Circular No. 105/2010/TT-BTC guides the implementation of certain provisions of the Law on Mineral Resources Tax and guides the implementation of Decree No. 50/2010/NĐ-CP dated May 14, 2010 of the Government detailing and guiding the implementation of certain provisions of the Law on Mineral Resources Tax.

CIRCULAR

Guidelines for implementing certain provisions of the Law on Mineral Resources Tax and guidelines for implementing Decree No. 50/2010/ND-CP dated May 14, 2010 of the Government detailing and guiding implementation of certain provisions of the Law on Mineral Resources Tax.

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Pursuant to the Law on Mineral Resources No. 45/2009/QH12 dated November 25, 2009;

Pursuant to the Petroleum Law 1993, the Law Amending and Supplementing Certain Provisions of the Petroleum Law No. 19/2000/QH10, and the Law Amending and Supplementing Certain Provisions of the Petroleum Law No. 10/2008/QH12;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006, and the Government's Decrees detailing the implementation of the Law on Tax Administration;

Pursuant to Decree No. 50/2010/ND-CP dated May 14, 2010 of the Government detailing and guiding implementation of certain provisions of the Law on Mineral Resources Tax;

Pursuant to Government Decree No. 118/2008/NĐ-CP dated November 27, 2008 stipulating the functions, powers, tasks, and organizational structure of the Ministry of Finance;

The Ministry of Finance hereby provides guidance as follows:

Part I

GENERAL PROVISIONS

Article 1. Scope of Application

This Circular guides on taxpayers; taxable objects; tax bases; exemptions and reductions of mineral resources tax, and the organization of implementing the provisions of Decree No. 50/2010/ND-CP dated May 14, 2010 of the Government detailing the implementation of the Law on Mineral Resources Tax No. 45/2009/QH12 and guiding implementation of certain provisions of the Law on Mineral Resources Tax No. 45/2009/QH12.

Activities of exploration, exploitation of crude oil, condensate (hereinafter referred to collectively as crude oil), and natural gas, associated gas, coalbed methane (hereinafter referred to collectively as natural gas) in Vietnam according to the laws on petroleum carried out by organizations and individuals (hereinafter referred to as contractors) who exploit natural resources are all within the scope of application of this Circular.

Article 2. Taxable Objects

The taxable objects under this Circular are natural resources within the territory of land, islands, inland waters, territorial seas, exclusive economic zones, and continental shelf under the sovereignty and jurisdiction of the Socialist Republic of Vietnam, including:

1. Metallic minerals;

2. Non-metallic minerals;

3. Crude oil as defined in Clause 2, Article 3 of the Petroleum Law 1993;

4. Natural gas as defined in Clause 3, Article 3 of the Petroleum Law 1993;

5. Coalbed methane as defined in Clause 3, Article 1 of the Law Amending and Supplementing Certain Provisions of the Petroleum Law 2008;

6. Products of natural forests, including various types of plants and other products of natural forests, except animals and cinnamon, cardamom, saffron, pepper planted by taxpayers in areas of natural forests designated for protection;

7. Natural marine products, including marine animals and plants;

8. Natural water, including surface water and groundwater;

9. Natural bird's nest;

10. Other natural resources as determined by the Ministry of Finance in coordination with relevant ministries and sectors to report to the Government for submission to the Standing Committee of the National Assembly for consideration and decision.

Article 3. Taxpayers

1. Taxpayers of mineral resources tax are organizations and individuals exploiting natural resources subject to mineral resources tax as stipulated in Article 2 of this Circular, including: State-owned enterprises, joint-stock companies, limited liability companies, partnerships, cooperatives, private businesses, foreign-invested enterprises, foreign parties participating in joint venture contracts, and other organizations, households, and individuals regardless of industry, scale, form of operation, who exploit natural resources according to Vietnamese law are taxpayers of mineral resources tax as stipulated in Article 3 of the Law on Mineral Resources Tax.

2. Taxpayers of mineral resources tax in certain cases are specified as follows:

2.1. In the case where a business exploiting natural resources is established based on a joint venture, the joint venture enterprise is the taxpayer;

2.2. Where both domestic and foreign parties participate in a joint venture contract for the exploitation of natural resources, the responsibility for paying taxes must be clearly defined in the joint venture contract; If the joint venture contract does not clearly define which party is responsible for paying the mineral resources tax, then all parties involved in the contract must declare and pay the mineral resources tax or designate a representative to pay the mineral resources tax of the joint venture contract.

2.3. Organizations and individuals exploiting small-scale natural resources sold to organizations and individuals acting as primary buyers, and such primary buyers agree in writing to declare and pay the mineral resources tax on behalf of the organizations and individuals exploiting the resources, then the primary buyer is the taxpayer.

Primary buyers must prepare a list of organizations and individuals exploiting small-scale natural resources that they declare and pay the mineral resources tax on behalf of, and submit it to the local tax authority managing the collection of mineral resources tax together with the declaration of substituted tax payment for the first month of purchasing activities for subsequent tax management; When there is a change in the organizations and individuals declaring and paying the substituted tax, they must prepare a supplementary declaration along with the tax declaration for the month of the change; When terminating the agency for substituted tax payment, both parties must prepare a termination document and the agent for substituted tax payment must send it to the tax authority in the month of termination.

2.4. Organizations and individuals undertaking construction contracts without resource permits but generating exploitable resource quantities during construction (such as dredging canals, ditches, lakes, ponds generating sand, soil, sludge sales; quarrying stone for construction material processing) must declare and pay the mineral resources tax to the local tax authority where the resources are exploited.

