Decree No. 203/2013/NĐ-CP on the method of calculation and rate of payment for granting mineral exploitation rights

DECREE

Regulations on the method of calculation and rate of payment for granting mineral exploitation rights
The Government issues this Decree to regulate the method of calculation and rate of payment for granting mineral exploitation rights.

_____________________

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

Pursuant to the Law on Minerals dated November 17, 2010;

At the proposal of the Minister of Natural Resources and Environment,

This Decree provides detailed regulations on Clause 3, Article 77 of the Minerals Law dated November 17, 2010 of the National Assembly, Session XII regarding:

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

1. The method of calculation and rate of payment for granting mineral exploitation rights.

2. The method of collection, management, and use of payments for granting mineral exploitation rights.

1. State agencies responsible for calculating, collecting, managing, and using payments for granting mineral exploitation rights.

2. Organizations and individuals granted mining permits without participating in auctions for mineral exploitation rights.

1. Geological reserves are part or all of the mineral reserves in an area that have been surveyed and approved by competent state authorities.

Article 3. Explanation of Terms

2. Self-generated and self-consumed electricity is electricity produced and consumed by an organization or individual to serve their own needs.

2. Reserves subject to payment for granting mineral exploitation rights (Q) are geological reserves within the boundaries of the permitted exploitation area.

4. The mineral recovery factor related to the mining method (K1) is the ratio between geological reserves reduced due to mining method design and geological reserves within the permitted exploitation area.

5. The rate of payment for granting mineral exploitation rights (R) is defined as a percentage (%) of the value of raw ore in the permitted mining area. This value is determined based on geological reserves, resource tax valuation, and mineral recovery factors related to the mining method, as well as economic and social conditions.

RATE OF PAYMENT, METHOD OF CALCULATION, COLLECTION, SUBMISSION, MANAGEMENT AND USE OF PAYMENTS FOR GRANTING MINERAL EXPLOITATION RIGHTS

Chapter II
Article 4. Rate of payment for granting mineral exploitation rights (R)
The rate of payment for granting mineral exploitation rights (R) is specified according to groups and types of minerals with values from 1% to 5%, as shown in Appendix I attached to this Decree.

Payments for granting mineral exploitation rights are calculated using the following formula:

T - Payment for granting mineral exploitation rights; unit of measurement is Vietnamese dong;

Q - Reserves subject to payment for granting mineral exploitation rights, as specifically defined in Article 6 of this Decree; unit of measurement is cubic meters or tons;₁ x K₂ x R

Where:

G - Value for payment for granting mineral exploitation rights, as specifically defined in Article 7 of this Decree; unit of measurement is dong per unit of reserve;

- Mineral recovery factor related to the mining method, defined as follows: Open-pit mining K

= 0.9; Underground mining K

K₁ = 0.6; Water mineral, natural hot water, and other cases K₁ - Factor related to difficult and extremely difficult economic and social conditions applied according to the list of investment preferential areas prescribed by the Government: Mining areas in regions with extremely difficult economic and social conditions, K₁ = 0.90; Mining areas in regions with difficult economic and social conditions, K₁ = 1,0;

K₂ = 0.95; Mining areas in other regions, K₂ R - Rate of payment for granting mineral exploitation rights; unit of measurement is percentage (%).₂ = 0.95; areas for mineral exploitation in the remaining region, K₂ = 1,00;

R - The level of revenue from granting the right to exploit minerals; expressed as a percentage (%).

Article 6. Reserves for calculating the fee for granting mineral exploitation rights

The reserves for calculating the fee for granting mineral exploitation rights shall be determined according to the following cases:

1. For Mineral Exploitation Licenses issued before the effective date of the 2010 Minerals Law, the reserves for calculating the fee for granting mineral exploitation rights shall be the remaining reserves as of July 1, 2011. Specifically, they shall be determined as follows:

a) In the case where the reserves recorded in the exploitation license are geological reserves: Subtract (−) the extracted reserves converted into geological reserves from the reserves recorded in the license. Conversion of extracted reserves into geological reserves shall be carried out by dividing (:) the extracted reserves by the relevant ore recovery factor associated with the mining method.

b) In the case where the exploitation license does not record geological reserves but only records extracted reserves: Subtract (−) the extracted reserves from the reserves recorded in the license and divide (:) by the relevant ore recovery factor associated with the mining method.

c) In the case where the exploitation license records permitted resources, annual production capacity, and exploitation period, or only records annual production capacity and exploitation period: Multiply (x) the annual production capacity by the remaining period of the license and divide (:) by the relevant ore recovery factor associated with the mining method.

d) In the case where the exploitation license records product quantities (for example, the number of bricks, tiles, or other cases) and implementation time: Multiply (x) the raw material consumption rate per unit product in the investment project by the quantity of goods produced annually, multiply (x) by the remaining exploitation period of the license, and divide (:) by the relevant ore recovery factor associated with the mining method.

