Vietnam: What is the Latest Law on Severance tax in 2025?
What is the latest Law on Severance tax in 2025?
On November 25, 2009, the National Assembly passed the Law on Severance tax 2009, which officially came into effect on July 1, 2010, replacing the Severance tax Ordinance 1998, amended by the Ordinance amending Article 6 of the Severance tax Ordinance 2008.
As of now, no document has replaced this Law, so the most recent Law on Severance tax in 2025 being applied is the Law on Severance tax 2009, amended and supplemented by:
- Law amending the Laws on Tax 2014;
What are Decrees and Circulars guiding the Law on Severance tax in 2025?
Below is a compilation of the Decrees and Circulars guiding the latest Law on Severance tax in 2025 (Law on Severance tax 2009) still in effect:
- Decree 50/2010/ND-CP guiding the Law on Severance tax 2009;
- Decree 12/2015/ND-CP guiding the Law amending and supplementing a number of articles of the Laws on Tax and amending and supplementing a number of articles of the Decrees on Tax;
- Circular 152/2015/TT-BTC guiding the Severance tax;
(This Circular is effective from November 20, 2015, and replaces Circular 105/2010/TT-BTC guiding the Law on Severance tax and Decree 50/2010/ND-CP)
- Circular 174/2016/TT-BTC amending point a, clause 4, Article 6 of Circular 152/2015/TT-BTC guiding the Severance tax
- Circular 12/2016/TT-BTC amending clause 1, Article 7 of Circular 152/2015/TT-BTC guiding the Severance tax;
- Circular 41/2024/TT-BTC amending Circular 44/2017/TT-BTC stipulating the price framework for calculating the Severance tax for groups or types of resources with similar physical and chemical properties and Circular 152/2015/TT-BTC guiding the Severance tax.
Additionally, there is Resolution 1084/2015/UBTVQH13 dated December 10, 2015, by the Standing Committee of the National Assembly on the issuance of the Schedule of Severance tax Rates.
What is the Latest Law on Severance tax in 2025? (Image from the Internet)
Which entities are severance taxpayers in Vietnam in 2025?
According to Article 3 of Circular 152/2015/TT-BTC, persons obligated to pay Severance tax in 2025 are organizations and individuals exploiting resources subject to Severance tax as prescribed in Article 2 of Circular 152/2015/TT-BTC.
Taxpayers (hereinafter referred to as taxpayers - NNT) in specific cases are defined as follows:
- For mineral resource extraction activities, the taxpayer is the organization or household business granted a Mineral Extraction License by a competent state authority.
If an organization is granted a Mineral Extraction License by a competent state authority, authorized to cooperate with other organizations or individuals for resource extraction, and there are specific provisions regarding the taxpayer, the Severance taxpayer is determined according to that document.
If an organization granted a Mineral Extraction License by a competent state authority subsequently issues a document assigning resource extraction to affiliated units, each extracting unit is a Severance taxpayer.
- A resource-extracting enterprise established on the basis of a joint venture shall be the taxpayer itself;
If the Vietnamese side and the foreign side jointly perform a business cooperation contract for resource extraction, the tax payment responsibility must be specifically determined in the business cooperation contract;
If the business cooperation contract does not specifically identify the side responsible for paying the Severance tax, all parties involved in the contract must declare and pay the Severance tax or appoint a representative to pay the Severance tax for the business cooperation contract.
- Organizations or individuals contracting for construction projects during the construction process generating resource output, whether permitted by the state management agency or not contrary to laws on resource management and exploitation, when exploiting, using, or consuming, must declare and pay Severance tax at the local tax office where the resource is extracted.
- Organizations or individuals using water from hydraulic works to generate electricity are Severance taxpayers as prescribed in this Circular, regardless of the investment source for the hydraulic works.
If the organization managing the hydraulic works supplies water to other organizations or individuals for domestic water production or other purposes (except for electricity generation), the organization managing the hydraulic works is the taxpayer.
- For prohibited or illegally extracted resources that are confiscated, subject to Severance tax, and permitted for sale, the organization assigned to sell must declare and pay the Severance tax per occurrence at the tax authority directly managing the organization assigned to sell the resources before deducting costs related to capture, auction, and reward deductions according to specified policies.
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