Which entities are taxpayers declaring tax on the entire extraction quantity in the month in Vietnam?

Which entities are taxpayers declaring tax on the entire extraction quantity in the month in Vietnam?

Based on Article 9 of Circular 152/2015/TT-BTC, the regulations are as follows:

Tax declaration and settlement for mineral extraction activities

1. Organizations and business households exploiting resources are responsible for notifying the tax authorities of the tax valuation method for each type of resource exploited, along with the severance tax declaration dossier of the first month of exploitation. In case of changing the tax valuation method, a notification must be sent to the directly managing tax authority in the month of change.

2. Monthly, taxpayers must declare taxes on the entire extraction quantity in the month (regardless of inventory or being in the process of processing).

3. When settling taxes, taxpayers must prepare a detailed schedule attached to the annual tax settlement declaration, detailing the volume of resources exploited throughout the year for each respective mine license. severance tax is determined based on the tax rate of the respective exploited resource type corresponding to the volume and tax valuation as follows:

a) Taxable resource volume is the total volume of resources exploited during the year, regardless of inventory or being in the process of processing or transportation.

In the case of sales including both resource products and industrial products, the resources contained in both the resource products and industrial products must be converted based on resource usage norms independently determined by the taxpayer.

b) The tax valuation is the average selling price per unit of resource product, determined by dividing the total revenue from resource sales by the total volume of resources sold in the corresponding year.

Thus, taxpayers must declare taxes on the entire extraction quantity in the month without distinguishing between inventory or being in the process of processing.

Which entities are taxpayers declaring tax on the entire extraction quantity in the month in Vietnam? (Image from the Internet)

Which entities are taxpayers for resource extraction in Vietnam?

Based on Article 3 of Circular 152/2015/TT-BTC, the regulations are as follows:

Taxpayer

A severance taxpayer is an organization or individual exploiting resources subject to severance tax as stipulated in Article 2 of this Circular. A severance taxpayer (hereinafter referred to as a taxpayer - NNT) in certain cases is specified as follows:

1. For mineral resource extraction, the taxpayer is an organization or business household granted a Mineral Extraction License by a competent state authority.

In the case of an organization granted a Mineral Extraction License by a competent state authority, allowed to cooperate with other organizations or individuals for resource extraction and with specific provisions on taxpayers, the severance taxpayer shall be determined based on those documents.

In the case of an organization granted a Mineral Extraction License by a competent state authority and then, in writing, assigns it to affiliated units for resource extraction, each extracting unit shall be the severance taxpayer.

2. A resource extraction enterprise established on the basis of a joint venture shall be the joint venture enterprise as the taxpayer.

In the case of Vietnamese and foreign parties collectively implementing a business cooperation contract for resource extraction, tax responsibility must be clearly defined in the business cooperation contract; If the business cooperation contract does not specify the taxpayer for severance tax, all contracting parties must declare and pay severance tax or appoint a representative to pay severance tax on behalf of the business cooperation contract.

3. Organizations or individuals undertaking construction contract work during which exploitable resource volumes arise and are allowed by state management agencies or not contrary to the provisions of resource management law to extract or consume shall declare and pay severance tax to the local tax authority where the resource extraction arises.

4. Organizations or individuals using water from irrigation works for electricity generation are severance taxpayers under this Circular, regardless of the investment source for the irrigation work.

In the case of an organization managing an irrigation work that supplies water to other organizations or individuals for domestic water production or other purposes (except for electricity generation), the management organization of the irrigation work shall be the severance taxpayer.

5. Natural resources prohibited from extraction or illegally extracted and confiscated, subject to severance tax and allowed for sale, shall be declared and paid by the assigned sales organization on a per-incident basis to the tax authority directly managing the sales organization before deducting relevant expenses pertaining to seizure, auction, or reward as per policies.

Thus, based on the regulations, the taxpayer for mineral resource extraction is the organization or business household granted a Mineral Extraction License by a competent state authority.

How to determine the payable severance tax in the period according to the formula in Vietnam?

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

- The basis for calculating severance tax is the taxable resource volume, tax valuation of resources, and severance tax rate.

- Determining payable severance tax in the period

In case the state authority imposes a severance tax rate per resource unit extracted, the payable severance tax shall be determined as follows:

The imposition of severance tax is based on the tax authority’s data, in compliance with the provisions on tax imposition according to the law on tax administration.