Is seafood caught by fishermen in the coastal communes subject to royalty in Vietnam?

Is seafood caught by fishermen in the coastal communes subject to royalty in Vietnam?

According to Clause 7, Article 2 of Decree No. 50/2010/ND-CP, amended by Clauses 1 and 2, Article 4 of Decree No. 12/2015/ND-CP, the regulations are as follows:

Subjects of Taxation

The subjects of royalty are implemented according to the provisions of Article 2 of the Law on severance tax, including:

1. Metallic minerals.

2. Non-metallic minerals.

3. Crude oil as regulated in Clause 2, Article 3 of the 1993 Petroleum Law.

4. Natural gas as regulated in Clause 3, Article 3 of the 1993 Petroleum Law.

5. Coal gas as regulated in Clause 3, Article 1 of the Law on Amendments and Supplements to a Number of Articles of the 2008 Petroleum Law.

6. Products from natural forests, including types of plants and other forest products, excluding animals and anise, cinnamon, cardamom planted by taxpayers in the natural forests allocated for zoning and protection.

7. Natural seafood, including marine animals and plants.

8. Natural water, including surface water and groundwater, except natural water used for agriculture, forestry, aquaculture, salt production, and seawater for cooling machines.

The seawater used for cooling machines stipulated in this Clause must meet environmental requirements, the efficiency of the circulating water use, and specialized technical and economic conditions.

The Ministry of Finance presides over cooperating with relevant Ministries to guide seawater for cooling machines that are not subject to royalty as prescribed in this clause.

9. Natural bird’s nest, except bird’s nest collected by organizations and individuals from the investment in house construction to attract natural birds to settle and exploit.

10. Other severances as presided over by the Ministry of Finance in cooperation with relevant Ministries and sectors to report to the Government of Vietnam to submit to the Standing Committee of the National Assembly for consideration and decision.

Accordingly, based on the above regulations, the subjects liable for royalty include natural seafood, which encompasses marine animals and plants. Thus, it can be seen that regardless of the coastal communes or other areas, natural seafood remains subject to taxation.

Is seafood caught by fishermen in the coastal communes subject to royalty in Vietnam? (Image from the Internet)

In case the selling price has not been determined, must the royalty be calculated according to market's actual selling price in Vietnam?

According to Clause 2, Article 4 of Decree No. 50/2010/ND-CP, the regulation is as follows:

Royalty-liable prices

The royalty base is executed according to the provisions of Article 6 of the Law on severance tax, specifically:

1. The royalty base is the selling price of a unit of severance product exploited by organizations or individuals, excluding value-added tax.

2. In cases where the severance price has yet to be determined, the royalty base is determined according to one of the following bases:

a) The actual selling price in the regional market within the local branch of the same type of severance product but not lower than the tax base determined by the provincial People's Committee;

b) In cases where the mined severance contains many different components, the tax base is determined according to the unit price of each component and the content of each component in the exploited severance, but not lower than the tax base determined by the provincial People's Committee.

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Thus, if the severance price has yet to be determined, the royalty base is determined according to one of the above provisions, like the actual market selling price or in cases where mined severances contain multiple components, the tax base is calculated according to the unit price and content of each component in the exploited severance but not lower than the tax base determined by the provincial People's Committee.

Therefore, it is not arbitrarily calculated based on market prices, but it can be implemented through another method, like determining according to the unit price and content of each component in the exploited severance.

What are reneral regulations on the taxable severance output in Vietnam?

According to Article 5 of the 2009 Law on severance tax, the regulations on taxable severance output are as follows:

- For identified extracted severances based on quantity, weight, or volume, the taxable severance output is the actual quantity, weight, or volume of severances exploited during the tax period.

- For extracted severances where the actual quantity, weight, or volume of exploitation cannot be identified due to diverse components and impurities, the taxable severance output is determined by the quantity, weight, or volume of each component obtained after screening, sorting.

- For severances extracted and not sold but used in producing other products, if the actual quantity, weight, or volume of extraction cannot be directly determined, the taxable severance output is determined based on the production output in the tax period and the severance usage norm calculated per unit of product.

- For natural water used in hydroelectricity production, the taxable severance output is the electricity output sold by the hydroelectric production facility to the electricity buyer under the sale contract or the electricity output delivered in case of no sale contract, determined according to the measurement system meeting the Vietnamese quality measurement standards, with confirmation from the buyer, seller, or deliverer, receiver.

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

- For severances extracted manually, dispersedly, or extracted intermittently, if the forecasted annual value is below 200,000,000 VND, the extracted severance output is determined on a quota basis seasonally or periodically for tax calculation. Tax authorities cooperate with relevant local agencies to determine the allocated extracted severance output for tax calculation.