DECREE NO. 05/2009/ND-CP DETAILING THE IMPLEMENTATION OF THE MINERAL RESOURCES TAX ORDINANCE AND THE AMENDMENT AND SUPPLEMENT TO ARTICLE 6 OF THE MINERAL RESOURCES TAX ORDINANCE

DECREE

Detailed Implementation Regulations for the Mineral Resources Tax Ordinance

and the Ordinance Amending and Supplementing Clause 6 of the Mineral Resources Tax Ordinance

___________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Mineral Resources Tax Ordinance dated April 10, 1998;

Pursuant to the Ordinance Amending and Supplementing Clause 6 of the Mineral Resources Tax Ordinance dated November 22, 2008;

Considering the proposal of the Minister of Finance,

DECREE:

PART I

SUBJECTS LIABLE FOR PAYING THE MINERAL RESOURCES TAX

Article 1. Organizations and individuals conducting natural resource exploitation in any form are taxpayers under Article 1 of the Mineral Resources Tax Ordinance.

Article 2. Natural resources within the territory, islands, inland waters, territorial seas, exclusive economic zones, and continental shelf under the sovereignty and jurisdiction of the Socialist Republic of Vietnam are taxable objects, including:

1. Metallic minerals.

2. Non-metallic minerals, including common construction materials and soil extracted for land leveling, embankment construction, raw material purposes, and other uses; mineral water, natural hot water as defined in Article 2 of the Minerals Law.

3. Crude oil as defined in Clause 2, Article 3 of the Petroleum Law.

4. Natural gas as defined in Clause 3, Article 3 of the Petroleum Law.

5. Coal gas as defined in Clause 3, Article 1 of the Law Amending and Supplementing Certain Provisions of the Petroleum Law.

6. Natural forest products include: various plants, animals, and other products from natural forests.

7. Natural aquatic products include: various animals and plants naturally occurring in the sea, rivers, streams, lakes.

8. Natural water includes: surface water, groundwater, except mineral water and natural hot water as defined in Clause 2 of this Article.

9. Other types of natural resources.

Article 3. In cases where enterprises exploiting natural resources are established based on joint ventures or business cooperation contracts, the mineral resources tax payable by the joint venture enterprise and the foreign party as stipulated in the business cooperation contract shall be included in the share allocated to the Vietnamese party. When allocating the exploitation products, the Vietnamese party is responsible for paying the mineral resources tax to the state budget according to the State Budget Law and this Decree.

Chapter II

BASIS FOR CALCULATING THE MINERAL RESOURCES TAX, TAX RATES, AND METHODS OF PAYMENT

Article 4. The basis for calculating the mineral resources tax is the actual commercial production volume of natural resources, the tax value, and the tax rate. For crude oil, natural gas, and coal gas (hereinafter referred to collectively as oil and gas), the basis for calculating the mineral resources tax is determined based on the progressive scale of the total actual production volume of oil and gas during each tax payment period calculated according to the average daily production volume of oil and gas under the oil and gas contract, the mineral resources tax rate, and the number of days of exploitation during the tax calculation period.

Article 5. The actual commercial production volume of natural resources is the quantity, weight, or volume of natural resources actually exploited during the tax payment period, regardless of the purpose of natural resource exploitation.

Article 6.

1. The tax value of the mineral resources is the unit product selling price at the place of exploitation.

a. For natural resources of the same grade and quality exploited in the same month, part of the production volume is sold at the place of exploitation at market prices, while another part is sold elsewhere or used for production, processing, screening, sorting, or selection, then the tax value of the entire production volume of natural resources is the unit product selling price at the place of exploitation excluding VAT.

b. If there is a production volume of natural resources in the month but no revenue from selling natural resources, the tax value of the unit natural resource is determined based on the tax value of the unit product of natural resources in the immediately preceding month.

2. In cases where the unit product selling price of natural resources cannot be determined as stipulated in Clause 1 of this Article, the tax value of the unit natural resource is determined based on one of the following bases:

a. The average market selling price of the same type of natural resource with equivalent value;

b. The selling price of the pure product and its content in the natural resource or the price of the pure product and the content of each component in the natural resource;

c. A percentage of the selling price of the product produced or processed from the natural resource.

3. The tax value of the mineral resources for specific cases is as follows:

a. For natural water used for hydropower production, the tax value of the mineral resources is the average selling price of commercial electricity; the tax value for mineral water and natural water used for other purposes is implemented according to point c, Clause 2 of this Article;

b. For timber, it is the selling price at the delivery site;

c. For oil and gas, the tax value of the mineral resources is determined as follows:

For crude oil, the tax value of the mineral resources is the weighted average selling price of crude oil sold at the delivery point according to the fair trade contract.

For natural gas and coal gas, the tax value of the mineral resources is the selling price at the delivery point according to the fair trade contract.