đ) In the case where the mineral exploitation license is for mineral water and natural hot water: Multiply (x) the permitted water flow rate in cubic meters per day-night by the remaining exploitation period of the license.

The basis for calculating the extracted reserves for the cases specified in Points a and b of this Clause shall be compiled based on the resource tax payment reports and related legal documents submitted annually by organizations and individuals.

2. For Mineral Exploitation Licenses issued after the effective date of the 2010 Minerals Law and before the effective date of this Decree: The reserves for calculating the fee for granting mineral exploitation rights shall be determined similarly to Point a, Point b, and Point đ of Clause 1 of this Article; in which the extracted reserves equal zero (0).

4. In the case of applying for an extension of a Mineral Exploitation License, organizations and individuals must pay additional fees for granting mineral exploitation rights for the portion of reserves that is larger than the reserves for which the fee for granting mineral exploitation rights has already been paid.

5. In the case where it is not possible to apply the provisions of Clauses 1, 2, 3, and 4 of this Article, an assessment of the remaining reserves shall be conducted. Costs related to the reserve assessment shall be borne by the organization or individual granted the mineral exploitation license.

6. For Mineral Exploitation Licenses issued after the effective date of this Decree, the geological reserves recorded in the license shall be the reserves for calculating the fee for granting mineral exploitation rights.

The price for granting mineral exploitation rights shall be determined based on the resource tax calculation price established and announced by the People's Committees of provinces and centrally governed cities (referred to collectively as provincial-level People's Committees), which remains valid at the time of calculating the price for granting mineral exploitation rights. Specific provisions are as follows:

1. For each type of mineral in a mining area, only one price for granting mineral exploitation rights shall be applied.

2. In cases where there are multiple types of products after mining in a mining area, each with different prices, the average value of these prices shall be applied.

3. For minerals without a resource tax calculation price or those requiring adjustment due to the price no longer being appropriate according to regulations, the Department of Natural Resources and Environment shall take the lead in working with relevant agencies to establish the price; the Department of Finance shall review and submit it to the provincial-level People's Committee for approval.

Article 8. Procedure and Documents for Calculating the Price for Granting Mineral Exploitation Rights

1. For Mining Licenses issued before this Decree takes effect:

a) Organizations and individuals holding Mining Licenses shall submit documents for calculating the price for granting mineral exploitation rights to the Vietnam General Department of Geology and Minerals and the provincial-level Department of Natural Resources and Environment within sixty days from the date this Decree takes effect, depending on the authority issuing the mining license;

b) The documents for calculating the price for granting mineral exploitation rights include:

- A self-declaration form for information on calculating the price for granting mineral exploitation rights according to Form No. 01 attached as Appendix II to this Decree: two copies.

- A copy of the Mining License: one copy.

- Annual resource tax payment reports; legal documents and evidence proving the amount of mineral reserves mined up to June 30, 2011.

2. For Mining Licenses issued without auctioning mineral exploitation rights and after this Decree takes effect, the payment of the price for granting mineral exploitation rights must be made in accordance with regulations prior to issuing the license.

Article 9. Acceptance, Calculation, and Approval of the Price for Granting Mineral Exploitation Rights

1. The Vietnam General Department of Geology and Minerals and the provincial-level Department of Natural Resources and Environment are responsible for accepting, reviewing, confirming the legality and completeness of the documents for calculating the price for granting mineral exploitation rights submitted by organizations and individuals; organizing the calculation and submitting to the Minister of Natural Resources and Environment or the Chairman of the provincial-level People's Committee for approval according to Form No. 02 and Form No. 03 attached as Appendix II to this Decree, based on the authority issuing the mining license.

2. In cases where the permitted mining area spans across provinces or districts, the price for granting mineral exploitation rights shall be divided among the areas based on the ratio of their respective areas. This division is based on the Mining License issued for each province or district.

3. The Vietnam General Department of Geology and Minerals and the provincial-level Department of Natural Resources and Environment shall send the approval document for the price for granting mineral exploitation rights to the local Tax Bureau where the mining area is located and notify the organization or individual granted the mining exploitation right.

Article 10. Notification of Payment for Mineral Exploitation Rights

Upon receiving the approval document for the payment of mineral exploitation rights, within no more than 10 (ten) working days, the local tax authority where the permitted mining area is located shall issue a notification of payment for mineral exploitation rights according to Model No. 04 attached as Appendix II to this Decree, and send it to the organization or individual granted the right to exploit minerals.

