What is the basis for calculating environmental protection tax in Vietnam?

What is the basis for calculating environmental protection tax in Vietnam?

According to Article 6 of the Law on Environmental Protection Tax 2010, the basis for calculating environmental protection tax is regulated as follows:

- Tax base of environmental protection is the taxable quantity of goods and the absolute tax amount.

- The taxable quantity of goods shall be provided for as follows:

+ For goods produced in the country, the taxable quantity of goods is the quantity of goods produced and sold, exchanged, internally consumed, donated;

+ For imported goods, the taxable quantity of goods is the quantity of imported goods.

- absolute tax amount for tax calculation specified in Article 8 of the Law on Environmental Protection Tax 2010.

In addition, the basis for calculating environmental protection tax is further detailed in Article 5 of Circular 152/2011/TT-BTC as follows:

The basis for calculating environmental protection tax is the taxable quantity of goods and the absolute tax amount.

- The quantity of taxed goods is specified as follows:

+ For domestically produced goods, it is the quantity of produced goods which are sold, exchanged, used for internal consumption, donated, or used for sales promotion or advertising.

+ For imported goods, it is the quantity of imported goods.

In case the quantity of goods subject to environmental protection tax sold and imported is calculated in a unit of measurement other than the unit of tax calculation specified in the Environmental Protection Tariff issued by the National Assembly Standing Committee, the former unit must be converted into the latter for tax calculation.

+ For mixed fuel containing petrol, oil or grease of fossil origin and bio-fuel, the quantity of taxed goods in a period is the quantity of petrol, oil or grease of fossil origin contained in the quantity of mixed fuel imported or produced which is sold, exchanged, donated or used for internal consumption, converted into the unit of measurement specified for tax calculation applicable to relevant goods. The method of determination is as follows:

Under competent agencies' technical standards on processing of mixed fuel (even in case of change in the percentage (%) of petrol, oil or grease of fossil origin contained in mixed fuel), taxpayers shall themselves calculate, declare and pay environmental protection tax for the quantity of petrol, oil or grease of fossil origin; and concurrently notify tax offices of the percentage (%) of petrol, oil or grease of fossil origin contained in mixed fuel and submit such notices together with tax declaration forms of the month following the month in which mixed fuel is sold (or which sees change in the percentage of petrol, oil or grease of fossil origin contained in mixed fuel).

* Point 1.4 in Clause 1 Article 5 is supplemented by Article 3 of Circular 159/2012/TT-BTC effective from November 15, 2012

+ For multilayer plastic bags produced or processed from single plastic films HDPE, LDPE, LLDPE, and other plastic films (PP, PA,...) or other substances like aluminum, paper, etc., the environmental protection tax is determined based on the percentage weight of the single plastic film HDPE, LDPE, LLDPE in the multilayer plastic bags. Based on the norm quantity of single plastic film HDPE, LDPE, LLDPE used for producing or processing multilayer plastic bags, manufacturers or importers of multilayer plastic bags self-declare, and take responsibility for their declarations.

Example 8: Enterprise A produces or imports 100 kg of multilayer plastic bags, where the weight of single plastic films HDPE, LDPE, LLDPE in the multilayer plastic bags is 70% and the weight of other plastic films (PA, PP,...) is 30%.

Thus, the environmental protection tax enterprise A must pay for 100 kg of multilayer plastic bags is: 100 kg x 70% x 40,000 VND/kg = 2,800,000 VND.*

- The absolute tax amount used as a basis for calculating environmental protection tax for each type of goods is the tax rate stipulated in the Environmental Protection Tax Rate Schedule issued together with Resolution 1269/2011/NQ-UBTVQH12 dated July 14, 2011, by the Standing Committee of the National Assembly.

*Clause 2 of Article 5 is amended by Article 1 of Circular 60/2015/TT-BTC effective from May 01, 2015 (Document expired: January 01, 2019)

The absolute tax amount used as a basis for calculating environmental protection tax for each type of goods subject to environmental protection tax is the tax rate stipulated in the Environmental Protection Tax Rate Schedule issued together with Resolution 1269/2011/UBTVQH12 (Expired and replaced by Resolution 579/2018/UBTVQH14) and Resolution 888a/2015/UBTVQH13 dated March 10, 2015, by the Standing Committee of the National Assembly, amending and supplementing Resolution 1269/2011/UBTVQH12 (Expired and replaced by Resolution 579/2018/UBTVQH14) on the schedule of environmental protection tax rates.*

*The content amending Clause 2 of Article 5 in Circular 60/2015/TT-BTC is now amended by Article 1 of Circular 106/2018/TT-BTC effective from January 01, 2019.

The absolute tax amount used as a basis for calculating environmental protection tax for each type of goods subject to environmental protection tax is the tax rate stipulated in the Environmental Protection Tax Rate Schedule issued together with Resolution No. 579/2018/UBTVQH14 dated September 26, 2018, by the Standing Committee of the National Assembly regarding the schedule of environmental protection tax rates.*

What is the basis for calculating environmental protection tax in Vietnam? (Image from Internet)

What is the method of calculating environmental protection tax​ in Vietnam?

According to Article 7 of the Law on Environmental Protection Tax 2010, the amount of environmental protection tax payable equal the quantity of unit of dutiable goods multiply absolute rate specified on a unit of goods.

Are individuals in Vietnam required to pay environmental protection tax in cases subject to tax payment?

According to Article 5 of the Law on Environmental Protection Tax 2010 on environmental protection taxpayers:

- Environmental protection taxpayer is organizations, households and individuals producing, importing goods under taxable subject provided for in Article 3 of Law on Environmental Protection Tax 2010.

- Environmental protection taxpayer in some specific cases shall be provided for as follows:

+ in case of goods importing commission, the person who entrusted importing goods shall be taxpayer;

+ In cases where organizations, households and individuals act procurement hub of coal to develop small, retail but they can not produce the documents proving that goods have been paying environmental protection tax, the organizations, households individuals act as procurement hub shall be taxpayer.

Thus, individuals responsible for paying environmental protection tax are organizations, households, and individuals producing or importing taxable goods as stipulated in Article 3 of the Law on Environmental Protection Tax 2010.