2.5. Organizations and individuals (hereinafter referred to as contractors) conducting exploration and exploitation of crude oil and natural gas in Vietnam according to the Petroleum Law shall be identified as taxpayers in each case as follows:

a) For production-sharing contracts, the taxpayer is the operator implementing the contract.

b) For joint operating contracts, the taxpayer is the joint operating company.

c) For joint venture contracts, the taxpayer is the joint venture enterprise.

d) In the case where the Vietnam National Oil and Gas Group or its affiliated companies conduct exploration and exploitation activities for crude oil and natural gas, the taxpayer is the Vietnam National Oil and Gas Group or its affiliated companies.

2.6. Organizations and individuals using water from irrigation works funded by non-state budget sources or partially by state budget sources to generate electricity shall be units required to pay resource tax and water usage fees as prescribed.

2.7. For natural resources prohibited from exploitation or illegally exploited and seized, confiscated, and permitted to be sold, the organization entrusted with selling such resources must pay the resource tax before deducting related costs associated with the seizure, auction, and awarding bonuses according to the prescribed regulations.

Part II

BASIS FOR CALCULATING RESOURCE TAX

Article 4. Basis for calculating the tax

The basis for calculating the resource tax includes the quantity of taxable natural resources, the unit price for taxation, and the rate of the resource tax, wherein the unit price for taxation is applied correspondingly to the type of taxable natural resources for the tax period.

The amount of resource tax payable is calculated as follows:

In cases where the competent state agency sets the amount of resource tax payable per unit of extracted natural resources, the amount of resource tax payable is determined as follows:

The determination of resource tax is carried out based on the database of the Tax Authority, consistent with the provisions on setting taxes for enterprises that have not fully implemented accounting records, invoices, and certificates or the provisions on handling tax violations and the taxable price as stipulated in Clause 4, Article 6 of this Circular by the Provincial People's Committee.

Article 5. Quantity of Taxable Natural Resources

The quantity of taxable natural resources is the actual quantity of natural resources extracted as prescribed in Article 5 of the Law on Resource Tax and is determined as follows:

1. For natural resources whose quantity, weight, or volume can be determined, the quantity of taxable natural resources is the actual quantity, weight, or volume of the natural resources extracted during the tax period.

For types of natural resources yielding products with different levels, qualities, and commercial values, the taxable quantity is classified according to the quantity of natural resources with the same level, quality, and commercial value or converted into a unit quantity of natural resources to serve as the basis for determining the taxable quantity for the entire extracted quantity of natural resources.

Example 1: An entity extracts rock after blasting, obtaining various sizes of rock rubble. Each grade and quality of rock obtained is classified separately to determine the taxable quantity of each type of rock. If part of the rock rubble is sold after extraction, the remaining rock rubble must be converted into rock rubble to determine the actual taxable quantity of rock rubble extracted.

2. For natural resources whose actual quantity, weight, or volume cannot be determined due to containing various substances and impurities, the quantity of natural resources is determined in certain situations as follows:

a) For natural resources that must go through screening and sorting before being sold, the quantity of taxable natural resources is determined based on the quantity, weight, or volume of each substance obtained after screening and sorting. Natural resources after screening and sorting remain in ore form, not yet transformed into other products. For soil, rocks, waste, bauxite residue... obtained through screening if sold, the taxable quantity of natural resources is determined according to each type of substance.

Example 2: For coal extracted from mines containing impurities, soil, and rocks that must be transported to screening and sorting stages before being sold, the actual quantity of coal extracted for resource tax calculation is the quantity after screening and sorting.

In cases where mining requires screening a large volume of soil and rocks (the specific quantity cannot be determined) to obtain 2 kg of gold concentrate and 100 tons of iron ore, the resource tax is calculated based on the quantity of gold concentrate and iron ore obtained. At the same time, the quantity of other types of natural resources used in mining activities, such as water used in screening and sorting, is also determined.

b) For natural resources containing various substances but not going through screening, sorting, and unable to determine the quantity of each substance when sold, the quantity of taxable natural resources for each substance is determined based on the actual quantity of natural resources extracted and the ratio of each substance within the extracted natural resources as tested according to the sample of the extracted natural resources.

Example 3: An entity extracts copper ore at a mine with a monthly extraction quantity of 1,000 tons, mixed with various substances. According to the Mining Permit and the approved mining design documents and the tested ratios of each substance in the extracted copper ore are: copper: 60%; silver: 0.2%; tin: 0.5%.

The quantity of taxable natural resources for each substance is determined as follows:

- Copper ore: 1,000 tons x 60% = 600 tons.

- Silver ore: 1,000 tons x 0.2% = 2 tons.

- Tin ore: 1,000 tons x 0.5% = 5 tons.

Based on the quantities of each substance in the copper ore already determined, the unit price for taxation of each substance is applied accordingly when calculating the resource tax as guided in Point 2.2, Clause 2, Article 6 of this Circular.

3. For natural resources not sold but used in producing other products without directly determining the actual quantity, weight, or volume extracted, the quantity of taxable natural resources is determined based on the production quantity of the product produced during the tax period and the standard usage rate of natural resources per unit of product.

The quota for resource usage must correspond to the production technology standards currently applied in manufacturing and processing products and registered by the taxpayer with the tax authority during the first tax declaration period. In cases where the resource consumption rate for producing one unit of product exceeds 5% compared to the designed production technology standard, the tax authority will cooperate with relevant agencies to review and determine the taxable resource extraction volume.

Example 4: To produce 1,000 unfired bricks, 1 cubic meter of clay is required. In a month, if the clay extraction facility produces 100,000 unfired bricks, the taxable clay extraction volume is calculated as 100,000 divided by 1,000 equals 100 cubic meters.

