Is natural water extracted by households to serve their everyday life subject to severance tax in Vietnam?

Is natural water extracted by households to serve their everyday life subject to severance tax in Vietnam?

According to Article 10 of Circular 152/2015/TT-BTC:

Severance tax exemption

The cases of exemption from severance tax are specified in Article 9 of the Law on severance tax and Article 6 of Decree No. 50/2010/ND-CP, including:

1. Entities extracting natural marine organisms.

2. Entities extracting branches, firewood, bamboo, rattan, etc. serving everyday life.

3. Entities extracting natural water for hydroelectricity generation serving everyday life of households and individuals.

4. Natural water extracted by households and individuals serving their everyday life.

5. Land areas given/leased out to organizations and individuals and used on the spot; earth used for leveling, construction of security, military works, dykes.

Earth extracted and used on the spot eligible for tax exemption include sand, rock, gravel in the earth without specific substances and is used as is for leveling or construction. If earth is transport elsewhere for use or for sale, severance tax must be paid as prescribed.

6. The Ministry of Finance shall cooperate with relevant Ministries and agencies in proposing other cases of exemption from severance tax to the government, which will be considered and decided by Standing Committee of the National Assembly.

The natural water extracted by households to serve their everyday life is not subject to severance tax in Vietnam.

Is natural water extracted by households to serve their everyday life subject to severance tax in Vietnam? (Image from Internet)

What is the severance tax rate applicable to natural water used for hydropower generation in Vietnam?

Therefore, the severance tax rate applicable to natural water used for hydropower generation in Vietnam is 5%.

Which entities are the payers of severance tax on natural water in Vietnam?

According to Article 3 of the Law on severance tax 2009 as amended by Clause 2, Article 67 of the Petroleum Law 2022, the following stipulations apply:

Severance tax payers

1. Payers of severance tax are resource-extracting organizations and individuals subject to severance taxation, except for exploitation of oil and gas fields, groups of oil fields and blocks according to the regulations of law on petroleum.

2. In some cases, severance tax payers shall be defined as follows:

a/ For a mining enterprise established on the basis of joint venture, the joint-venture enterprise shall pay severance tax:

b/ For Vietnamese and foreign parties to a business cooperation contract to exploit natural resources, the parties' liability to pay severance tax must be specified in such contract:

c/ In case an exploiter conducts small-scale exploitation of natural resources and sells them to a principal purchaser that has a written commitment or an approval to declare and pay severance tax on the exploiter's behalf, the principal purchaser shall pay severance tax.

Thus, the payers of severance tax on natural water in Vietnam are any organization or individual engaged in the extraction of natural water resources.