What is the basis for calculating severance tax in Vietnam?

What is the basis for calculating severance tax in Vietnam?

According to Article 4 of Circular 152/2015/TT-BTC the regulations are as follows:

Basis for Tax Calculation

1. The basis for calculating severance tax is the taxable resource production, taxable resource value, and severance tax rate.

2. Determination of payable severance tax in the period

Payable severance tax in the period = Taxable resource production x Unit price of taxable resource x severance tax rate

In the case that the state authority determines the amount of severance tax payable per unit of extracted resource, the payable severance tax is calculated as follows:

Payable severance tax in the period = Taxable resource production x Prescribed amount of severance tax per unit of extracted resource

The determination of severance tax is based on the tax authority's database, in accordance with the tax determination regulations under the law on tax management.

Thus, the basis for calculating severance tax is the taxable resource production, taxable resource value, and severance tax rate.

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

Which entities are subject to severance tax in Vietnam?

According to Article 2 of Circular 152/2015/TT-BTC, the entities subject to severance tax include natural resources within the territories of land, islands, inland waters, territorial waters, contiguous zones, exclusive economic zones, and continental shelf under the sovereignty and jurisdiction of the Socialist Republic of Vietnam, including:

- Metallic minerals.- Non-metallic minerals.- Products of natural forests, including various types of plants and other products of natural forests, except animals and star anise, cinnamon, cardamom which are planted by taxpayers in assigned natural forest areas for nurturing and protection.- Natural aquatic resources, including marine animals and plants.- Natural water, including surface water and groundwater, except natural water used for agriculture, forestry, aquaculture, salt production, and seawater used for cooling machinery.

Seawater used for cooling machinery must meet environmental requirements, water circulation efficiency, and specialized economic-technical conditions confirmed by the competent state authority. If the use of seawater causes pollution and does not meet environmental standards, it will be handled according to regulations.

- Natural bird's nests, except bird's nests obtained by organizations or individuals from investment activities in building houses to attract natural birds for breeding and exploitation.

Bird's nests obtained by organizations or individuals from investment activities in building houses to attract natural birds for breeding and exploitation must comply with regulations.

- Other natural resources as determined by the Ministry of Finance in coordination with relevant Ministries and sectors to report to the Government for submission to the Standing Committee of the National Assembly for consideration and decision.

What is the severance tax rate in Vietnam?

According to Article 7 of the Law on severance tax 2009, the severance tax rates are stipulated as follows:

- The table of severance tax rates is as follows:

- The specific tax rates for crude oil, natural gas, and coal gas are determined progressively based on the average daily extraction output.

- Based on the provisions in clauses 1 and 2, Article 7 of the Law on severance tax 2009, the Standing Committee of the National Assembly stipulates specific tax rates for each type of resource during each period to ensure the following principles:

+ In line with the group and type of resource list and within the tax rate range defined by the National Assembly;

+ Contributing to state management of resources; protecting, exploiting, using rationally, economically, and efficiently the resource;

+ Contributing to ensuring state budget revenue and market stability.