4. For natural water used in hydroelectric power production, the resource quantity subject to taxation is the electricity output sold by the power generation facility to the buyer according to the power purchase agreement, or the electricity exchanged without such an agreement, measured by a system meeting Vietnamese measurement quality standards, confirmed by both the buyer and seller.

5. For natural mineral water, hot natural water, and natural water used for industrial purposes, the resource quantity subject to taxation is determined in cubic meters (m3) or liters (l) based on a measurement system meeting Vietnamese measurement quality standards.

Taxpayers must install measuring equipment for the volume of extracted natural mineral water, hot natural water, and natural water used for industrial purposes as a basis for calculating taxes. The installed equipment must have a calibration certificate from the Vietnamese standard measurement quality management agency and must be reported to the tax authority along with the tax declaration form within the nearest tax declaration period following the completion of installation.

In cases where due to objective conditions it is impossible to install measuring equipment for the volume of extracted water used and the actual volume for taxation cannot be directly determined, the resource extraction volume will be allocated based on the tax period. The tax authority will cooperate with local related agencies to determine the allocated resource extraction volume for tax calculation according to the guidelines set out in Clause 6 of this Article.

6. For resources extracted manually, scatteredly, or intermittently, where the expected annual extraction volume has a value under 200,000,000 VND, the resource extraction volume will be allocated based on crop seasons or regular periods for tax calculation. The tax authority will cooperate with local related agencies to determine the allocated resource extraction volume for tax calculation.

The allocation of tax must be based on the actual extraction situation, the extraction and production process technology according to design documentation, technical standards, or the extraction volume of other organizations or individuals with similar characteristics.

The Tax Authority will base its analysis on the resource tax registration documents, technical design documentation for resource extraction, tax declaration forms, and the degree of limitation regarding resource extraction conditions to coordinate with related industry management agencies to determine the resource extraction volume and value for the year to identify the scope of allocated resource extraction subject to tax.

7. In cases where organizations or individuals sign contracts to purchase resources from small-scale resource extraction organizations or individuals and the main purchasing organization or individual commits in writing to declare and pay taxes on behalf of the sellers, the resource quantity subject to taxation is the actual purchased resource quantity.

Article 6. Resource Tax Calculation Price

The resource tax calculation price is the selling price per unit of resource product of organizations and individuals exploiting resources before including value-added tax as stipulated in Article 4 of Decree No. 50/2010/NĐ-CP, which must be reflected on sales invoices but cannot be lower than the resource tax calculation price prescribed by the provincial People's Committee; in cases where the selling price of exploited resources is lower than the resource tax calculation price prescribed by the provincial People's Committee, the resource tax shall be calculated based on the price prescribed by the provincial People's Committee. The resource tax calculation price is determined for each case as follows:

1. In cases where the selling price per unit of resource product can be determined.

1.1. The resource tax calculation price is the selling price per unit of resource product before including value-added tax (regardless of consumption area) and is applied as the tax calculation price for the entire volume of resources exploited in the month with the same grade and quality, regardless of whether part of it is transported to another place for consumption or put into production, processing, screening, sorting; the selling price of a unit of resource is calculated by dividing the total revenue (excluding VAT) of the type of resource sold by the total volume of that type of resource sold in the month.

In cases where organizations and individuals exploit resources for Groups, Corporations, Companies to concentrate at one point for consumption according to agreements between the parties, the resource tax calculation price per unit of resource shall be applied as prescribed by the provincial People's Committee in the locality where the resources are exploited according to Clause 4, Article 6 of this Circular.

1.2. In cases where there is an increase in the volume of resources exploited in the month but no revenue from selling resources is generated, the resource tax calculation price per unit of resource shall be determined based on the weighted average resource tax calculation price per unit of resource of the immediately preceding month; however, if the weighted average tax calculation price per unit of resource of the immediately preceding month is lower than the resource tax calculation price prescribed by the provincial People's Committee according to Clause 4, Article 6 of this Circular, the resource tax shall be calculated based on the price prescribed by the provincial People's Committee.

2. In cases where the selling price of exploited resources cannot be determined according to the guidance in Clause 1 of this Article, the resource tax calculation price shall be determined based on one of the following bases:

2.1. The actual selling price on the regional market of units of similar resource products with equivalent value, but not lower than the resource tax calculation price prescribed by the provincial People's Committee according to the guidance in Clause 4 of this Article.

2.2. In cases where the exploited resources contain different substances, the resource tax calculation price shall be determined based on the selling price per unit of each substance and the proportion of each substance in the exploited resources, but not lower than the resource tax calculation price prescribed by the provincial People's Committee.

Example 5: In the case where an entity exploits 1,000 tons of ore at a copper mine (following Example 3). According to the mining permit, the mining design documents, and the inspection reports approved by the competent authority, the proportions of each substance in the copper ore are as follows: copper: 60%; silver: 0.2%; tin: 0.5%. The resource tax calculation price per unit of pure substance is prescribed by the provincial People's Committee as follows: Copper: 8,000,000 VND/ton; Silver: 600,000,000 VND/ton; Tin: 40,000,000 VND/ton.

Based on the resource tax calculation price per unit of pure substance prescribed by the provincial People's Committee and the volume of each substance, the resource tax calculation price for each substance is determined specifically as follows:

- Copper ore: 600 tons x 8,000,000 VND/ton = 4,800,000,000 VND

- Silver ore: 2 tons x 600,000,000 VND/ton = 1,200,000,000 VND

- Tin ore: 5 tons x 40,000,000 VND/ton = 200,000,000 VND

Based on the resource tax calculation price for each substance contained in the copper ore, the corresponding resource tax rate for each substance is applied.

