How to determine the severance tax-liable prices of timber in Vietnam?

How to determine the severance tax-liable prices of timber in Vietnam?

According to point b, clause 3, Article 6 of the 2009 Law on Severance tax, the calculation of the severance tax-liable prices of resources is stipulated as follows:

Severance tax-liable prices

1. The severance tax-liable prices of resources is the selling price per unit of the resource product, excluding value-added tax.

2. In cases where the selling price of a resource is not determined, the severance tax-liable prices of resources is identified based on one of the following bases:

a) The actual selling price in the regional market of the same type of resource product but not lower than the severance tax-liable prices set by the Provincial People's Committee;

b) If the extracted resource contains several different components, the severance tax-liable prices is determined based on the selling price per unit and the content of each component in the extracted resource, but not lower than the severance tax-liable prices set by the Provincial People's Committee.

3. The severance tax-liable prices of resources in specific cases is determined as follows:

a) For natural water used for hydropower production, it is the average commercial electricity selling price;

b) For timber, it is the selling price at the handover site; if the selling price at the handover site is not determined, the severance tax-liable prices is based on the value set by the Provincial People's Committee;

c) For resources extracted for export without domestic consumption, it is the export price;

d) For crude oil, natural gas, and coal gas, it is the selling price at the delivery point. The delivery point is the agreed location in the petroleum contract where the ownership of crude oil, natural gas, and coal gas is transferred to the parties involved in the petroleum contract.

Thus, the severance tax-liable prices of timber resources is the selling price at the handover site; if the selling price at the handover site is not determined, the severance tax-liable prices is based on the value set by the Provincial People's Committee.

How to determine the severance tax-liable prices of timber in Vietnam? (Image from the Internet)

Is the severance tax on timber declared monthly or separately in Vietnam?

Based on Article 8 of Decree 126/2020/ND-CP, the regulations include:

Types of taxes declared monthly, quarterly, annually, separately, and tax finalization

1. Types of taxes and other revenues from the state budget managed by the tax authorities declared monthly include:

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d) Severance tax, except for Severance tax specified in point e of this section.

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e) For activities of exploitation, sale of natural gas: Severance tax; corporate income tax; special taxes of the Vietnam - Russia Joint Venture "Vietsovpetro" at Lot 09.1 according to the Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Russian Federation signed on December 27, 2010, regarding continued cooperation in geological exploration and oil and gas exploitation on the continental shelf of the Socialist Republic of Vietnam within the framework of the Vietnam - Russia Joint Venture "Vietsovpetro" (hereinafter referred to as Vietsovpetro Joint Venture at Lot 09.1); profit sharing from natural gas to the host country.

...

4. Types of taxes and other revenues from the state budget declared separately include:

...

d) Severance tax of organizations assigned to sell seized and confiscated resources; irregular resource exploitation permitted by competent state authorities or exempt from permits as per the law.

...

Thus, the Severance tax on timber is declared monthly. Additionally, in cases where the Severance tax on timber for organizations assigned to sell seized and confiscated resources, or irregular timber resource exploitation permitted by the state, is declared separately.

What are cases of exemption or reduction of severance tax on timber in Vietnam?

According to Article 9 of the 2009 Law on Severance tax, as amended by clause 2, Article 4 of the 2014 Law on Amendments to Tax Laws, the exemptions and reductions of severance tax are specified as follows:

Exemption and Reduction of Taxes

1. Taxpayers who suffer from natural disasters, fires, or unexpected accidents causing damage to declared and taxed resources are considered for tax exemption or reduction on the damaged resources; if the tax has been paid, they are entitled to a refund of the paid tax or deduction from future payable Severance tax.

2. Exemption from tax for natural seafood.

3. Exemption from tax for branches, tops, firewood, bamboo, and other similar materials harvested by individuals for daily living.

4. Exemption from tax for natural water used for hydropower production by households or individuals for self-production for daily living.

5. Exemption from tax for natural water harvested by households or individuals for daily living.

6. Exemption from tax for extracted land and locally used land within the allocated or leased land area; land exploited for leveling and construction of security, military, and dike works.

7. Other cases of tax exemption or reduction as prescribed by the Standing Committee of the National Assembly.

According to the above regulations, cases of exemption or reduction of Severance tax on timber include:

- Taxpayers who suffer from natural disasters, fires, or unexpected accidents causing damage to declared and taxed resources are considered for tax exemption or reduction on the damaged resources; if the tax has been paid, they are entitled to a refund of the paid tax or deduction from future payable Severance tax.

- Exemption from tax for firewood harvested by individuals for daily living;

- Other cases of tax exemption or reduction as prescribed by the Standing Committee of the National Assembly.