Ordinance No. 05/1998/PL-UBTVQH10 on Mineral Resources Tax (amended)

ORDINANCE

Amended Law on Resource Tax

To contribute to the protection, exploitation, and rational use of resources in a thrifty and effective manner, thereby protecting the environment and ensuring revenue for the State budget;

Pursuant to the Constitution of the Socialist Republic of Vietnam in 1992;

Pursuant to the Resolution of the Xth National Assembly, second session, on the legislative program for 1998;

This Ordinance stipulates the provisions on resource tax;

PART I
SUBJECTS LIABLE FOR AND PAYING THE RESOURCE TAX

Article 1

1- Natural resources within the territory of Vietnam, including islands, inland waters, territorial seas, exclusive economic zones, and the continental shelf, all belong to the entire people and are uniformly managed by the State.

2- All organizations and individuals exploiting natural resources as specified in Clause 1 of this Article are liable to pay the resource tax, except those specified in Article 3 of this Ordinance.

Article 2

The subjects liable for the resource tax under this Ordinance include:

1- Metallic mineral resources;

2- Non-metallic mineral resources, including common construction materials; excavated land; mineral water, natural hot water;

3- Oil;

4- Natural gas;

5- Natural forest products;

6- Natural aquatic products;

7- Natural water, excluding mineral water and natural hot water as provided for in Clause 2 of this Article;

8- Other natural resources.

Article 3

In cases where Vietnam participates in joint ventures with foreign countries according to the Law on Foreign Investment in Vietnam by contributing capital through resources, the joint venture does not have to pay the resource tax for the amount of resources that Vietnam uses as statutory capital contribution.

PART II
BASIS FOR CALCULATING THE RESOURCE TAX AND THE RATE OF THE RESOURCE TAX

Article 4

The basis for calculating the mineral resources tax is the actual commercial quantity of resources extracted, the taxable price, and the tax rate.

Article 5

The taxable value for the resource tax is the selling price per unit of resource product at the place of extraction.

In cases where extracted resources do not have a selling price, the Government shall specify the taxable value for the resource tax.

For natural water used to produce hydroelectric power, the taxable value for the resource tax is the selling price of commercial electricity.

Article 6

The rate of the resource tax is specified as follows:

Based on this tax rate table, the Government shall specify the specific tax rates for each type of resource.

CHAPTER III
REGISTRATION, DECLARATION, AND PAYMENT OF THE RESOURCE TAX

, Clause 1, Clause 2 Article 7a of this Regulation.

Organizations and individuals exploiting resources are responsible for:

1- Declaring and registering with the tax authority according to the prescribed form within ten days from the date they are permitted to commence resource extraction activities.

In cases of merger, consolidation, division, spin-off, dissolution, bankruptcy, or changes in resource extraction operations, organizations and individuals exploiting resources must report to the tax authority at least five days before such events occur.

2- Adhering fully to the accounting records, invoices, and ledgers as prescribed by the State for each type of subject.

3- Declaring the resource tax payable monthly to the tax authority within the first ten days of the following month; if no resource tax arises in a month, the resource extraction entity still must declare and submit the tax declaration form to the tax authority. Organizations and individuals exploiting resources must declare fully, accurately according to the prescribed tax declaration form and bear responsibility for the accuracy of their declarations.

4- Providing accounting books, vouchers, invoices, and other relevant documents upon request by the tax authority.

5- Paying the resource tax fully and on time into the State budget according to the tax payment notice issued by the tax authority. The deadline for tax payment noted in the notice shall not exceed the 25th day of the following month.

Article 8

The tax authority shall have the following duties, powers, and responsibilities:

1- Guiding resource extraction entities to implement the registration, declaration, and payment system for the resource tax;

2- Notifying resource extraction entities of the amount of resource tax payable and the deadline for payment;

3- Inspecting and auditing the declaration, payment, and settlement of the resource tax by resource extraction entities;

4- Imposing administrative penalties for tax violations and resolving complaints about the resource tax;

5- Requesting taxpayers to provide accounting books, invoices, vouchers, and other related documents necessary for calculating and paying the resource tax; requesting financial institutions, banks, and other related organizations and individuals to provide documents related to the calculation and payment of the resource tax;

6- Retaining and using data and documents provided by resource extraction entities and other parties according to prescribed regulations.

