Guidance on surcharge declaration and payment of the volume of oil divided as profit to petroleum contractors when the price of crude oil increases in Vietnam

Guidance on surcharge declaration and payment of the volume of oil divided as profit to petroleum contractors when the price of crude oil increases in Vietnam (Internet image) 

Article 7 of Circular 22/2010/TT-BTC stipulates surcharge declaration and payment of the volume of oil divided as profit to petroleum contractors when the price of crude oil increases in Vietnam as follows:

1. Determination of temporarily calculated surcharge amounts:

- For a petroleum project eligible for investment promotion, the temporarily calculated surcharge amount payable on a quarterly basis shall be determined as follows:

In which:

• The volume of oil divided as temporarily calculated profit to the contractor on a quarterly basis determined under the petroleum law is that temporarily calculated at the time of taking the oil share, using the net oil output available for taking in the quarter estimated on the basis of the quarter's exploitation plan.

• Other items shall still be determined under the guidance in Clause 1, Article 6 of this Circular.

- For a petroleum project ineligible for investment promotion, the temporarily calculated surcharge amount payable on a quarter basis at a partially progressive rate shall be determined as follows:

+ In case the average sale price of crude oil in the quarter actually increases by between more than 20% and 50% over the base price:

+ In case the average sale price of crude oil in the quarter actually increases by more than 50% over the base price:

In which:

• The volume of oil divided as temporarily calculated profit to the contractor on a quarterly basis determined under the petroleum law is that temporarily calculated at the time of taking the oil share, using the net oil output available for taking in the quarter estimated on the basis of the quarter's exploitation plan.

• Other items shall still be determined under the guidance in Clause 2. Article 6 of this Circular.

2.  Declaration and payment of temporarily calculated surcharge amounts:

- Based on the crude oil output planned to be exploited annually and volume of oil divided as temporarily calculated profit on a quarterly basis, the base price of a year and the average sale price of crude oil in the previous quarter, a surcharge payer shall assess the temporarily calculated surcharge amount payable for the quarter according to the declaration of temporarily calculated surcharge, made according to a set form (not printed herein), and submit the dossier to the local tax office where its tax registration is made no later than the 30,h day of the subsequent quarter. In case such deadline falls on a Saturday. Sunday, public holiday or new year festival (below collectively referred to as weekend or holiday), the deadline for submitting the dossier of declaration of temporarily calculated surcharge is the day following such weekend or holiday. In case the period for calculating the surcharge payable for the first quarter or the last quarter is equal to or less than I month, such period may be added to the subsequent quarter or the last quarter for surcharge calculation to make up a full quarter for surcharge calculation.

- The deadline for payment of temporarily calculated surcharge is that for submission of the dossier of declaration of the temporarily calculated surcharge specified at this Point.

More details can be found in Circular 22/2010/TT-BTC, which comes into force from March 29, 2010.

Nguyen Phu

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