What is the current frame severance tax tariff? What are the guidelines for severance tax calculation in Vietnam? – Hai Phong (Ba Ria – Vung Tau, Vietnam).
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What is severance tax? Guidelines for severance tax calculation in Vietnam (Internet image)
What is severance tax?
Severance tax is an indirect tax that organizations and individuals must pay to the State when exploiting natural resources. The royalty rate that taxpayers must pay depends on the output, taxable price and tax rate.
Severance tax-liable objects in Vietnam
According to the Law on Severance tax, severance tax-liable objects include:
- Metallic minerals.
- Non-metallic minerals.
- Crude oil.
- Natural gas, coal gas.
- Natural forest products, other than animals.
- Natural aquatic products, including marine animals and plants.
- Natural water, including surface water and groundwater.
- Natural swallow's nests.
- Other resources prescribed by the National Assembly Standing Committee.
Severance tax rates in Vietnam
The frame severance tax tariff prescribed in the Law on Severance tax is specified below:
|
No. |
Group or category of natural resource |
Severance tax rate (%) |
|
I |
Metallic minerals |
|
|
1 |
Iron and manganese |
7-20 |
|
2 |
Titan |
7-20 |
|
3 |
Gold |
9-25 |
|
4 |
Rare earths |
12-25 |
|
5 |
Platinum, silver and tin |
7-25 |
|
6 |
Wolfram and antimony |
7-25 |
|
7 |
Lead, zinc, aluminum, bauxite, copper and nickel |
7-25 |
|
8 |
Cobalt, molybdenum, mercury, magnesium and vanadium |
7-25 |
|
9 |
Other metallic minerals |
5-25 |
|
II |
Non-metallic minerals |
|
|
1 |
Soil exploited for ground leveling and work construction |
3-10 |
|
2 |
Rock, except rock used for lime baking and cement production; gravel; sand, except sand used for glass-making |
5-15 |
|
3 |
Soil used for brick-making |
5-15 |
|
4 |
Granite and refractory clay |
7-20 |
|
5 |
Dolomite and quartzite |
7-20 |
|
6 |
Kaolin, mica, technical quartz, and sand used for glass-making |
7-15 |
|
7 |
Pyrite, phosphorite, and stone for lime baking and cement production |
5-15 |
|
8 |
Apatite and serpentine |
3-10 |
|
9 |
Pit anthracite coal |
4-20 |
|
10 |
Open-cast anthracite coal |
6-20 |
|
11 |
Lignite and fat coal |
6-20 |
|
12 |
Other coals |
4-20 |
|
13 |
Diamond, ruby and sapphire |
16-30 |
|
14 |
Emerald, alexandrite and black precious opal |
16-30 |
|
15 |
Adrite, rodolite, pyrope, berine. Spinel and topaz |
12-25 |
|
16 |
Bluish-purple, greenish-yellow or orange crystalline quartz; chrysolite; white or scarlet precious opal; feldspar; birusa; and nephrite |
12-25 |
|
17 |
Other non-metallic minerals |
4-25 |
|
III |
Crude oil |
6-40 |
|
IV |
Natural gas and coal gas |
1-30 |
|
V |
Natural forest products |
|
|
1 |
Timber of group I |
25-35 |
|
2 |
Timber of group II |
20-30 |
|
3 |
Timber of groups III and IV |
15-20 |
|
4 |
Timber of groups V, VI, VII and VIII and of other categories |
10-15 |
|
5 |
Tree branches, tops, stumps and roots |
10-20 |
|
6 |
Firewood |
1-5 |
|
7 |
Bamboo of all kinds |
10-15 |
|
8 |
Sandalwood and calambac |
25-30 |
|
9 |
Anise, cinnamon, cardamom and liquorice |
10-15 |
|
10 |
Other natural forest products |
5-15 |
|
|
Natural aquatic resources |
|
|
1 |
Pearl, abalone and sea-cucumber |
6-10 |
|
2 |
Other natural aquatic resources |
1-5 |
|
VII |
Natural water |
|
|
1 |
Natural mineral water, natural thermal water and refined natural water, bottled or tinned |
8-10 |
|
2 |
Natural water used for hydropower generation |
2-5 |
|
3 |
Natural water used for production and business activities, except water mentioned at Points 1 and 2 of this group |
|
|
3.1 |
.Surface water |
1-3 |
|
3.2 |
Groundwater |
3-8 |
|
VIII |
Natural swallow's nests |
10-20 |
|
IX |
Other resources |
1-20 |
Basis and guidelines for severance tax calculation in Vietnam
* Basis for calculation of severance tax
The basis for calculation of severance tax is the taxable extraction quantity of natural resources, unit price, and tax rate.
* Guidelines for severance tax calculation
Pursuant to Clause 2, Article 4 of Circular 152/2015/TT-BTC, the severance tax payable in the period is calculated as follows:
Severance tax payable in the period = Taxable extraction quantity of natural resources x Unit price x Tax rate
In case an authority imposes a certain amount of severance tax on a unit of natural resources extracted, severance tax is calculated as follows:
Severance tax payable in the period = Taxable extraction quantity x Severance tax on a unit of natural resources extracted
Imposition of severance tax must be based on the database of tax authorities and conform to regulations on tax imposition.
Case of being exempted or reduced from severance tax in Vietnam
Severance tax payers that encounter natural disasters, fires or unexpected accidents, causing losses of natural resources for which severance tax have been declared and paid, may be considered for exemption from or reduction of payable severance tax for the lost volumes of natural resources. The paid severance tax amount will be refunded or cleared against the subsequent period's payable severance tax amount.
Severance tax are exempted for natural aquatic resources.
Severance tax are exempted for tree branches and tops, firewood and bamboo of all kinds which individuals are permitted to exploit for their daily-life needs.
Severance tax are exempted for natural water used for hydropower generation by households and individuals for their daily-life needs.
Severance tax are exempted for natural water used for agriculture, forestry, fishery and salt-making; natural water exploited by households and individuals for their daily-life needs.
Severance tax are exempted for soil exploited and used right on allocated and leased land areas; and soil exploited for ground leveling and construction of security and military works and dikes.
Others cases eligible for severance tax exemption or reduction as prescribed by the National Assembly Standing Committee.
- Key word:
- severance tax calculation in Vietnam