Article 9

1- The tax authority has the right to determine the amount of resource tax payable by organizations and individuals exploiting resources in the following situations:

a) Failure to comply with or non-compliance with accounting records, invoices, and vouchers;

b) Failure to declare or exceeding the declared deadline without compliance; having submitted a tax declaration but declaring inaccurately the basis for determining the amount of resource tax;

c) Refusal to present accounting books, invoices, vouchers, and other necessary documents related to the calculation of the resource tax;

d) Exploiting resources without business registration and being discovered.

2- The tax authority bases its determination of the amount of tax payable on investigation materials regarding the operation of resource extraction by organizations and individuals, or based on the tax payable by similar organizations and individuals engaged in the same type of resource extraction with comparable scale.

If disagreeing with the determined amount of tax payable by the tax authority, organizations and individuals exploiting resources have the right to appeal to the higher-level tax authority; during the appeal process, they must continue to pay taxes according to the determined amount.

PART IV
EXEMPTIONS AND REDUCTIONS OF MINERAL RESOURCE TAX

Article 10

Organizations and individuals exploiting resources are exempted or granted tax reductions in the following circumstances:

1- Investment projects falling within the preferential investment objects prescribed in the Law on Encouragement of Domestic Investment that exploit natural resources (except oil and gas) shall be entitled to a maximum reduction of 50% in natural resource tax for the first three years from the date of commencement of exploitation;

2- Organizations and individuals exploiting natural resources affected by natural disasters, enemy actions, or unexpected calamities causing losses to the amount of natural resources declared and taxed shall be exempted from tax on the quantity of natural resources lost;

3- Exploitation of marine products in distant sea areas using large-capacity vessels shall be exempted from natural resource tax for the first five years and granted a 50% reduction in natural resource tax for the next five years. In cases where difficulties persist, further reductions in natural resource tax may be considered for an additional period of one to five years. For cases that have commenced exploitation of marine products in distant sea areas before this Ordinance takes effect, the exemption and reduction periods shall commence from the date this Ordinance becomes effective and shall be calculated according to the prescribed exemption and reduction periods;

4- Natural forest products such as branches, tops, firewood, bamboo, and rattan directly used by individuals for daily household needs shall be exempted from tax;

5- Water resources used for hydropower production that does not integrate into the national power grid shall be exempted from natural resource tax;

6- Land exploited for leveling, construction of security and defense works; humanitarian and charitable works; construction of dike, water conservancy, and road transportation projects, and other specific purposes as prescribed by the Government shall be exempted from tax;

The Government shall provide detailed regulations on the exemptions and reductions of taxes stipulated in this Article;

CHAPTER V
VIOLATION HANDLING AND REWARD

Article 11

Organizations and individuals exploiting natural resources who violate the Ordinance on Natural Resource Tax shall be subject to the following penalties:

1- Failure to comply with registration, declaration, payment, accounting system, and retention of vouchers and invoices as prescribed in Article 7 of this Ordinance shall result in administrative fines for tax violations depending on the nature and severity of the violation;

2- Late payment of taxes or fines beyond the prescribed due date shall require full payment of the tax and fine amounts, plus a daily penalty of 0.1% (one-thousandth) of the overdue amount;

3- False declaration of taxes or tax evasion shall require full payment of the tax as prescribed by this Ordinance, along with a fine ranging from one to five times the amount of fraudulent tax, and criminal prosecution if the tax evasion involves large quantities or if the violator has previously been administratively fined for tax violations or engaged in serious misconduct;

4- Failure to pay taxes or fines as notified or decided by the tax authority shall be handled as follows:

a) Funds deposited by organizations and individuals exploiting natural resources at banks, state treasuries, or credit institutions shall be deducted to cover tax and fine payments. Banks, state treasuries, and credit institutions shall deduct funds from the accounts of taxpayers to cover tax and fine payments to the State budget according to the tax authority's decision or authorized body prior to debt collection;

b) Seize goods or evidence to ensure the full recovery of tax and fine amounts;

c) Attach assets in accordance with the law to ensure the full recovery of outstanding tax and fine amounts.

