What are the 07 cases of severance tax exemption and reduction in Vietnam?

What are the 07 cases of severance tax exemption and reduction in Vietnam?

Pursuant to the provisions of Article 9 of the Law on Severance Tax 2009 (amended by Clause 2, Article 4 of the Law Amending the Tax Laws 2014), cases of severance tax exemption and reduction in Vietnam include:

[1] Severance tax payers that encounter natural disasters, fires or unexpected accidents, causing losses of natural resources for which severance tax have been declared and paid, may be considered for exemption from or reduction of payable severance tax for the lost volumes of natural resources. The paid severance tax amount will be refunded or cleared against the subsequent period's payable severance tax amount.

[2] Severance tax are exempted for natural aquatic resources.

[3] Severance tax are exempted for tree branches and tops, firewood and bamboo of all kinds which individuals are permitted to exploit for their daily-life needs.

[4] Severance tax are exempted for natural water used for hydropower generation by households and individuals for their daily-life needs.

[5] Tax on natural water used by households and individuals for their everyday life is exempt..

[6] Severance tax are exempted for soil exploited and used right on allocated and leased land areas; and soil exploited for ground leveling and construction of security and military works and dikes.

[7] Others cases eligible for severance tax exemption or reduction as prescribed by the National Assembly Standing Committee.

What are the 07 cases of severance tax exemption and reduction in Vietnam? (Image from the Internet)

Which authority issues the severance taxable price schedule in Vietnam?

The severance taxable price schedule is stipulated in Clause 5, Article 6 of Circular 152/2015/TT-BTC as follows:

Taxable prices of natural resources

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dd) Tax authority shall inspect and impose taxes upon entities extracting natural resources that do not fully comply with regulations on bookkeeping. In this case, taxable extraction quantity shall depend on the inspection result; taxable prices are those imposed by the People’s Committee of the province in that period.

5. The People’s Committees of provinces shall issue a new taxable price schedule annually as follows:

5.1. The taxable price schedule shall contain information as the basis for determination of severance tax on extraction of natural resources in the province in accordance with policies and law, including: norms for use of natural resources as the basis for conversion from natural resource-derived products or industrial products into quantity of extracted natural resources in the natural resource-derived products and industrial products; corresponding taxable prices of extracted natural resources and natural resource-derived products, where:

a) Norms for use of natural resources as the basis for conversion from natural resource-derived products or industrial products into quantity of extracted natural resources in the natural resource-derived products and industrial products of enterprises in the province are determined according to the enterprises’ declaration and must be consistent with the reports made by other agencies and organizations in terms of content, quality, extraction quantity, extraction methods, and ratio of obtainment in the province where natural resources are extracted;

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Thus, the provincial People's Committee shall issue a new taxable price schedule to be implemented for the immediately following year. The taxable price schedule is issued annually.

What is the frame severance tax tariff in Vietnam?

Pursuant to Article 7 of the Law on Severance Tax 2009, the severance tax rates are specified as follows:

- The frame severance tax tariff is specified below:

- Specific severance tax rates for crude oil. natural gas and coal gas shall be determined as partially progressive based on their daily exploited average output.

- Pursuant to Clauses 1 and 2 of this Article, the National Assembly Standing Committee shall stipulate specific severance tax rates for each category of natural resource in each period on the following principles:

+ Ensuring conformity with the list of groups and categories of natural resource and within the severance tax rate bracket prescribed by the National Assembly:

+ Contributing to the state management of natural resources; protection, exploitation and rational, economical and effective use of natural resources:

+ Contributing to assuring state budget revenues and market stabilization.