What is the severance tax rate for the land used for leveling and construction of works in Vietnam?

Is the land used for leveling and construction of works subject to severance tax in Vietnam?

According to Article 10 of Circular 152/2015/TT-BTC on severance tax exemption:

Severance tax exemption

The cases of exemption from severance tax are specified in Article 9 of the Law on severance tax and Article 6 of Decree No. 50/2010/ND-CP, including:

1. Entities extracting natural marine organisms.

2. Entities extracting branches, firewood, bamboo, rattan, etc. serving everyday life.

3. Entities extracting natural water for hydroelectricity generation serving everyday life of households and individuals.

4. Natural water extracted by households and individuals serving their everyday life.

5. Land areas given/leased out to organizations and individuals and used on the spot; land used for leveling, construction of security, military works, dykes.

land extracted and used on the spot eligible for tax exemption include sand, rock, gravel in the land without specific substances and is used as is for leveling or construction. If land is transport elsewhere for use or for sale, severance tax must be paid as prescribed.

6. The Ministry of Finance shall cooperate with relevant Ministries and agencies in proposing other cases of exemption from severance tax to the government, which will be considered and decided by Standing Committee of the National Assembly.

Only land used for leveling, construction of security, military works, dykes is subject to severance tax exemption.

Therefore, the land used for leveling and construction of other works is subject to severance tax.

What is the severance tax rate for the land used for leveling and construction of works in Vietnam?

Under the tax rate schedule issued with Resolution 1084/2015/UBTVQH13, the tax rates for various types of resources, excluding crude oil and natural gas, coal gas, are as follows:

The severance tax rate of 7% shall apply to land used for leveling and construction of works.

What is the method of calculating the severance tax on land used for leveling and construction of works in Vietnam?

According to Article 4 of Circular 152/2015/TT-BTC, the basis for calculating severance tax for the land used for leveling and construction of works is stipulated as follows:

- The basis for calculating severance tax is the taxable resource output, the severance tax calculation price, and the severance tax rate.

- Determination of the severance tax payable in the period:

In cases where the State agency determines the required severance tax amount to be paid per unit of exploited resource, the severance tax payable is determined as follows:

The fixed severance tax determination is based on the tax agency’s database, in accordance with regulations on tax determination per the laws of tax management.