Cases of amendments to the taxable price bracket for for calculating severance tax in Vietnam as of July 15, 2024

Cases of amendments to the taxable price bracket for for calculating severance tax in Vietnam as of July 15, 2024 (Internet image)

Regarding this issue, LawNet answers as follows:

On May 20, 2024, the Minister of Finance issued Circular 41/2024/TT-BTC amending Circular 44/2017/TT-BTC on imposing the taxable price brackets for groups/types of natural resources with similar physical and chemical properties and Circular 152/2015/TT-BTC providing guidance on severance tax in Vietnam (effective from July 15, 2024).

Cases of amendments to the taxable price bracket for for calculating severance tax in Vietnam as of July 15, 2024

Cases of amendments to the taxable price bracket for for calculating severance tax in Vietnam inlcude:

- The price of common natural resources decreases by more than 20% compared to the minimum price of the taxable price bracket;

- The price of common natural resources increases by more than 20% compared to the maximum price of the taxable price bracket;

- There is a new type of natural resource that has yet been specified in the taxable price bracket.

(Clause 1, Article 6 of Circular 44/2017/TT-BTC, amended in Circular 41/2024/TT-BTC)

Guidelines for amendments to the taxable price bracket for for calculating severance tax in Vietnam as of July 15, 2024

The amendments to the taxable price bracket for for calculating severance tax in Vietnam as of July 15, 2024 will be implemented as follows:

- Where the price of common natural resources decreases by more than 20% compared to the minimum price of the taxable price bracket, the Provincial People’s Committee shall submit a document to the Ministry of Finance of Vietnam to provide information enclosed with specific presentation proposals, documents, and schemes for use as the basis for considering adjusting the taxable price bracket. The Provincial People’s Committee shall only promulgate a taxable price schedule or a document on adjustments to the taxable price schedule after the Ministry of Finance of Vietnam has adjusted the taxable price bracket.

- Where the price of common natural resources decreases by 20% or less compared to the minimum price or increases by 20% or less compared to the maximum price of the taxable price bracket, the Department of Finance shall take charge and cooperate with relevant authorities in determining and requesting the Provincial People’s Committee to promulgate a taxable price schedule or a document on adjustments to the taxable price schedule.

- Where the price of common natural resources increased by more than 20% compared to the maximum price of the taxable price bracket, the Department of Finance shall take charge and cooperate with relevant authorities in determining and requesting the Provincial People’s Committee to promulgate a taxable price schedule or a document on adjustments to the taxable price schedule.  After promulgating a taxable price schedule or a document on adjustments to the taxable price schedule, the Provincial People’s Committee shall send a document to the Ministry of Finance of Vietnam to provide information enclosed with specific presentation proposals, documents, and schemes for used as the basis for considering adjusting the taxable price bracket.

- Where there is a new type of natural resource that has yet been specified in the taxable price bracket, the Department of Finance shall take charge and cooperate with relevant authorities in determining and requesting the Provincial People’s Committee to promulgate a taxable price schedule or a document on additions to the taxable price schedule for such a type of natural resource based on its common transaction price or selling price.

After promulgating a taxable price schedule or a document on additions to the taxable price schedule, the Provincial People’s Committee shall send a document to the Ministry of Finance of Vietnam to provide information enclosed with specific presentation proposals, documents, and schemes for used as the basis for considering making additions to the taxable price bracket.”

(Clause 2, Article 6 of Circular 44/2017/TT-BTC, amended in Circular 41/2024/TT-BTC)

Taxable price bracket for calculating severance tax in Vietnam

Taxable price bracket shall contain:

- Code of a group/type of natural resource: the number of group/type in the price bracket, composed of 6 levels, numbered and arranged in accordance with group/type specified in the Standing Committee of National Assembly’s resource royalties schedule (except crude oil, natural gas and coal gas) at specific periods as follow:

+ Level 1 includes groups of natural resources specified in Point 1 of Resolution 1084/2015/UBTVQH13 represented by the roman numerals.

+ Level 2 includes more specific groups/types of natural resources of level 1 specified in Point 1 of the Resolution 1084/2015/UBTVQH13 represented by 2-digit numbers after those of the corresponding level 1 group.

+ Level 3 includes more specific groups/types of natural resources of level 2; each group/type is represented by 2-digit numbers after those of the corresponding level 2 group.

+ Level 4 includes more specific groups/types of natural resources of level 3; each group/type represented by 2-digit numbers after those of the corresponding level 3 groups.

+ Level 5 includes more specific groups/types of natural resources of level 4; each group/type represented by 2-digit numbers after those of the corresponding level 4 groups.

+ Level 6 includes more specific groups/types of natural resources of level 5; each group/type represented by 2-digit numbers after those of the corresponding level 4 groups.

- Name of group/type of natural resources: the names of group/type of level 1, 2 and a number of level 3 natural resources are determined according to the name of group/type of natural resources in the resource royalties schedule enclosed together with the Resolution No. 1084/2015/UBTVQH13; the names of groups/types of level 3, 4, 5 natural resources are determined in consideration of the names of groups/types of natural resources and products derived from natural resources nationwide.

- The unit of measurement is determined as the unit of measurement defined by law or the common unit of measurement of the resource.

- Maximum price, minimum price.

(Clause 2, Article 4 of Circular 44/2017/TT-BTC)

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