In cases where the exploited resources are processed or produced into products and by-products are obtained, the resource tax calculation price per unit of resource is applied according to the specific cases stipulated in this Article.

Example 6: In the case where during the iron ore smelting process, 0.05 tons of refined copper ore are obtained from 1 ton of pig iron and the selling price of copper is 8,500,000 VND/ton, the resource tax calculation price for 0.05 tons of copper ore is: 0.05 x 8,500,000 VND = 425,000 VND. In cases where it is not sold, the resource tax calculation price per unit of resource prescribed by the provincial People's Committee shall be applied.

2.3. Organizations and individuals exploiting resources must notify the tax authority of the method of determining the resource tax calculation price for each type of resource they exploit according to the provisions of Clause 2 of this Article, and send it once along with the tax registration form or the resource tax declaration form of the first month of exploitation. In cases where there is a change in the method of determining the resource tax calculation price, a notification must be sent to the tax authority in the month when the method changes.

3. The resource tax calculation price in certain cases is specified as follows:

3.1. The resource tax calculation price for natural water used for hydropower production is the average selling price of commercial electricity.

The average selling price of commercial electricity for calculating the resource tax for hydropower production facilities is published by the Ministry of Finance.

3.2. For wood, it is the selling price at the delivery site (warehouse or storage area at the exploitation site); in cases where the selling price at the delivery site cannot be determined, the resource tax calculation price shall be determined based on the resource tax calculation price prescribed by the provincial People's Committee according to the guidance in Clause 4 of this Article.

3.3. For resources exploited for export, it is the export price per unit of resource product (FOB basis); in cases where resources are both consumed domestically and exported, the domestic consumption portion is the selling price per unit of resource product before including value-added tax, and the export portion is the export price.

Organizations and individuals exploiting resources must separately declare the volume of resources consumed domestically and the volume of resources exported for the resource tax payable in the month and the final settlement of the resource tax according to regulations.

3.4. For crude oil and natural gas, the selling price is determined according to the provisions of Article 14 of this Circular.

3.5. For mineral water, natural hot water, and natural water used for producing products or providing services, if there is no selling price, the resource tax calculation price shall be determined by the People's Committee of the province in accordance with the guiding principles set out in Clause 4 of this Article.

4. Organizations and individuals exploiting resources but not selling them; or failing to maintain complete accounting records and accounting vouchers as prescribed; organizations and individuals shall pay the resource tax according to the fixed rate method or in cases where the quantity of resources can be determined at the exploitation stage but due to organizational models, exploitation processes, screening, and independent consumption stages, there is insufficient basis to determine the selling price of the exploited resources, the selling price of each unit of resource shall be applied as prescribed by the People's Committee of the province where the resources are being exploited for each period to calculate the resource tax.

For mineral water, natural hot water, and natural water exploited without sufficient basis to determine the resource tax calculation price per unit, the resource tax calculation price per unit shall be applied as prescribed by the People's Committee of the province according to the provisions of this clause.

Based on the characteristics and requirements for building the resource tax calculation price in the locality, the People's Committee of the province shall issue directives and assign the Department of Finance to take the lead in coordinating with the Tax Service and the Department of Natural Resources and Environment to develop a pricing plan for the resource tax calculation price to be submitted to the People's Committee of the province for decision.

The construction of the resource tax calculation price must ensure compatibility with the content, quality, quantity of the type of resource, the recovery rate of the resource, the selling price of the resource on the local market with exploitable resources, and reference prices from neighboring markets.

When the selling price of a type of resource fluctuates by 20% or more, the resource tax calculation price must be adjusted. The provincial Department of Finance shall take the lead in coordinating with the Tax Service and the Department of Natural Resources and Environment to survey the selling price situation of resources on the local market and develop an adjustment plan for the resource tax calculation price to be submitted to the People's Committee of the province for decision and reported to the Ministry of Finance (General Department of Taxation).

The tax authority directly managing the collection of the resource tax shall publicly post the resource tax calculation price per unit at the tax office premises.

Article 7. Resource Tax Rate

The resource tax rate serving as the basis for calculating the resource tax for each type of exploited resource is stipulated in the Table of Resource Tax Rates issued together with Resolution No. 928/2010/UBTVQH12 dated April 19, 2010, of the Standing Committee of the National Assembly.

Specifically, the application of the resource tax rate for mineral water, natural hot water, and natural water exploitation and use is determined as follows in Section V of the Table of Resource Tax Rates issued together with Resolution No. 928/2010/UBTVQH12 in certain cases:

- Mineral water, natural hot water, and natural water that has been purified and bottled or canned (including bottled or canned in containers that can be refilled into bottles or cans) shall apply the same resource tax rate as those bottled or canned.

- The resource tax rate applicable to natural water exploited for hydropower production at Point 2, Section V; natural water used for production and business at Point 3, Section V, which includes mineral water and natural hot water, but based on technical files and production and service supply procedures approved by the competent authorities, it is determined that they do not fall under the category of producing bottled or canned mineral water, natural hot water, or purified water, then the corresponding resource tax rate based on the purpose of use shall be applied.

Part III

REGISTRATION, TAX DECLARATION, PAYMENT, AND SETTLEMENT OF TAX

Article 8. Tax registration, tax declaration, tax payment, and final settlement of taxes.

1. Matters concerning tax registration, tax declaration, tax payment, and final settlement of taxes shall be carried out in accordance with the provisions of the Law on Tax Administration and guiding documents for the implementation of the Law on Tax Administration.