Article 12

1- The head of the tax authority directly responsible for tax collection may handle violations by natural resource tax payers as prescribed in Clauses 1, 2, and 3 of Article 11 of this Ordinance;

2- The Director of the Tax Department or the Director of the Tax Branch directly responsible for tax collection may apply the handling measures prescribed in Clause 4 of Article 11 of this Ordinance and transfer case files to competent authorities for legal proceedings in cases of violations as prescribed in Clause 3 of Article 11 of this Ordinance;

Article 13

1- Tax officials or other individuals who abuse their positions or powers to illegally use or embezzle tax or fine money must fully compensate the State for all illegally used or embezzled tax and fine amounts and shall be subject to disciplinary action or criminal prosecution depending on the nature and severity of the violation;

2- Tax officials or other individuals who lack responsibility or make errors leading to losses for taxpayers must compensate for the losses according to the law and shall be subject to disciplinary action or criminal prosecution depending on the nature and severity of the violation;

3- Tax officials or other individuals who abuse their positions or powers to collude or shield violators of the Ordinance on Natural Resource Tax or engage in other violations of this Ordinance shall be subject to disciplinary action or criminal prosecution depending on the nature and severity of the violation;

4- Individuals obstructing or inciting others to obstruct the enforcement of the Ordinance on Natural Resource Tax shall be subject to administrative penalties or criminal prosecution depending on the nature and severity of the violation;

Article 14

Tax authorities and tax officials who successfully complete assigned tasks; organizations and individuals who achieve results in implementing the Ordinance on Natural Resource Tax; and taxpayers who fulfill their tax obligations well shall be rewarded;

The Government shall specify the details of rewards.

Chapter VI
APPEALS AND STATUTE OF LIMITATIONS

Article 15

Taxpayers have the right to lodge complaints about tax officials or tax authorities failing to implement the Ordinance on Natural Resource Tax correctly;

Complaints must be submitted to the tax authority directly responsible for tax collection within thirty days from the date of receipt of the notification or decision of the tax official or tax authority;

While awaiting resolution, taxpayers must continue to comply with the notification or decision of the tax authority. If they continue to lodge complaints, they must follow current legal provisions;

Article 16

1- Upon receiving a tax complaint, the tax authority must examine and resolve it within fifteen days from the date of receipt of the complaint; for complex cases, this period may be extended but not exceed thirty days; if the matter falls outside its jurisdiction, the tax authority must transfer the file or report to the competent authority for resolution and inform the complainant within ten days from the date of receipt of the complaint.

2- The tax authority receiving a complaint has the right to request the complainant to provide relevant documents and files related to the complaint. If the complainant refuses to provide documents and files without a legitimate reason, the tax authority has the right to refuse to consider and resolve the complaint.

3- The tax authority must refund the amount of tax and fines collected incorrectly to the taxpayer within fifteen days from the date of receipt of the decision of the higher-level tax authority or the competent authority as prescribed by law.

4- If fraud, tax evasion, or tax errors are discovered and concluded, the tax authority shall be responsible for recovering taxes and fines or refunding taxes within five years from the date of inspection and discovery of such fraud, tax evasion, or tax errors. In cases where organizations or individuals exploiting resources fail to declare and pay taxes, the recovery period for taxes and fines starts from the date the business begins operations.

5- The head of the higher-level tax authority shall be responsible for resolving tax complaints of taxpayers against lower-level tax authorities.

The decision of the Minister of Finance resolving tax appeals is the final decision.

Chapter VII
IMPLEMENTATION

Article 17

The Government directs the implementation of the Mineral Resources Tax Ordinance throughout the country.

Article 18

The Minister of Finance shall be responsible for organizing the implementation and supervising the enforcement of the Mineral Resources Tax Ordinance throughout the country; resolving complaints and suggestions regarding mineral resources tax within his jurisdiction.

Article 19

People's Committees at all levels, within their respective duties and powers, shall direct the implementation and supervise the compliance with the Mineral Resources Tax Ordinance in their localities.

Chapter VIII
IMPLEMENTING PROVISIONS

Article 20

The amended Mineral Resources Tax Ordinance takes effect from June 1, 1998, and replaces the Mineral Resources Tax Ordinance issued on March 30, 1990.

For foreign-invested enterprises and foreign parties conducting business cooperation based on contracts signed before the issuance of this Ordinance, if they have exploited resources and paid resource fees or mineral resources tax as stipulated in the investment license, they shall comply with those provisions.

Article 21

The Government shall provide detailed regulations and guidance for the implementation of this Ordinance./.