What are the regulations on the determination of the taxable extraction quantity of natural resources in Vietnam?

What is the basis of severance tax calculation in Vietnam?

Under Article 4 of Circular 152/2015/TT-BTC:

Basis for tax calculation

1. The basis for calculation of severance tax is the taxable extraction quantity of natural resources, severance tax-liable price, and tax rate.

2. Severance tax payable in the period

Severance tax payable in the period

=

Taxable extraction quantity of natural resources

x

severance tax-liable price

x

Tax rate

In case an authority imposes a certain amount of severance tax on a unit of natural resources extracted, severance tax is calculated as follows:

Severance tax payable in the period

=

Taxable extraction quantity

x

Severance tax on a unit of natural resources extracted

Imposition of severance tax must be based on the database of tax authorities and conform to regulations on tax imposition.

Thus, the basis for calculating the severance tax is the taxable extraction quantity, the severance tax-liable price, and the severance tax rate.

What are the regulations on the determination of the taxable extraction quantity of natural resources in Vietnam? (Image from the Internet)

What are the regulations on the determination of the taxable extraction quantity of natural resources in Vietnam?

According to Article 5 of the severance tax Law 2009, the taxable extraction quantity is determined as follows:

- For an exploited natural resource the quantity, weight or volume of which can be determined, the taxable extraction quantity is the quantity, weight or volume of natural resource actually exploited in a severance tax period.

- For an exploited natural resource the quantity, weight or volume of which cannot be determined because this natural resource contains different substances and impurities, the taxable extraction quantity shall be determined based on the quantity, weight or volume of each substance obtained from sorting and classification.

- For natural resources which are not sold but used for turning out other products, if their actually exploited quantity, weight or volume cannot be directly determined, the taxable extraction quantity shall be determined based on the output of products turned out in a severance tax period and the use norm of natural resource per unit of product.

- For natural water used for hydropower generation, the taxable extraction quantity is the output of electricity sold by a hydropower generation establishment to an electricity buyer under an electricity purchase and sale contract or the output of delivered electricity, in case such contract is unavailable, which is determined according to the metering system up to Vietnam's measurement and quality standards, certified by the purchaser and seller or the deliverer and recipient.

- For natural mineral water, natural thermal water and natural water used for industrial purposes, the taxable extraction quantity shall be determined in cubic meter On1) or liter (I) according to the metering system up to Vietnam's measurement and quality standards.

- For natural resources exploited on a manual, scattered or mobile, irregular basis, if the planned output of exploited natural resources in a year is valued at under VNI) 200 million, a fixed output of exploited natural resources may be determined on a regular or seasonal basis for severance tax calculation. Tax offices shall coordinate with local concerned agencies in determining the fixed output of exploited natural resources for severance tax calculation.

What items are subject to severance tax in Vietnam?

According to Article 2 of Circular 152/2015/TT-BTC, the items subject to severance tax prescribed in Circular 152/2015/TT-BTC, are natural resources within the land, islands, internal waters, territorial sea, contiguous zones, exclusive economic zone, and continental shelves under the sovereignty and jurisdiction of the Socialist Republic of Vietnam, including:

- Metallic minerals.

- Non-metallic minerals.

- Products of natural forests, including plants and other products of natural forests other than animals, anise, cinnamon, cardamom planted by taxpayers within the area of natural forests they are given to cultivate and protect.

- Natural aquatic organisms, including marine animals and plants.

- Natural water, including: surface water and groundwater other than natural water used for agriculture, forestry, aquaculture, salt production, and seawater used for cooling machines.

Seawater used for cooling machines mentioned in this Clause must comply with regulations on environment, effectiveness of water recirculation, and technical requirements certified by competent authorities. The act of causing pollution when using seawater or using seawater without satisfying environmental standards shall be dealt with in accordance with the legal regulations.

- Natural bird’s nests other than those collected from construction of houses to attract and raise natural swifts to collect their nest.

Bird’s nests collected from construction of houses to attract and raise natural swifts to collect their nest must comply with the legal regulations.

- The Ministry of Finance shall cooperate with relevant Ministries and agencies in reporting other natural resources to the Government.