2. In particular, for activities related to exploration and exploitation of oil and gas, the following additional provisions apply:

2.1. Where an organization or individual conducts exploration and exploitation of oil and gas under multiple oil contracts, the implementation of tax regulations as guided by this Circular shall be conducted separately for each oil contract.

2.2. Where contractors participate in an oil contract in the form of a product-sharing contract or a joint operation contract, receiving shares of crude oil and natural gas according to the contract and being responsible for consuming their share of crude oil and natural gas, each party must declare and pay resource taxes based on the quantity received.

Part IV

EXEMPTIONS AND REDUCTIONS OF MINERAL RESOURCE TAX

Article 9. Exemption and reduction of resource taxes

1. Cases eligible for exemption and reduction of resource taxes as stipulated in Article 6 of Decree No. 50/2010/NĐ-CP include:

1.1. A taxpayer who suffers losses to declared and taxed resources due to natural disasters, fires, or unexpected accidents may be exempted or have their taxes reduced for the lost resources; if taxes have already been paid, they will be refunded or deducted from the resource tax payable in the next period.

1.2. Exemption of resource taxes for organizations and individuals engaged in the exploitation of natural marine products.

1.3. Exemption of resource taxes for organizations and individuals exploiting branches, leaves, firewood, bamboo, rattan, reeds, mai, giang, lồ ô, and tranh for personal use, where such exploitation is permitted by individuals.

1.4. Exemption of resource taxes for organizations and individuals exploiting natural water for household use in the production of hydropower by households and individuals for self-consumption.

1.5. Exemption of resource taxes for organizations and individuals exploiting natural water for agriculture, forestry, fisheries, salt production; natural water exploited by households and individuals for household use.

1.6. Exemption of resource taxes for organizations and individuals exploiting land and using it on-site within the allocated or leased area; land exploited for leveling, construction of security, military, dike, and flood control projects. The land exploited and used on-site as exempted herein includes sand, gravel, and pebbles mixed in the extracted land that cannot be specifically identified and used in its raw state for leveling and construction; including cases where excavated land from the allocated or leased area must be removed; if sold or exchanged for money, the exploiting organization or individual must declare and pay resource taxes as prescribed.

1.7. Other cases eligible for exemption or reduction of resource taxes shall be reported by the Ministry of Finance, in coordination with relevant ministries and sectors, to the Government for submission to the Standing Committee of the National Assembly for consideration and decision.

2. Procedures for declaring exemptions and reductions of resource taxes, and the authority to grant such exemptions and reductions, shall be implemented in accordance with the guidance provided in Section II, Part E of Circular No. 60/2007/TT-BTC dated July 14, 2007 issued by the Ministry of Finance; additionally, for certain cases exempted from resource taxes, there is no need to declare the quantity of resources exploited or the amount of tax exempted and reduced, and the procedures are as follows:

2.1. Organizations and individuals engaged in the exploitation of marine products at sea, which are exempt from resource taxes, do not need to submit monthly tax declarations and annual final settlement of resource taxes.

2.2. For natural water used for agriculture, forestry, fisheries, salt production; natural water exploited by households and individuals for household use, there is no need to submit monthly tax declarations and annual final settlement of resource taxes.

2.3. Procedure for exempting natural water used for household hydropower production by households and individuals: Households and individuals using natural water for household hydropower production must submit a request for exemption along with a statement about the equipment used for household hydropower production, confirmed by the People's Committee of the commune. When starting operations, the household must report to the directly managing tax authority to enjoy the exemption of resource taxes.

2.4. Procedure for exempting land exploitation and use on-site within the allocated or leased area:

Organizations and individuals exploiting land (including units undertaking the contract) must submit a request for exemption accompanied by a certified copy of the land allocation or lease decision and related files approved by the competent authority regarding the construction project at the local level of the investor, and send the file to the directly managing tax authority at the exploitation site for knowledge and monitoring of the exemption.

Part V

MINERAL TAX ON CRUDE OIL AND NATURAL GAS

I. SOME GENERAL PROVISIONS

Article 10. Place of Tax Registration, Declaration, and Payment

1. The place of tax registration, declaration, and payment (except for import tax and export tax) is the local tax office where the taxpayer has its main administrative office.

2. For oil and gas contracts that have commenced exploitation before this Circular takes effect, the place of declaration and payment shall be carried out according to the guiding documents prior to the effectiveness of this Circular.

Article 11. Tax Period

The mineral tax period is the Gregorian calendar year.

- The first tax period begins from the date of the initial crude oil and natural gas extraction until the end of the Gregorian calendar year.

- The final tax period starts from the beginning of the Gregorian calendar year until the last day of crude oil and natural gas extraction.

Article 12. Currency for Mineral Tax Payment

In cases where crude oil and natural gas are sold in US dollars or freely convertible foreign currencies, the currency for mineral tax payment is US dollars or freely convertible foreign currencies.

In cases where crude oil and natural gas are sold in Vietnamese dong, the currency for mineral tax payment is Vietnamese dong.

In cases where crude oil and natural gas are sold partly in US dollars or freely convertible foreign currencies and partly in Vietnamese dong, the currency for mineral tax payment is Vietnamese dong.

The conversion from US dollars or freely convertible foreign currencies to Vietnamese dong for tax payment shall be conducted based on the average exchange rate in the inter-bank foreign exchange market published by the State Bank of Vietnam at the time of tax payment.

In cases where crude oil extracted is sold to domestic oil refining units with separate guidance documents issued by the Ministry of Finance, such documents shall be followed.

