Vietnam: What are the regulations on environmental protection tax?

What are the regulations on environmental protection tax in Vietnam?

Under the provision in Clause 1, Article 2 of the Law on Environmental Protection Tax 2010, environmental protection tax means indirect-collected tax, collected on products and goods (hereafter referred to as goods) when used to cause negative environmental impacts

Environmental taxation is a form of restriction on products or activities that are not beneficial to the environment.

According to the provisions of Article 3 of the Law on Environmental Protection Tax 2010, taxable subjects comprise the following 08 groups of goods: gasoline, coal, hydro-chloro-fluoro-carbon solution (HCFC solution), plastic bags subject to tax, herbicides, preservatives for forestry products, warehouse disinfectants, and termite control products under restricted use.

Note: In cases deemed necessary to supplement other taxable subjects appropriate for each period, the Standing Committee of the National Assembly of Vietnam shall consider and prescribe.

Additionally, according to the provision in Article 136 of the Law on Environmental Protection 2020, environmental protection tax applies to products and goods whose use causes negative environmental impacts or environmental pollutants.

The environmental protection tax rate is determined based on the extent of negative environmental impact. The promulgation and implementation of regulations on environmental protection tax are conducted according to the law on taxes.

What are the regulations on environmental protection tax in Vietnam?(Image from the Internet)

What is the environmental protection in Vietnam?

Under Clause 2, Article 3 of the Law on Environmental Protection 2020, “environmental protection activity” means preventing and reducing adverse impacts on the environment; responding to environmental emergencies; mitigating environmental pollution and degradation, improving environmental quality; reasonably using natural resources and biodiversity, and adapting to climate change.

Moreover, according to Article 136 of the Law on Environmental Protection 2020, environmental protection fees on discharge of waste into the environment; mineral mining or creation of adverse impacts on the environment; public services in the field of environmental protection in accordance with regulations of law on fees and charges.

Environmental protection fees shall be determined according to the amount and toxicity of pollutants released into the environment, characteristics of the waste receiving environment; levels of adverse impacts of mineral mining activities on the environment; nature of public services in the field of environmental protection.

What is the List of environmental protection activities eligible for Incentives and assistance in Vietnam?

Under Appendix 30, List of environmental protection Activities eligible for Incentives and assistance, issued together with Decree 08/2022/ND-CP, the subjects eligible for incentives and support include organizations and individuals investing in environmental protection projects; production, business, and service activities related to environmental protection in sectors and industries prioritized for investment. Specifically, the List of environmental protection Activities eligible for Incentives and assistance is as follows:

- Investment projects in the sectors and industries of waste collection, treatment, recycling, or reuse, including:

+ Treatment and disposal of solid waste (trash);

+ Collection of solid waste (trash);

+ Collection and treatment of wastewater;

+ Recycling or reuse of waste.

- Enterprises producing, providing technology, equipment, products, and services meeting environmental protection requirements, including:

+ Providing waste treatment technologies that combine with energy recovery, energy-saving technologies assessed or appraised or commented on as per regulations on technology transfer;

+ Providing services for the treatment of domestic wastewater; co-processing of solid domestic waste; ambient environmental monitoring services;

+ Production of clean energy; renewable energy; environmental monitoring equipment;

+ Production and provision of domestic wastewater treatment equipment for household-scale production and businesses; eco-friendly products and services certified with Vietnam’s Eco-label by the Ministry of Natural Resources and Environment;

+ Products produced from waste recycling and treatment activities meeting product quality regulations;

+ Production of public transport vehicles, excluding public transport vehicles using oil; production of vehicles using electricity, renewable energy, low fuel consumption, low emissions, or no emissions; public transport services using electric energy, clean fuels, and renewable fuels.

- Environmental protection activities not classified as investment or business activities, including:

+ Technology renovation, improvement, and upgrade of waste treatment facilities to meet the roadmap prescribed by competent state authorities according to environmental protection regulations; ...

+ Relocation of households from centralized production, business, service, and industrial clusters;

+ Relocation of active facilities to ensure safe environmental distances or to meet the roadmap prescribed by competent state authorities according to environmental protection regulations;

+ Investment in developing regenerable natural capital, providing natural ecosystem services; protecting natural heritage;

+ Research and development of systems for collecting and treating floating plastic waste in seas and oceans;

+ Treatment and improvement of the environment at solid domestic waste landfills.

Download the List of environmental protection activities eligible for Incentives and assistance.