Article 11. Methods of Collecting Payment for Mineral Exploitation Rights

1. Pay in full at once with 100% of the total amount of payment for mineral exploitation rights in the following cases:

a) The remaining exploitation time in the Mining License or newly issued license is equal to or less than 05 (five) years;

b) The total value of the payment for mineral exploitation rights is equal to or less than 01 (one) billion VND.

2. Pay in installments for cases not covered under Clause 1 of this Article, as follows:

a) The amount of each installment payment is calculated as follows:

- For Mining Licenses issued before the effective date of this Decree: The first collection is made upon receipt of the notification from the competent state agency; subsequent collections are made annually (before March 31 of each following year) and completed five years before the expiration of the license. Specifically, according to the formula below:

T_hn = T: (X - 4)

T_hn - Annual payment for mineral exploitation rights; VND;

T - Total amount of payment for mineral exploitation rights to be paid; VND;

X - Remaining number of years for exploitation; years;

- For Mining Licenses issued after the effective date of this Decree: The first collection is made before issuing the Mining License; subsequent collections are made annually (before March 31 of each following year) and completed halfway through the licensing period. Specifically, according to the formula below:
T_hn = 2T: X
T_hn - Annual payment for mineral exploitation rights; VND;
T - Total amount of payment for mineral exploitation rights to be paid; VND;
X - Total number of years for exploitation; years;

b) The amount of payment from the second installment onwards must be multiplied by the ratio of price differences for calculating the payment for mineral exploitation rights. Specifically, as follows:

T_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} = T_hn x Gn : G
T_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} - Payment for the nth installment; VND;
T_hn - Annual payment; VND;
of_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.} - Price for calculating the payment for mineral exploitation rights at the time of making the nth payment; VND/unit of reserve;
G - Price for calculating the payment for mineral exploitation rights at the first payment; VND/unit of reserve;

c) During the exploitation process, organizations or individuals may request to change the number of installments and increase the amount to be paid for the remaining installments.

3. The latest time for the initial payment of the payment for mineral exploitation rights is 90 (ninety) days from the date of receipt of the notification from the local tax authority; subsequent times are no later than March 31 of each following year. After these deadlines, in addition to the amount to be paid as notified, organizations or individuals must also pay penalties as stipulated by the law on tax administration.

4. In cases where the permitted mineral reserves are large, the remaining exploitation time and average annual exploitation capacity cannot exhaust the unexploited reserves; organizations or individuals may request adjustments to the Mining License regarding capacity or reserves. The payment for mineral exploitation rights is implemented according to the current Mining License and adjusted appropriately when the replacement Mining License becomes legally effective.

Article 12. Methods for Paying the Fee for Granting the Right to Exploit Mineral Resources

1. The fee for granting the right to exploit mineral resources shall be paid as follows: 70% to the central budget and 30% to the local budget for licenses issued by the Central Government; 100% to the local budget for licenses issued by the People's Committee of the province.

2. Organizations and individuals granted the right to exploit mineral resources shall pay the fee according to the Notice of the local Tax Bureau. The collection and payment of the fee for granting the right to exploit mineral resources shall be carried out in accordance with the regulations on revenue collection and management of state budget revenues.

3. After receiving the certificate confirming payment into the state budget, organizations and individuals granted the right to exploit mineral resources shall send one copy to the Vietnam General Department of Geology and Minerals if the license was issued by the Ministry of Natural Resources and Environment, or to the Provincial Department of Natural Resources and Environment if the license was issued by the People's Committee of the province, for monitoring and supervision.

Article 13. Ensuring Funding for Basic Geological Survey Work on Mineral Resources and Protection of Unexploited Mineral Resources

Each year, the Natural Resources and Environment agency shall prepare the budget estimate for the task of basic geological survey work on mineral resources and protection of unexploited mineral resources at the time of preparing the state budget estimate, and submit it to the financial agency and the planning and investment agency. Based on the budget balance capacity and the budget estimate from the revenue source of the fee for granting the right to exploit mineral resources for the planned year according to the分级授权；财政部门根据预算平衡能力和计划年度从授予矿业权收费收入来源的预算估计，考虑并汇总分配预算资金方案，报有审批权限的机关审议决定。

Article 14. Funding for Organizing the Determination of the Fee for Granting the Right to Exploit Mineral Resources

1. The funding for organizing the determination of the fee for granting the right to exploit mineral resources shall be guaranteed by the state budget and allocated within the scope of the state budget expenditure assigned to the Natural Resources and Environment agency according to the current分级授权规定在《国家预算法》中。

2. The costs for determining the fee for granting the right to exploit mineral resources include:

a) Costs for surveying, collecting and processing data and information to calculate the fee for granting the right to exploit mineral resources, including: wages and fees according to the current system for direct labor (excluding wage costs for civil servants who have already received wages under the current system), travel expenses, accommodation, means of transportation, overtime allowances;

b) Costs for conferences, seminars, technical meetings to determine the fee for granting the right to exploit mineral resources;

c) Costs for purchasing equipment and means related to the determination of the fee for granting the right to exploit mineral resources (if any), office supplies;

d) Costs for inspecting and reviewing the results of determining the fee for granting the right to exploit mineral resources;

e) Other costs directly related to organizing the determination of the value of the fee for granting the right to exploit mineral resources.