II. METHODS OF CALCULATING TAX AND DECLARATION AND PAYMENT

Article 13. Quantity for Mineral Tax Calculation

1. It is the total quantity of crude oil and natural gas extracted and retained from the area covered by the oil and gas contract, measured at the point of delivery (actual quantity of crude oil and natural gas extracted).

2. In cases where the Government of Vietnam uses the associated gas of the taxpayer which is removed, not exchanged, or sold for revenue, the taxpayer does not need to pay mineral tax on this associated gas.

3. In cases where during the process of extracting crude oil and natural gas, the taxpayer is permitted to extract other resources subject to mineral tax, mineral tax shall be paid separately for each specific case as stipulated in this Circular.

Article 14. Price for Mineral Tax Calculation

1. The price for calculating mineral tax on crude oil and natural gas is the selling price at the point of delivery. The point of delivery is the agreed point in the oil and gas contract where ownership of crude oil and natural gas is transferred to the parties involved in the oil and gas contract.

2. Determining the price for calculating mineral tax on crude oil and natural gas in cases where crude oil and natural gas are not sold under arm's length transactions.

In cases where crude oil and natural gas are not sold under arm's length transactions, the tax administration authority (tax authority and customs authority) will determine the price for tax calculation according to the following principles:

- For crude oil: The tax calculation price is the average selling price of similar crude oil on the international market over three consecutive weeks: the week before, the sale week, and the week after the sale week. The taxpayer is responsible for providing the tax authority with information about the composition and quality of the crude oil being extracted. When necessary, the tax administration authority may refer to the selling prices on the US market (WTI), the UK market (Brent), or the Singapore market (Platt's) or seek the opinion of the competent state agency regarding the determination of the selling price of the crude oil being extracted by the taxpayer.

- For natural gas: The tax calculation price is the selling price of similar natural gas on the market at the point of delivery and related factors. When necessary, the tax administration authority may seek the opinion of the competent state agency regarding the determination of the selling price of the natural gas being extracted by the taxpayer.

Article 15. Determination of the amount of natural resource tax to be paid

1. The natural resource tax on crude oil and natural gas is determined based on a progressive rate applied to the total volume of crude oil and natural gas actually extracted during each tax period, calculated according to the average daily production of crude oil and natural gas under the oil and gas contract, the natural resource tax rate, and the number of days of extraction within the tax period.

2. Determining the natural resource tax payable in terms of crude oil or natural gas:

Where:

- The average volume of crude oil or natural gas subject to natural resource tax per day during the tax period is the total volume of crude oil or natural gas subject to natural resource tax extracted during the tax period divided by the number of days of extraction during the tax period.

- The natural resource tax rate: As stipulated in Point 2, Schedule of Natural Resource Tax Rates issued together with Resolution No. 928/2010/UBTVQH12 dated April 19, 2010 of the Standing Committee of the National Assembly.

The determination of encouraged investment oil and gas projects as the basis for applying the natural resource tax rate is based on the list of encouraged investment oil and gas projects prescribed by the Prime Minister.           

- The number of days of crude oil or natural gas extraction during the tax period is the number of days of crude oil or natural gas extraction activities carried out during the tax period, excluding days of production stoppage due to any cause.  

Example 7: Determining the natural resource tax payable in terms of crude oil for the case of crude oil extraction:

Assuming:

+ Total volume of crude oil subject to natural resource tax extracted during the tax payment period: 72,000,000 barrels

+ Number of production days during the tax payment period: 360 days

+ Average daily volume of crude oil subject to natural resource tax during the tax payment period: 200,000 barrels/day (72,000,000 barrels ÷ 360 days)

+ Crude oil extracted from contracts not included in the list of encouraged investment projects (in the case where crude oil is extracted from contracts included in the list of encouraged investment projects, the calculation is similar using the natural resource tax rate applicable to encouraged investment projects)

Natural resource tax payable in terms of crude oil during the tax payment period:

{(20,000 x 10%) + (30,000 x 12%) + (25,000 x 14%) + (25,000 x 19%) + (50,000 x 24%) + (50,000 x 29%)} x 360 days = 14,526,000 barrels.

Example 8: Determining the natural resource tax payable in terms of natural gas for the case of natural gas extraction:

Assuming:

+ Total volume of natural gas subject to natural resource tax extracted during the tax payment period: 3,960,000,000 cubic meters

+ Number of production days during the tax period: 360 days.

+ Average daily volume of natural gas subject to natural resource tax during the tax payment period: 11,000,000 cubic meters/day (3,960,000,000 cubic meters ÷ 360 days).

+ Natural gas extracted from contracts not included in the list of encouraged investment projects (in the case where natural gas is extracted from contracts included in the list of encouraged investment projects, the calculation is similar using the natural resource tax rate applicable to encouraged investment projects).

Natural resource tax payable in terms of natural gas during the tax payment period:

{(5,000,000 x 2%) + (5,000,000 x 5%) + (1,000,000 x 10%)} x 360 days = 162,000,000 cubic meters

Article 16. Declaration and Payment of Mineral Resources Tax Preliminary Calculation

1. Determination of the Preliminary Mineral Resources Tax Amount:

Where:

- The actual crude oil or natural gas sales volume subject to mineral resources tax is the volume of crude oil or natural gas that has been sold and is subject to mineral resources tax.

- The provisional mineral resources tax calculation price is the sale price of crude oil or natural gas at the point of delivery for each transaction under fair trade contracts, excluding value-added tax.

