Organizations and individuals that conduct petroleum exploration and exploitation in Vietnam must pay natural resources tax

Specifically, according to Clause 13 Article 1 of the Law amending and supplementing the Law on Petroleum in 2000 of Vietnam, natural resources tax shall be calculated according to the actual exploitation output in the taxation period for each petroleum contract.

- Natural resources tax rate for crude oil shall be set at between four percent (4%) and twenty five percent (25%).

- Natural resources tax rate for natural gas shall be set at between zero percent (0%) and ten percent (10%).

The Government of Vietnam shall prescribe specific tax rates within the tax rate bracket stipulated in this Article, depending on the geographical, economic and technical conditions of petroleum fields and crude oil or natural gas output.

Besides, the Law amending and supplementing the Law on Petroleum in 2000 also amends and supplements regulations on enterprise income tax for organizations and individuals that conduct the petroleum prospection, exploration and exploitation. To be specific:

- Organizations and individuals that conduct petroleum prospection, exploration and exploitation shall have to pay enterprise income tax at the tax rate of fifty percent (50%).

- Organizations and individuals that conduct the petroleum prospection, exploration and exploitation at petroleum investment promotion projects shall have to pay enterprise income tax at the tax rate of thirty two percent (32%).

- Organizations and individuals that conduct petroleum prospection, exploration and exploitation may be exempted from enterprise income tax for a maximum period of two (2) years and entitled to the fifty percent (50%) reduction of enterprise income tax for a maximum period of two (2) subsequent years. The exemption or reduction of enterprise income tax shall be provided for by the Government of Vietnam.

Profits for reinvestment shall not be subject to reimbursement of enterprise income tax.

View more details: The Law amending and supplementing the Law on Petroleum in 2000 takes effect from July 01, 2000.

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