In cases where crude oil, natural gas, and coal gas are sold without a fair trade contract, the tax value is determined by the Ministry of Finance.

4. The Ministry of Finance shall provide guidance on determining the tax value of the mineral resources as stipulated in this Article.

5. Provincial People's Committees directly under the central government shall specifically determine the tax value for natural resources whose unit product selling price cannot be determined (except for oil and gas and natural water used for hydropower production) according to the guidelines of the Ministry of Finance.

Article 7.

1. The mineral resources tax rates are set forth in Appendix I and Appendix II attached to this Decree.

2. Based on the market price of each type of natural resource and management requirements for each type of natural resource in each period, the Ministry of Finance shall take the lead in coordinating with relevant ministries and sectors to submit

Article 8. Organizations and individuals exploiting natural resources shall register, declare, and pay the mineral resources tax in accordance with the laws on tax administration. Specifically for oil and gas, they shall proceed as follows:

1. Mineral resource tax on oil and gas extraction shall be paid in crude oil, natural gas, coalbed methane, in cash, or partly in cash and partly in crude oil, natural gas, or coalbed methane, as prescribed by the Ministry of Finance. The tax authority shall notify the taxpayer in writing at least six months in advance whether the mineral resource tax will be paid in cash or in oil and gas.

2. The place for paying mineral resource tax collected in crude oil, natural gas, or coalbed methane is the point of delivery. In cases where the tax authority requires payment of the mineral resource tax at another location, the taxpayer shall be allowed to deduct transportation costs and other direct costs incurred due to the change in the place of payment from the amount of mineral resource tax payable.

Chapter III

EXEMPTIONS AND REDUCTIONS OF MINERAL RESOURCE TAX

Article 9. Mineral resource tax shall be exempted or reduced in the following cases:

1. Organizations and individuals extracting mineral resources that suffer from natural disasters, enemy attacks, or unexpected accidents causing losses to declared and taxed mineral resources shall be considered for exemption of mineral resource tax payable for the lost mineral resources. If the mineral resource tax has already been paid, it shall be refunded or offset against the mineral resource tax payable in the subsequent period.

2. Organizations and individuals operating marine fishing in distant waters using large-capacity vessels shall be exempted from mineral resource tax for five years from the date of issuance of the Fishing License and have their mineral resource tax reduced by fifty percent for the next five years. After the above tax exemption and reduction period, if organizations and individuals engaged in marine fishing in distant waters still incur losses, they may continue to be considered for a reduction in mineral resource tax corresponding to the annual losses for up to five consecutive years.

3. Natural forest products extracted by individuals with permission for daily living purposes such as wood, branches, firewood, bamboo, rattan, mai, giang, tranh, vầu, lồ ô shall be exempted from mineral resource tax.

4. Natural water used for hydroelectric power production not connected to the national power grid shall be exempted from mineral resource tax.

5. Organizations and individuals extracting land for the following purposes shall be exempted from mineral resource tax:

a. Filling and constructing facilities serving security and defense;

b. Filling and constructing dike, irrigation, agricultural, forestry, and fishery facilities;

c. Filling and constructing humanitarian, charitable facilities, or preferential treatment for those who have contributed to the revolution; self-extracted and used-in-place land within the allocated or leased area;

d. Filling and constructing infrastructure facilities in mountainous areas (in districts designated as mountainous districts) to serve economic and social development in the region;

đ. Filling and constructing key national projects pursuant to decisions of the Government for specific cases.

The exemption of mineral resource tax under Clause 5 of this Article shall only apply to units extracting land without a business purpose.

Article 10. The exemption of mineral resource tax for organizations and individuals engaged in marine fishing and salt production before processing until 2010 shall be implemented according to the provisions of Clause 2, Part II of Resolution No. 47/2005/QH11 dated November 1, 2005 of the National Assembly.

Chapter IV

IMPLEMENTING PROVISIONS

Article 11. This Decree takes effect from the date of signature.

1. Repeal Decrees No. 68/1998/NĐ-CP dated September 3, 1998, and No. 147/2006/NĐ-CP dated December 1, 2006 of the Government detailing the implementation of the Mineral Resource Tax Ordinance, and Articles 44, 45, 46, and 47 of Decree No. 48/2000/NĐ-CP dated September 12, 2000 of the Government detailing the implementation of the Petroleum Law.

2. For investment projects or oil and gas contracts signed before the effective date of this Decree, if the Investment License or Oil and Gas Contract stipulates the payment of mineral resource tax, it shall be carried out according to the provisions of the Investment License or Oil and Gas Contract already signed. For oil and gas contracts not yet signed before the effective date of this Decree but have been

Article 12. The Ministry of Finance shall provide guidance on the implementation of this Decree.

The ministers, heads of ministerial-level agencies, heads of government agencies, chairpersons of provincial people's committees under central cities, and relevant organizations and individuals are responsible for implementing this Decree.