- The provisional mineral resources tax rate is determined as follows:

+ The estimated mineral resources tax payable in the tax period is determined according to the guidance provided in Article 15 of this Circular, based on the estimated taxable crude oil or natural gas production in the tax period and the number of days expected to be operated.

+ The estimated taxable crude oil or natural gas production in the tax period is the estimated production of crude oil or natural gas subject to mineral resources tax during the tax period.

Based on the estimated annual taxable crude oil or natural gas production and the Mineral Resources Tax Schedule for crude oil and natural gas, the taxpayer shall determine the annual provisional mineral resources tax rate and notify the local tax authority where the taxpayer is registered, and submit it along with the tax declaration form no later than December 1st of the preceding tax year.

During the tax period, if the estimated crude oil or natural gas production, or the estimated number of operating days in the last six months of the year changes, leading to an increase or decrease in the provisional mineral resources tax payment rate by 15% or more compared to the previously notified provisional mineral resources tax rate, the taxpayer shall be responsible for determining and notifying the new provisional mineral resources tax rate to the tax authority and submitting it along with the tax declaration form no later than May 1st of that year.

Example 9: Determining the Provisional Mineral Resources Tax Rate:

- Determining the provisional mineral resources tax rate for crude oil:

Assumption:

+ Total estimated taxable crude oil production in the tax period: 72,000,000 barrels.

+ Number of days expected to operate in the tax period: 360 days.

+ Average daily taxable crude oil production in the tax period: 200,000 barrels/day (72,000,000 barrels ÷ 360 days).

+ Estimated mineral resources tax payable in the tax period (determined according to the guidance provided in Article 16 of this Circular): 14,526,000 barrels..

The provisional mineral resources tax rate from crude oil exploitation is:

- Determining the provisional mineral resources tax rate for natural gas:

Assumption:

+ Total estimated taxable natural gas production in the tax period: 3,960,000,000 cubic meters.

+ Number of days of production in the tax period: 360 days.

+ Average daily taxable natural gas production in the tax period: 11,000,000 cubic meters/day (3,960,000,000 cubic meters ÷ 360 days).

+ Estimated mineral resources tax payable in the tax period (determined according to the guidance provided in Article 16 of this Circular): 162,000,000 cubic meters.

The provisional mineral resources tax rate from natural gas exploitation is:

2. Declaration and payment of provisional mineral tax:

2.1. For Crude Oil Exploitation:

2.1.1. The tax declaration form for provisional mineral resources tax is Form 01/TAIN - DK issued together with this Circular.

2.1.2. Deadline for submitting the provisional mineral resources tax declaration form: no later than the 35th day from the date of domestic sale (for crude oil sold domestically) or the date confirmed by the customs authority for crude oil export. If the 35th day falls on a Saturday, Sunday, holiday, or public holiday (hereinafter referred to as a non-working day), the deadline for submitting the provisional mineral resources tax declaration form is the next working day following the non-working day.

2.1.3. Deadline for paying provisional mineral resources tax: the same as the deadline for submitting the provisional mineral resources tax declaration form.

2.2. For Natural Gas Exploitation:

2.2.1. The tax declaration form for provisional mineral resources tax is Form 01/TAIN - DK issued together with this Circular.

2.2.3. Deadline for submitting the provisional mineral resources tax declaration form: no later than the 20th day of each month. If the 20th day falls on a Saturday, Sunday, holiday, or public holiday (collectively referred to as a non-working day), the deadline for submitting the provisional mineral resources tax declaration form is the next working day following the non-working day.

2.2.4. Deadline for paying provisional mineral resources tax: the same as the deadline for submitting the provisional mineral resources tax declaration form.

Article 17. Settlement of Mineral Resources Tax

1. For crude oil exploitation:

1.1. Determining the amount of mineral resources tax payable:

1.1.1. Determining the mineral resources tax payable in the tax period by crude oil:

1.1.2. Determining the ratio of mineral resources tax payable by crude oil to the volume of crude oil exploited during the tax period:

1.1.3. Determining the mineral resources tax payable by crude oil sold during the tax period:

1.1.4. Determining the amount payable from selling mineral resources tax by crude oil during the tax period:

Where:

+ The mineral resources tax payable by crude oil sold during the tax period is determined as guided at Point 1.1.3, Clause 1, this Article;

+ The mineral resources tax valuation price for crude oil: is the weighted average price of crude oil sold at the delivery point under fair trade contracts during the tax period, excluding value-added tax.

1.1.5. Determining the mineral resources tax payable by unsold crude oil during the tax period to serve as the basis for settling the mineral resources tax payable by crude oil for the next tax period:

In case crude oil is not sold under fair trade contracts, the mineral resources tax valuation price is determined as guided at Clause 2, Article 14 of this Circular.

Example 10: Determining the mineral resources tax valuation price:

Assuming: the volume of crude oil sold during the tax period is (4,000,000 barrels), sold in three lots: Lot 1 with a volume of 2,000,000 barrels, sold at $65/barrel; Lot 2 with a volume of 1,000,000 barrels, sold at $68/barrel; Lot 3 with a volume of 1,000,000 barrels, sold at $70/barrel.

1.1.6. Determining the amount underpaid (or overpaid) from selling mineral resources tax by crude oil during the tax period:

Where:

+ The amount payable from selling mineral resources tax by crude oil during the tax period: determined as guided at Point 1.1.4, Clause 1, this Article.

+ Provisional mineral resources tax paid during the tax period: is the total provisional mineral resources tax paid according to the Provisional Mineral Resources Tax Paid Statement (Form 02-2/TAIN-DK issued together with this Circular).

