Vietnam: Which budget does the environmental protection fee on extraction of natural gas go into?

Vietnam: Which budget does the environmental protection fee on extraction of natural gas go into?

Based on Clause 3, Article 8 of Decree 27/2023/ND-CP, the provisions are as follows:

Declaration, payment, management, and use of fees

1. Declaration and payment of environmental protection fees for mineral extraction shall be in accordance with the provisions of the law on tax management.

2. The environmental protection fee on mineral extraction (excluding crude oil, natural gas, coal gas) is a local budget revenue, enjoying 100%, managed and used according to the State Budget Law.

3. The environmental protection fee on crude oil, natural gas, coal gas is a central budget revenue, enjoying 100%, managed and used according to the State Budget Law.

Based on the above-stated regulation, the environmental protection fee on crude oil, natural gas, coal gas is a central budget revenue, enjoying 100%, managed and used according to the State Budget Law.

Vietnam: Which budget does the environmental protection fee on extraction of natural gas go into? (Image from Internet)

What is the environmental protection fee rate for extraction of natural gas in Vietnam?

Based on Clause 1, Article 6 of Decree 27/2023/ND-CP, the fee rates for environmental protection in extraction of natural gas are specified as follows:

Fee rate

1. The fee rate for environmental protection regarding crude oil extraction: 100,000 VND/ton; for natural gas, coal gas: 50 VND/m3. As for natural gas obtained during crude oil extraction (associated gas): 35 VND/m3.

2. The fee rate for environmental protection for mineral extraction (including cases of production and business activities of organizations, individuals not for mineral extraction but obtaining minerals) according to the fee schedule issued with this Decree.

3. The fee rate for environmental protection in activities of mineral salvage extraction according to mineral law is 60% of the fee rate for the corresponding mineral specified in the fee schedule issued with this Decree.

4. Based on the principles for determining fee rates stipulated in the Law on Fees and Charges, the fee schedule issued with this Decree, and referring to the fee rates of localities with similar mineral extractions subject to fees, the provincial People's Councils decide on specific fee rates, units of calculation for environmental protection fees applicable to each type of mineral in the locality in accordance with the actual situation in each period.

Thus, according to the above regulations, the environmental protection fee rate for extraction of natural gas is 50 VND/m3.

As for natural gas obtained during crude oil extraction (associated gas): 35 VND/m3.

Who must pay the environmental protection fee on extraction of natural gas in Vietnam?

Based on Article 4 of Decree 27/2023/ND-CP, the provisions on fee payers are as follows:

Fee payers

Environmental protection fee payers for mineral extraction under this Decree include:

1. Organizations, individuals extracting minerals as prescribed by mineral law.

2. Vietnamese or foreign organizations, individuals permitted to extract crude oil, natural gas, coal gas based on petroleum contracts or providing petroleum services in accordance with the petroleum law.

3. Organizations, individuals permitted to extract small-scale minerals sold to institutions, individuals acting as focal point collectors and the institutions, individuals acting as focal point collectors commit in writing to declare and pay fees on behalf of the extracting organizations, individuals, then the focal point collector is the fee payer.

The subjects required to pay the environmental protection fee on extraction of natural gas are Vietnamese or foreign organizations, individuals permitted to extract crude oil, natural gas, coal gas based on petroleum contracts or providing petroleum services in accordance with the petroleum law.

What are the cases exempted from environmental protection fees for extraction of natural gas in Vietnam?

Based on Article 5 of Decree 27/2023/ND-CP, provisions on cases exempted from environmental protection fees for extraction activities are specified as follows:

- Activities of extracting minerals for common construction materials within the land area under the land use rights of households, individuals to construct household, individual structures within that area.

- Activities of extracting soil, rock for leveling, constructing security, military works, disaster prevention, and disaster recovery. In cases where extracted soil, rock is used both for leveling, constructing security, military works, disaster prevention and recovery, and for other purposes, organizations, individuals are responsible for determining the volume of soil, rock exempted; the amount used for other purposes must pay environmental protection fees for mineral extraction.

- Using stripped soil, waste soil and rock from extraction processes to rehabilitate, restore the environment at the extraction site according to the environmental rehabilitation plan approved by competent authorities.

The determination of the quantity of stripped soil, waste soil, and rock exempted from environmental protection fees is based on:

+ Minutes of acceptance of volume of each extraction technology phase including: Soil preparation, excavation, transport, rock disposal as prescribed at point b, Clause 2, Article 41 Decree No. 158/2016/ND-CP.

+ Environmental rehabilitation plan approved by competent state agencies as prescribed in Clause 3, Article 67 Law on Environmental Protection.

+ Mine closure dossier approved by competent state agencies according to the provisions of mineral law.