2. The absolute tax rate as the basis for calculating environmental protection tax on each type of goods is the rate stipulated in the tax rate table issued with Resolution No. 1269/2011/UBTVQH12 dated July 14, 2011, and Resolution No. 888a/2015/UBTVQH13 dated March 10, 2015, of the Standing Committee of the National Assembly amending and supplementing Resolution No. 1269/2011/UBTVQH12 on the environmental protection tax rate table.

Therefore, in accordance with the above regulations, the basis for calculating environmental protection tax on goods produced for gifting purposes will be the taxable quantity of goods and the absolute tax rate.

Note:

- The quantity of goods produced will be the basis for calculating the tax.

- The absolute tax rate as the basis for calculating environmental protection tax on each type of goods is the rate stipulated in the tax rate table issued with Resolution 1269/2011/UBTVQH12 and Resolution 888a/2015/UBTVQH13.

What is the tax calculation time for goods produced for gifting purposes in Vietnam?

Based on Article 9 of Law on Environmental Protection Tax 2010:

Time for calculating tax

1. For domestically produced goods sold, exchanged, or gifted, the time for calculating tax is the time of transferring ownership or use rights of goods.

2. For domestically produced goods used internally, the time for calculating tax is the time goods are put into use.

3. For imported goods, the time for calculating tax is the time of customs declaration registration.

4. For gasoline and oil produced or imported for sale, the time for calculating tax is the time the lead petroleum trading company sells.

Therefore, for goods produced for gifting purposes, the time for calculating tax will be the time of transferring the ownership or use rights of the goods (i.e., the time when the goods are gifted or given away).