1.2. Declaration and payment of tax based on the settlement declaration form for mineral resources tax:

1.2.1. The settlement declaration form for mineral resources tax includes:

- The mineral resources tax settlement declaration form according to Form 02/TAIN-DK issued together with this Circular.

- The production volume and revenue statement for crude oil or natural gas sold during the tax period according to Form 02-1/TAIN-DK issued together with this Circular.

- The provisional mineral resources tax paid statement during the tax period according to Form 02-2/TAIN-DK issued together with this Circular.

1.2.2. Deadline for submitting the settlement declaration form for mineral resources tax:

- Not later than the 90th day from the end of the calendar year.

- Not later than the 45th day from the end date of the petroleum contract.

If the 90th or 45th day falls on a Saturday, Sunday, public holiday, or traditional festival (collectively referred to as holidays), then the deadline for submitting the settlement declaration form for mineral resources tax is the next day following the holiday.

1.2.3. Payment of tax based on the settlement declaration form for mineral resources tax:

Based on the settlement declaration form for mineral resources tax, the taxpayer determines:

- If the provisional mineral resources tax in the tax period is greater than the tax payable, the excess tax paid will be deducted from the tax payable for the next provisional mineral resources tax payment or procedures for refunding the excess tax paid will be carried out according to current laws on tax administration, if there is no subsequent provisional mineral resources tax payment period.

- If the provisional mineral resources tax in the tax period is less than the tax payable, the taxpayer must pay the remaining tax due to the State Treasury along with the submission deadline for the settlement declaration form for mineral resources tax.

2. For natural gas exploitation:

2.1. Determining the amount of mineral resources tax payable:

2.1.1. Determining the mineral resources tax payable by natural gas in the tax period:

2.1.2. Determining the amount payable from selling mineral resources tax by natural gas in the tax period:

Where:

+ The mineral resources tax payable by natural gas in the tax period: determined as guided at Point 2.1.1, Clause 2, this Article.

+ The mineral resources tax valuation price for natural gas: is the sale price under fair trade contracts at the delivery point during the tax period, excluding value-added tax.

In case natural gas is not sold under fair trade contracts, the mineral resources tax valuation price is determined as guided at Clause 2, Article 14 of this Circular.

2.1.3. Determining the amount underpaid (or overpaid) from selling mineral resources tax by natural gas in the tax period:

Where:

+ The amount payable from selling mineral resources tax by natural gas in the tax period: determined as guided at Point 2.1.3, Clause 2, this Article.

+ Provisional mineral resources tax paid during the tax period: is the total provisional mineral resources tax paid according to the Provisional Mineral Resources Tax Paid Statement (Form 02-2/TAIN-DK issued together with this Circular).

2.2. Declaration and payment of tax based on the settlement declaration form for mineral resources tax:

2.2.1. The settlement declaration form for mineral resources tax includes:

- The mineral resources tax settlement declaration form according to Form 02/TAIN-DK issued together with this Circular.

- The production volume and revenue statement for crude oil or natural gas sold during the tax period according to Form 02-1/TAIN-DK issued together with this Circular.

- The provisional mineral resources tax paid statement during the tax period according to Form 02-2/TAIN-DK issued together with this Circular.

2.2.2. Deadline for submitting the settlement declaration form for mineral resources tax:

- Not later than the 90th day from the end of the calendar year.

- Not later than the 45th day from the end date of the petroleum contract.

In case the 90th day or the 45th day falls on a Saturday, Sunday, holiday, or public holiday (collectively referred to as a non-working day), the deadline for submitting the resource tax declaration form shall be the next working day following such non-working day.

2.2.3. Payment of tax based on the final tax declaration for resource tax:

Based on the settlement declaration form for mineral resources tax, the taxpayer determines:

- If the provisional resource tax calculated for the tax period exceeds the amount of tax due, the excess tax paid shall be deducted from the tax due for the subsequent provisional tax payment, or procedures for refunding the excess resource tax paid shall be carried out in accordance with current laws on tax administration if there is no subsequent provisional tax payment period.

- If the provisional mineral resources tax in the tax period is less than the tax payable, the taxpayer must pay the remaining tax due to the State Treasury along with the submission deadline for the settlement declaration form for mineral resources tax.

Part VI

IMPLEMENTATION

Article 18. Effective Date

1. This Circular takes effect from the July 2010 tax declaration period onwards, replacing Circular No. 124/2009/TT-BTC dated June 17, 2009, issued by the Ministry of Finance guiding the implementation of Decree No. 05/2009/NĐ-CP dated January 19, 2009, of the Government detailing the implementation of the Mineral Resources Tax Ordinance and the Ordinance amending and supplementing Article 6 of the Mineral Resources Tax Ordinance, and abolishing the provisions on mineral resources tax set forth in Circular No. 32/2009/TT-BTC dated February 19, 2009, of the Ministry of Finance guiding the implementation of tax regulations applicable to organizations and individuals conducting exploration and exploitation activities of oil and gas in accordance with the Petroleum Law.

For quantities of resources extracted before July 1, 2010, but not yet consumed or incorporated into subsequent production or processing processes, the resource tax shall still be declared in accordance with the provisions of existing laws on resource tax prior to July 1, 2010.

2. For investment projects or oil and gas contracts signed before July 1, 2010, where the Investment License, Investment Certificate, or oil and gas contract specifies the resource tax, such provisions shall be followed. In cases where the resource tax incentives specified in the Investment License, Investment Certificate, or oil and gas contract are lower than those stipulated in this Law, the incentives under this Law shall apply for the remaining period.

During implementation, if difficulties arise, organizations and individuals are requested to promptly report them to the Ministry of Finance for timely research and resolution./.