3. The Ministry of Natural Resources and Environment and the People's Committee of the province shall be responsible for managing, using, and settling the funding for organizing the determination of the fee for granting the right to exploit mineral resources in accordance with the current system and regulations.

Chapter III
IMPLEMENTATION RESPONSIBILITY

Article 15. Responsibilities of Agencies in Calculating and Collecting the Fee for Granting the Right to Exploit Mineral Resources

1. The Vietnam General Department of Geology and Minerals shall be responsible for:

a) Leading the calculation and review of the amount of the fee for granting the right to exploit mineral resources that must be paid, submitting it for approval by the competent authority; sending the approved document on the fee for granting the right to exploit mineral resources according to the licensing authority of the Ministry of Natural Resources and Environment and the amount to be paid before December 31 each year to the local Tax Bureau where the licensed mining area is located;

b) Inspecting and supervising during the implementation of the technical methods and items of work recorded in the Exploration License for areas under the licensing authority of the Ministry of Natural Resources and Environment to ensure reliability in determining reserves and calculating the fee for granting the right to exploit mineral resources;

c) Inspecting and auditing the work of calculating the fee for granting the right to exploit mineral resources in localities;

d) Annually reporting to the Minister of Natural Resources and Environment on the nationwide collection of the fee for granting the right to exploit mineral resources; compiling and reporting

2. The Provincial Department of Natural Resources and Environment shall be responsible for:

a) Leading the calculation and review of the amount of the fee for granting the right to exploit mineral resources that must be paid, submitting it for approval by the competent authority; sending the approved document on the fee for granting the right to exploit mineral resources according to the licensing authority of the People's Committee of the province and the amount to be paid before December 31 each year to the local Tax Bureau where the licensed mining area is located;

b) Leading the preparation and adjustment of the resource tax rate for submission to the competent authority for approval and sending it to the Vietnam General Department of Geology and Minerals before October 30 each year;

c) Inspecting and supervising during the implementation of the technical methods and items of work recorded in the Exploration License for areas under the licensing authority to ensure reliability in determining reserves and calculating the fee for granting the right to exploit mineral resources;

d) Annually compiling data on the collection of the fee for granting the right to exploit mineral resources in the locality and submitting it to the People's Committee of the province, while reporting to the Ministry of Natural Resources and Environment for compilation and reporting

3. The local Tax Bureau where the licensed mining areas are located shall be responsible for:

a) Issuing notices to organizations and individuals to pay the fee for granting the right to exploit mineral resources; late payment penalties and fines according to the laws on tax administration if the deadline specified in the Notice has been exceeded (if applicable);

b) Providing information related to the payment of the fee for granting the right to exploit mineral resources to the Vietnam General Department of Geology and Minerals or the Provincial Department of Natural Resources and Environment according to the licensing authority for knowledge and monitoring;

c) Compiling, accounting, and reporting the revenue from the fee for granting the right to exploit mineral resources according to the current system.

Article 16. Responsibilities of organizations and individuals paying for mineral exploitation rights

1. Pay the fee for granting mineral exploitation rights within the deadline specified in the Notice issued by the tax authority.

2. In cases where there is a need to adjust the number of payments downward and increase the amount of each payment, a request must be made in writing using Model No. 05 attached as Appendix II to this Decree and sent to the authority issuing the exploitation permit.

3. If the fee for granting mineral exploitation rights is paid to the state budget after the prescribed deadline, in addition to the amount specified in the Notice, a fine must also be paid according to the provisions of the law on tax administration.

4. When transferring mineral exploitation rights, organizations and individuals must fulfill their obligation to pay the fee for granting mineral exploitation rights up to the transfer date.

Chapter IV
IMPLEMENTING PROVISIONS

Article 17. Effective Date

This Decree takes effect from January 20, 2014.

Repeal Article 42 of Decree No. 15/2012/NĐ-CP dated March 9, 2012 of the Government detailing certain provisions of the Law on Minerals.

Article 18. Implementation Organization

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of People's Committees of provinces and centrally-run cities, and related organizations and individuals are responsible for implementing this Decree.