Shall petrol and oil be eligible for a 50% environmental protection tax reduction in Vietnam in 2025?

Shall petrol and oil be eligible for a 50% environmental protection tax reduction in Vietnam in 2025?

Pursuant to Article 1 of Resolution 60/2024/UBTVQH15, the environmental protection tax rates for petrol, oil, and lubricants from January 1, 2025, to December 31, 2025, are stipulated as follows:

(1) Petrol, excluding ethanol: 2,000 VND/liter.

(2) Aviation fuel: 1,000 VND/liter.

(3) Diesel oil: 1,000 VND/liter.

(4) Kerosene: 600 VND/liter.

(5) Fuel oil: 1,000 VND/liter.

(6) Lubricating oil: 1,000 VND/liter.

(7) Lubricating grease: 1,000 VND/kg.

Thus, it can be seen that in 2025 from January 1, 2025, to December 31, 2025, the environmental protection tax on petrol and oil will continue to be reduced by 50% compared to the Tax Schedule specified in Section 1, Clause 1, Article 1 of Resolution 579/2018/UBTVQH14.

Shall petrol and oil be eligible for a 50% environmental protection tax reduction in Vietnam in 2025? (Image from internet)

When is the environmental protection tax calculated for petrol and oil in Vietnam?

Pursuant to Article 6 of Circular 152/2011/TT-BTC, the time for calculating the environmental protection tax is regulated as follows:

Time for Tax Calculation

1. For goods manufactured and sold, exchanged, gifted, promotional, or advertised, the tax calculation time is the time of transfer of ownership or the right to use the goods.

2. For internally used manufactured goods, the tax calculation time is when the goods are put into use.

3. For imported goods, the tax calculation time is when the customs declaration is registered, except for imported petrol and oil for sale as regulated in Clause 4 of this Article.

4. For petrol and oil manufactured or imported for sale, the tax calculation time is when the focal point enterprise sells the petrol and oil.

Thus, the time for calculating the environmental protection tax on petrol and oil manufactured or imported for sale is determined as when the focal point enterprise sells the petrol and oil.

What are regulations on declaration and payment of environmental protection tax on petrol and oil in Vietnam?

Based on point 2.2, Clause 2, Article 7 of Circular 152/2011/TT-BTC, supplemented by Article 4 of Circular 159/2012/TT-BTC, the declaration and payment of environmental protection tax on petrol and oil is regulated as follows:

Key petrol and oil trading companies must register, declare, and pay the environmental protection tax into the state budget at the local tax office where they declare and pay value-added tax, specifically:

- Key petrol and oil trading companies that directly import, produce, process petrol and oil (collectively known as focal point units) declare and pay tax at the locality where their head office is located for the volume of petrol and oil these units directly export and sell, including exports for internal use, exchanges for other goods, returns of imports under commission import, and sales to other organizations and individuals outside the focal point unit’s system (including companies in which the focal point unit holds a stake of 50% or less); excluding volumes exported and sold and imported under commission for other key petroleum trading companies.

- Independent accounting member units under the focal point unit; branches under the focal point unit; joint-stock companies in which the focal point unit holds a controlling stake (more than 50%) or branches under these member units and branches under the above-mentioned joint-stock companies (collectively known as member units) declare and pay tax at the locality where their headquarters are located for the volume they export and sell to organizations and individuals outside their system.

- Other organizations directly importing, producing, and processing petrol and oil declare and pay tax at the local tax office where value-added tax is declared and paid when exporting and selling petrol and oil.

- In cases where petrol and oil are used as raw materials for blending biofuel but have not declared and paid the environmental protection tax, upon exporting biofuel, the biofuel selling unit must declare and pay the environmental protection tax as regulated.

- In cases where petrol, oil, or lubricants are imported for other purposes not for sale; lubricating oil and grease are individually packaged upon import with materials, parts for aircraft, or with machinery and equipment, the taxpayer declares and pays the environmental protection tax to the customs office.

- Petrol and oil are exported and sold according to the quantity recorded on invoices and documents of export or sale, and the taxpayer must declare and pay the environmental protection tax according to the quantity recorded on those invoices and documents.

Who Are the Payers of Environmental Protection Tax?

According to Article 3 of Circular 152/2011/TT-BTC, those who are required to pay environmental protection tax are specified as follows:

- Payers of environmental protection tax are organizations, households, and individuals that produce or import goods subject to tax as defined in Article 1 of Circular 152/2011/TT-BTC.

- Specific cases for payers of the environmental protection tax are outlined as follows:

+ Individuals or organizations entrusted with importing goods are taxpayers, regardless of the form of entrusted import and delivery to the entrusting party or entrusted import.

+ Organizations, households, and individuals that manufacture, receive processing, and are entrusted to sell goods into the Vietnamese market are taxpayers. In cases where the organization, household, or individual is only a processor and not entrusted to sell, the entity that contracts the processing is the taxpayer when the goods are exported or sold in Vietnam.

+ In cases where organizations, households, or individuals are the focal point in collecting small-scale exploited coal, and cannot present documents proving the goods have paid the environmental protection tax, they are the taxpayers.