In 2025, who are the severance taxpayers in Vietnam? How to declare and pay severance tax in Vietnam?

In 2025, who are the severance taxpayers in Vietnam?

Based on Article 3 of the 2009 Law on severance tax, amended by Clause 2, Article 67 of the 2022 Petroleum Law, the provisions on severance taxpayers for the year 2025 include:

(1) severance taxpayers are organizations or individuals exploiting resources subject to severance tax, except in cases of resource extraction concerning mines, oil fields, and lots of oil being extracted exhaustively under the legal provisions on petroleum.

The subjects liable for severance tax are determined according to Article 2 of the 2009 Law on severance tax, amended by Clause 1, Article 4 of the 2014 Law on Amendments to Tax Laws, which include:

- Metallic minerals.- Non-metallic minerals.- Crude oil.- Natural gas and coal gas.- Products from natural forests, excluding animals.- Natural seafood, including marine animals and plants.- Natural water, including surface water and groundwater, excluding natural water for agriculture, forestry, aquaculture, and salt production.- Natural bird's nests.- Other resources as stipulated by the Standing Committee of the National Assembly.

(2) severance taxpayers in certain cases are specified as follows:

+ Enterprises exploiting resources established on a joint venture basis, particularly the joint venture company is the taxpayer;

+ In cases where Vietnamese and foreign parties participate in a business cooperation contract for resource exploitation, the tax obligations of the parties must be clearly defined in the business cooperation contract;

+ Organizations or individuals undertaking small-scale resource extraction and selling to collection hubs where these hubs agree in writing to declare and pay tax on behalf of the extractors, then those collection hubs become the taxpayers.

How to declare and pay severance tax in Vietnam?

Based on Article 8 of the 2009 Law on severance tax, guided by Article 8 of Circular 152/2015/TT-BTC, severance taxpayers must register, declare, calculate, and pay tax according to the provisions of the Tax Administration Law and its guiding documents and amendments (if any).

Specific to tax declaration, payment, and settlement for mineral extraction activities, besides adhering to the general regulations, the following procedures under Article 9 of Circular 152/2015/TT-BTC apply:

- Organizations and business households involved in resource extraction must inform the tax authorities of the method for determining taxable price for each resource type extracted, accompanied by the initial month's tax declaration dossier when extraction begins. Any changes in this method must be reported to the managing tax authorities within the month of change.

- Monthly, taxpayers must declare tax on the entire production of resources extracted in the month (irrespective of inventory or in processing).

- When settling taxes, taxpayers must compile a List attached to the annual tax finalization declaration detailing the production extracted during the year for each mine corresponding to the issued permit. severance tax is determined based on the tax rate for the type of resource extracted in relation to the production and taxable price as follows:

+ Taxable production is the total production of resources extracted during the year, irrespective of inventory or in processing or transport.

For instances where the sold production includes both resource product and industrial product, conversion from the resource included in the production from resource product and industrial product into extracted production according to resource usage norms as determined by the taxpayer is necessary.

+ The tax calculation price is the average selling price per unit of resource product, calculated by dividing the total revenue from resource sales by the total production of resources sold in the year.

Who are the severance taxpayers in Vietnam in 2025? (Image from the Internet)

How is the severance tax calculated in Vietnam for 2025?

According to Article 4 of the 2009 Law on severance tax, guided by Article 4 of Circular 152/2015/TT-BTC, the basis for calculating severance tax includes taxable resource production, taxable price per unit of resource, and the severance tax rate.

The severance tax payable in the period is determined as follows:

In cases where the state agency stipulates a fixed severance tax amount payable per unit of resource extracted, the severance tax payable is determined as follows: