Circular No. 42/2007/TT-BTC guiding the implementation of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the Mineral Resources Tax Ordinance (amended) and Decree No. 147/2006/NĐ-CP dated December 1, 2006 of the Government amending and supplementing certain Articles of Decree No. 68/1998/NĐ-CP mentioned above.

CIRCULAR

Guidelines for Implementing Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government

detailing the implementation of the Mineral Resources Tax Ordinance (amended) and Decree No. 147/2006/NĐ-CP

dated December 1, 2006 of the Government amending and supplementing certain Articles of Decree No. 68/1998/NĐ-CP mentioned above

__________________________________

Pursuant to the amended Mineral Resources Tax Ordinance issued by the Standing Committee of the National Assembly on April 16, 1998;

Pursuant to Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the amended Mineral Resources Tax Ordinance;

Pursuant to Decree No. 147/2006/NĐ-CP dated December 1, 2006 of the Government amending and supplementing certain Articles of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the amended Mineral Resources Tax Ordinance;

Pursuant to Decision No. 197/2003/QĐ-TTg dated September 23, 2003 of the Prime Minister regarding the pilot implementation of the mechanism for production and business entities to self-declare and self-pay taxes;

Pursuant to Decision No. 161/2005/QĐ-TTg dated June 30, 2005 of the Prime Minister regarding the expansion of the pilot program for production and business entities to self-declare and self-pay taxes for special consumption tax at the production stage within the country; mineral resources tax; land and house tax; income tax for high-income individuals; and business license tax;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance, the Ministry of Finance issues guidelines for implementing Decree No. 68/1998/NĐ-CP dated September 3, 1998 and Decree No. 147/2006/NĐ-CP dated December 1, 2006 of the Government amending and supplementing certain Articles of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the amended Mineral Resources Tax Ordinance as follows:

Part I

TAXPAYERS AND TAXABLE OBJECTS

I. Taxpayers

According to Article 1 of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the amended Mineral Resources Tax Ordinance, taxpayers of the mineral resources tax include organizations and individuals from all economic sectors, including State-owned enterprises, joint-stock companies, limited liability companies, cooperatives, private businesses, foreign-invested enterprises or foreign parties participating in joint venture contracts, households engaged in production and business activities, and other organizations and individuals, regardless of industry, scale, or form of operation, who exploit natural resources according to Vietnamese law must register, declare, and pay the mineral resources tax as stipulated in Article 1 of the amended Mineral Resources Tax Ordinance. Specific cases are provided as follows:

1. Foreign-invested enterprises and foreign parties conducting business cooperation based on contracts paying for natural resources or paying mineral resources tax at specific rates specified in investment licenses issued before June 1, 1998 shall continue to pay for natural resources or pay mineral resources tax according to those provisions until the expiration date of the issued licenses. In cases where investment licenses are extended after this Circular takes effect, they shall follow the guidance provided in this Circular.

2. According to Article 3 of the amended Mineral Resources Tax Ordinance and Article 3 of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government, if a joint venture enterprise with foreign partners operates under the Law on Investment (now the Investment Law) and the Vietnamese party contributes capital in the form of natural resources listed in the investment license, then the joint venture enterprise does not have to pay mineral resources tax on the amount of natural resources that the Vietnamese party uses as statutory capital. The Vietnamese party must declare the newly generated natural resources used as capital every three or six months and report to the Ministry of Finance to record the state budget and manage the capital according to current regulations.

3. If an enterprise is established based on a joint venture, cooperative agreement, or resource-sharing agreement between a Vietnamese party and a foreign party, the mineral resources tax payable by the joint venture enterprise or the foreign party must be determined in the joint venture agreement, cooperative agreement, or resource-sharing agreement, and if agreed upon, it should be included in the share allocated to the Vietnamese party. When sharing products, the Vietnamese party is responsible for paying the mineral resources tax into the state budget according to the Law on the State Budget on the entire volume of extracted natural resources.

4. For natural resources prohibited from exploitation that are seized, confiscated, and permitted to be sold, the organization entrusted with selling them must include full mineral resources tax in the sale price and pay it into the state budget.

II. Taxable Objects

According to Article 2 of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the amended Mineral Resources Tax Ordinance, taxable objects of the mineral resources tax include natural resources within the territory, islands, inland waters, territorial seas, exclusive economic zones (including overlapping sea areas between Vietnam and related countries), and the continental shelf, which are under the sovereignty of the Socialist Republic of Vietnam, including:

1. Metallic minerals: Including black metallic minerals (iron, manganese, titanium...) and colored metallic minerals (gold, rare earth, platinum, tin, tungsten, copper, lead, zinc, aluminum...);

2. Non-metallic minerals, including: soil for bricks, soil for excavation and construction projects, soil for other purposes; stone, sand, gravel, coal, precious stones, mineral water, natural hot water, etc., as defined in 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. Products of natural forests, including plants and animals that are allowed to be exploited as forest products, such as wood (including branches, tops, firewood, roots, and stumps... determined according to standards prescribed by the Ministry of Agriculture and Rural Development), bamboo, rattan, reed, and various medicinal herbs, and other plants and animals that are allowed to be exploited;

6. Natural aquatic products: Animals and plants naturally found in the sea, rivers, streams, lakes, ponds, and lagoons;

7. Natural water, including:

7.1 Surface water: Sea, lakes, rivers, streams, canals, creeks, ponds, dams, etc.;

7.2 Underground water (excluding natural hot water and mineral water mentioned in Point 2 of this Section).

8. Other natural resources: Includes types of natural resources that do not belong to the above groups.

Part II

BASIS FOR CALCULATING NATURAL RESOURCE TAX AND TAX RATE

The basis for calculating natural resource tax is the quantity of commercial natural resources extracted during the period, the unit price for calculating natural resource tax, and the tax rate on natural resource tax.

The amount of natural resource tax payable during the tax payment period is calculated as follows:

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

I. Actual quantity of commercial natural resources extracted

According to Article 6 of Decree No. 68/1998/NĐ-CP dated September 3, 1998, detailing the implementation of the Natural Resource Tax Ordinance (amended), the quantity of natural resources subject to tax is determined as follows for each case:

1. For types of natural resources whose quantity, weight, or volume can be determined, the quantity of commercial natural resources for tax calculation is the actual quantity, weight, or volume of the extracted natural resources during the tax payment period, regardless of the condition and purpose of extraction (for immediate sale, exchange, internal consumption, storage for subsequent production...).

2. For types of natural resources whose actual quantity, weight, or volume cannot be determined due to containing various substances with high impurity content, the quantity of natural resources for tax calculation is based on the quantity, weight, or volume of each substance obtained through screening and sorting.

Example: A company must screen thousands of cubic meters of soil, rock, water (quantity cannot be determined) during the tax payment period to obtain 2 kilograms of gold dust, 100 tons of iron ore... then the natural resource tax is calculated based on the quantity of gold dust and iron ore obtained. At the same time, determine the quantity of other types of natural resources extracted for use in mining activities, such as water used for screening and processing.³ soil, rock, water (the quantity of which cannot be determined), to obtain 2 kilograms of gold dust, 100 tons of iron ore... then the resource tax shall be calculated based on the quantity of gold dust and iron ore obtained. At the same time, the production volume of other types of resources exploited and utilized for mineral extraction activities, such as water used for screening and beneficiation operations, shall be determined.

3. For types of natural resources extracted but not sold immediately and instead used for further production or service provision if the quantity cannot be directly determined, the quantity of natural resources for tax calculation is based on the production quantity of products produced during the period and the consumption quota of natural resources per unit product.

Example 1: To produce 1,000 unfired bricks, 1 cubic meter of clay is required. In a month, the clay extraction facility produces 100,000 unfired bricks, so the quantity of clay extracted subject to natural resource tax is 100,000 divided by 1,000 = 100 cubic meters.³ clay. In a month, the clay mining facility produces 100,000 bricks, then the production volume of clay subject to the resource tax is 100,000 divided by 1,000 = 100 cubic meters.^3.

4. For natural water used for hydroelectric power production: It is the quantity of electricity dispatched from the hydroelectric power plant sold to the buyer, measured through a standard measuring system installed at the delivery point. This quantity is confirmed by both the buyer and seller.

5. In cases of manual extraction, scattered extraction, or mobile extraction that is not regular, with the expected annual quantity of extracted natural resources valued under 200,000,000 VND and difficult to manage, it may implement a quota system for the quantity of extracted natural resources according to seasons or periods. The tax authority will coordinate with local authorities and specialized management agencies to set the quota of extracted natural resources.

In the aforementioned situation, if the extracted natural resources are concentrated at a purchasing point and the purchasing entity agrees in writing, the Provincial Tax Department may decide (in writing) for organizations or individuals purchasing natural resources to pay the natural resource tax on behalf of the extractor.

II. Tax Calculation Price

According to Article 7 of Decree No. 68/1998/NĐ-CP dated September 3, 1998, detailing the implementation of the Natural Resource Tax Ordinance (amended), and Clause 2, Article 1 of Decree No. 147/2006/NĐ-CP dated December 1, 2006, amending and supplementing certain articles of Decree No. 68/1998/NĐ-CP, the tax calculation price for natural resources is the selling price of one unit of natural resources at the extraction site, ensuring market principles and is determined as follows for each case:

1. For natural resources whose quantity can be determined at the extraction stage and can be sold immediately after extraction (such as: soil, rock, sand, gravel, aquatic products...), the tax calculation price of one unit of natural resources is the actual selling price, excluding value-added tax.

2. For natural resources extracted with the same grade and quality, part of the quantity of natural resources is sold at the extraction site at market prices, while another part is transported for consumption or further production, processing, screening, selection..., the tax calculation price per unit of the total quantity of natural resources extracted in the month is the selling price of one unit of that type of natural resource at the extraction site. The selling price of one unit of natural resource is calculated by dividing the total revenue (excluding value-added tax) from the sale of that type of natural resource at the extraction site by the total quantity of that type of natural resource sold at the extraction site in the month.

If there is an increase in the quantity of natural resources extracted in the month but no revenue from sales of natural resources at the extraction site, the tax calculation price per unit of natural resource is determined based on the tax calculation price per unit of natural resource of the previous adjacent month or based on the accounting price to determine the natural resource tax for the month. At the end of the business period, the actual selling price of the extracted natural resources declared for tax purposes is used to calculate the actual natural resource tax payable when filing the final settlement tax declaration.

3. For natural resources whose unit selling price at the extraction site cannot be determined as specified in points 1 and 2 of this section, the tax calculation price is determined as follows for each specific case:

3.1. For resources whose yield is determined at the extraction stage but which are sold only after screening, sorting... the tax unit price for such resources shall be the sale price of the product after screening and sorting, minus the costs incurred during the screening and sorting stages, and converted according to their content or proportion to determine the actual sale price of the extracted resource before value-added tax.

Example: The sale price of 1 ton of clean coal is 65,000 VND/ton (excluding VAT), the cost of screening and transporting from the extraction site to the sales location is 10,000 VND/ton; the proportion of clean coal in the actually extracted coal is 80%, then:

3.2. For resources whose quantity cannot be determined at the extraction stage because they contain different substances, the tax unit price for such resources shall be the sale price per unit (excluding VAT) of the pure substance with the highest content in the extracted resource, or the sale price of the pure substance of each component in the extracted resource if they can be separated after extraction. Examples include gold dust, iron ore, etc.

4. The tax unit price for wood is the sale price at the delivery site.

5. The resource tax calculation price for natural water used for hydropower production is set at 750 VND per kWh, applicable from January 1, 2007. Hydropower production units that declared and paid the resource tax on natural water used for hydropower production in 2007 at a rate of 700 VND per kWh should adjust the tax calculation price according to the guidelines in this Circular when filing the final settlement declaration for the 2007 resource tax.

When there is a change in the average retail electricity price, the resource tax calculation price for 1 kWh of commercial hydropower is determined by multiplying the pre-adjustment resource tax calculation price for 1 kWh of commercial hydropower by the adjustment factor.

The adjustment factor is calculated using the following formula:

Average retail price of 1 kWh of electricity at the time of adjustment

Adjustment factor =

Average retail price of 1 kWh of electricity before adjustment

6. Organizations and individuals extracting resources but not selling them out, instead using the extracted resources as raw materials for producing other products or providing other services; organizations and individuals extracting resources who declare and pay taxes without fully complying with accounting records and accounting vouchers as prescribed; organizations and individuals paying resource tax based on fixed rates, shall apply the tax unit price for resources as stipulated by the provincial People's Committee for each period.

The Provincial Tax Department, in collaboration with the Department of Finance and Price and the Department of Natural Resources and Environment, shall review and monitor market prices for resources in the locality and develop plans to adjust the tax calculation price for resources to be submitted to the provincial People's Committee for decision and reported to the Ministry of Finance (General Department of Taxation). When the sale price of a type of resource fluctuates significantly (+/- 20%), the tax calculation price for resources must be adjusted.

The tax authority directly responsible for collecting resource tax must publicly announce the tax unit price for resources at its office.

7. Specifically, for oil and natural gas, the tax unit price for resources shall be implemented in accordance with the provisions of the Oil Law and Article 46 of Decree No. 48/2000/NĐ-CP dated September 12, 2000, detailing the implementation of the Oil Law.

III. Resource Tax Rate

Based on Article 8 of Decree No. 68/1998/NĐ-CP dated September 3, 1998, detailing the implementation of the Resource Tax Ordinance (amended), the resource tax rate for each type of extracted resource shall be implemented according to the Resource Tax Rate Table issued together with Decree No. 68/1998/NĐ-CP and shall be determined as follows for certain types of resources:

1. Natural water extracted for ice production (excluding refined ice production) shall apply a resource tax rate of 1%.

2. Apatite and tin concentrate extracted and sold shall apply a tax rate of 2%.

3. Section VII of the Resource Tax Rate Table issued together with Decree No. 68/1998/NĐ-CP dated September 3, 1998, detailing the implementation of the Resource Tax Ordinance (amended) is interpreted as follows: "VII. Mineral Water, Natural Water" as stipulated in Clause 4, Article 1 of Decree No. 147/2006/NĐ-CP dated December 1, 2006.

4. For oil and natural gas, it shall be implemented in accordance with Articles 44 and 45 of Decree No. 48/2000/NĐ-CP dated September 12, 2000, detailing the implementation of the Oil Law.

On the basis of the tax rates specified above, specific tax rates for resource tax are detailed in the Resource Tax Rate Table (Annex 2) issued together with this Circular.

Part III

REGISTRATION, DECLARATION, PAYMENT, AND SETTLEMENT OF TAXES

I. Tax Registration

1. New business establishments engaging in resource extraction activities shall register for tax code issuance and resource tax payment declaration in accordance with Circular No. 10/2006/TT-BTC dated February 14, 2006, guiding the implementation of Decision No. 75/1998/QĐ-TTg dated April 4, 1998, of the Prime Minister regarding tax object codes at the direct tax management agency and the local tax agency where the resources are extracted. During the process, if there are changes in tax registration information, the business establishment must declare supplementary information to the direct tax management agency according to current tax registration regulations.

2. For existing businesses adding new resource extraction activities, they shall continue to use the tax code already issued by the tax agency, but must register supplementary information with the tax agency at their main office and the direct tax management agency at the location of the resource extraction facility according to current tax registration regulations.

II. Declaration of Resource Tax

Organizations and individuals extracting resources shall submit tax declaration forms to the direct tax management agency responsible for collecting resource tax.

1. For organizations and individuals paying taxes under the fixed-rate method:

Organizations and individuals exploiting small-scale, scattered natural resources with an annual value of natural resources exploited below 200,000,000 VND, if inspected and advised by tax authorities to pay taxes under the fixed-rate method, shall simultaneously declare taxes, determine the amount of tax payable, and stabilize the tax payment period in conjunction with the current VAT and corporate income tax fixed rates. The monthly fixed-rate resource tax payable shall be based on the production volume and revenue for determining the VAT rate.

Tax authorities shall base their determination of the actual production volume of natural resources and the amount of resource tax payable on the declaration forms submitted by the resource extraction entities, combined with actual investigation materials on resource sources, capital, labor, extraction equipment, and resource prices. The allocation of tax quotas must ensure transparency, democracy, and accuracy according to the actual capacity of natural resource exploitation activities.

During the stabilization period for organizations and individuals who must pay taxes, if the actual production volume and taxable value of natural resources exceed the declared and fixed tax figures, they must report to the tax authority to adjust the tax payable in the following period. If they fail to report and are discovered during inspection, they will be subject to back taxes for the excess amount and administrative penalties for late tax registration without being penalized for tax evasion.

Organizations and individuals paying taxes under the fixed-rate method must declare and pay taxes for resource extraction activities together with tax registration at the direct tax collection authority before commencing resource extraction, in accordance with current regulations. At the end of the business period, they do not need to submit a final tax declaration form for resource taxes, including those exempted or reduced from resource taxes on a case-by-case basis as specified in Part IV of this Circular.

2. For organizations and individuals paying taxes through declarations:

2.1. Monthly declaration of resource tax:

a) Each month, businesses must calculate and declare resource tax fully according to Form No. 01/TNg issued along with this Circular. Even if there is no resource tax generated in the month, businesses still need to declare and submit the declaration form to the tax authority.

- Businesses must fill out all items on the declaration form (tax code, name, address, location of resource extraction...) and other relevant information registered with the tax authority, while confirming the legality of the declaration (signing and stamping). Failure to complete the declaration form as required or confirm its legality is considered as not submitting the declaration form to the tax authority.

- Businesses must submit the monthly resource tax declaration form to the tax authority no later than the 20th day of the following month. Submission can be made via post or directly at the tax office. The submission date is determined by the post office's dispatch date (for postal submissions) or the date of submission to the tax office (for direct submissions).

b) For types of resources where the actual tax basis cannot be determined for the month, businesses may temporarily calculate and declare the monthly resource tax based on bookkeeping prices. Accordingly, businesses determine the temporary monthly resource tax based on the price set when selling one unit of the resource to prepare the monthly resource tax declaration form. At year-end, businesses re-calculate the actual resource tax payable based on the actual selling price of one unit of the taxed resource when preparing the final resource tax declaration form.

c) Declaration of resource tax expected to be exempted or reduced: Businesses that are eligible for tax exemptions or reductions under the declaration method must fully account for it, temporarily calculate the exempted or reduced tax amount each month based on the provisions for tax exemptions or reductions detailed in Part IV of this Circular, and declare it on the monthly declaration form.

2.2. Final declaration of resource tax:

a) Businesses must prepare and submit the final resource tax declaration form according to Form No. 02/TNg attached to this Circular upon completion of the business period to determine the actual resource tax generated in the year. The deadline for submitting the final resource tax declaration form is 90 days from the end of the calendar or fiscal year. In cases of termination of resource extraction contracts, mergers, consolidations, divisions, dissolutions, bankruptcies, ownership transfers, or state enterprise transfers, leases, or assignments, businesses must submit the final resource tax declaration form to the tax authority within 45 days from the contract termination date or the decision-making authority's decision regarding mergers, consolidations, divisions, dissolutions, bankruptcies, or ownership transfers.

b) For hydropower production facilities located in one locality but whose resource tax revenues are allocated to other localities as stipulated by the Ministry of Finance, the tax authority responsible for managing resource taxes at the location of the hydropower plant must send copies of the tax declaration forms and the final resource tax declaration forms to the relevant tax authorities that benefit from the resource tax revenues.

c) Determination of exempted or reduced resource tax: Businesses eligible for tax exemptions or reductions must independently determine the exempted or reduced resource tax amount based on actual data and prepare documentation supporting the tax exemption or reduction to be submitted to the tax authority as required.

c) Determining the amount of resource tax exempted or reduced: Businesses eligible for exemption or reduction of the resource tax must self-determine the amount of tax exempted or reduced based on actual data, and simultaneously prepare documentation regarding the grounds for tax exemption or reduction to submit to the tax authority as prescribed.

Monthly, the business entity self-assesses its compliance with the conditions for exemption or reduction of natural resource taxes, provisionally calculates the amount of tax exempted or reduced, and declares it on the Natural Resource Tax Return Form No. 01/TNg. At the end of the year of natural resource exploitation, based on actual data on natural resources extracted during the year, the business entity self-assesses the actual amount of natural resource tax exempted or reduced to declare on the Annual Settlement Natural Resource Tax Return Form according to regulations and submit along with the file on exempted or reduced natural resource tax to the directly managing tax authority for monitoring and inspection.

2.3. Accompanying this Circular is the Natural Resource Tax Return Form (Form No. 01/TNg); the Annual Settlement Natural Resource Tax Return Form (Form No. 02/TNg), and the Guide for Declaring Natural Resource Tax (Annex No. 1).

2.4. The business entity bears legal responsibility for the truthfulness and accuracy of the declaration of natural resource tax and retains all documents evidencing the declared amount of natural resource tax.

III. Payment of Natural Resource Tax

1. Organizations and individuals paying natural resource tax under the fixed-rate method shall pay the natural resource tax monthly at the fixed rate not later than the last day of the month.

2. Business entities paying natural resource tax under the declaration method:

2.1. Monthly, the business entity pays the natural resource tax into the State budget according to the declared amount. The deadline for paying the natural resource tax of the month shall not exceed the 20th day of the following month. In case there is a payable natural resource tax according to the Annual Settlement Natural Resource Tax Return Form, the business entity shall pay the outstanding natural resource tax into the State budget not later than 90 days from the end of the calendar year or fiscal year.

2.2. In cases where the natural resource exploitation contract ends; mergers, consolidations, divisions, spin-offs, dissolution, bankruptcy, ownership transfer; transfer, sale, lease of state-owned enterprises, the business entity must pay the outstanding natural resource tax within 45 days from the date of termination of the natural resource exploitation contract or the date of the competent authority's decision on merger, consolidation, division, spin-off, dissolution, bankruptcy, ownership transfer, transfer, sale, lease; if there is an overpayment of tax, it will be refunded by the tax authority or transferred to the new business entity according to current regulations.

2.3. When the business entity pays the natural resource tax through bank transfer or other financial institutions, the payment date into the State budget is determined as the date when the bank or other financial institution transfers the tax payment into the Treasury according to the State Budget Payment Receipt of the business entity; for business entities paying the tax in cash, the payment date into the State budget is determined as the date when the State Treasury Office or tax authority receives the tax payment recorded on the payment receipt.

2.4. The business entity must fully record all items on the payment receipt according to the guidance of the tax authority and the State Treasury Office. The business entity must clearly record on the payment receipt the amount of tax for each type of tax and late payment fines for each tax period; specifically, the amount of late payment fines for tax must be clearly recorded on the payment receipt as paid according to the tax authority's notice on the date, month, and year without having to determine the amount of late payment fine for each tax. In cases where the business entity has both tax and late payment fines to pay in the current period and also has unpaid tax and late payment fines from previous periods but does not specify which tax period they are for, the tax authority will first deduct the unpaid tax and late payment fines from previous periods before deducting the current period's tax and late payment fines.

2.5. In cases where water resources used for hydropower production generate revenue for multiple localities, the State Treasury Office where the hydropower production entity pays the natural resource tax is responsible for allocating the water resource natural resource tax collected from hydropower production entities according to the percentage decided by the Ministry of Finance for the benefiting localities.

Part IV

EXEMPTIONS AND REDUCTIONS OF MINERAL RESOURCE TAX

The exemption and reduction of natural resource tax as stipulated in Article 10 of the Amended Natural Resources Tax Ordinance, Article 12 of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the Amended Natural Resources Tax Ordinance, and Clause 3, Article 1 of Decree No. 147/2006/NĐ-CP dated December 1, 2006 of the Government amending and supplementing Decree No. 68/1998/NĐ-CP and the current Investment Law provisions shall be implemented as follows:

I. Business entities exploiting natural resources and paying tax under the declaration method, encountering natural disasters, enemy attacks, unexpected accidents causing losses to declared and taxed natural resources, shall be exempted from the natural resource tax payable for the lost resources. If the tax has already been paid, it will be refunded or offset against the natural resource tax payable in the subsequent period.

The tax exemption under this point only applies to cases of damage to unprocessed natural resources that have not changed their original physical and chemical properties.

1. The degree of damage to natural resources is determined as follows:

- For types of natural resources damaged in specific quantities, the damage is determined based on the actual quantity lost.

- For types of natural resources damaged leading to a decrease in quality or proportion, the taxable value and tax rate are reassessed. The amount of natural resource tax exempted equals the difference between the previously calculated and declared tax and the recalculated tax after the damage occurred.

Example: The proportion of clean coal in raw coal is 80%, but due to floods, the proportion of clean coal decreases to 50%, requiring a recalculation of the tax value and determination of the tax exemption difference.

2. Procedures for natural resource tax exemption include:

- A document clearly stating the reasons, quantity of lost natural resources, recalculated natural resource tax amount based on the degree of damage, and the proposed exempted natural resource tax amount (with confirmation from the People's Committee of the commune, ward, town where the natural resource loss occurred).

- An inspection and assessment report by the directly managing tax authority attached to the application for natural resource tax exemption.

II. Organizations and individuals engaged in marine fishing activities in distant sea areas using large-capacity vessels shall be exempt from resource tax for the first five years from the date of issuance of the exploitation permit, and shall have their resource tax reduced by fifty percent for the subsequent five years.

Large-capacity vessels refer to fishing boats equipped with main engines having a power capacity of ninety horsepower (HP) or more.

Based on the permit for marine fishing activities in distant sea areas, organizations and individuals engaged in exploitation shall determine their eligibility for tax exemption and reduction and notify the directly managing tax authority about the period during which they are eligible for such exemptions and reductions.

For businesses engaged in distant sea fishing that are required to declare taxes, at the end of the tax period, they shall self-determine the actual amount of resource tax exempted or reduced during the period for tax declaration purposes and bear full responsibility for the declared tax exemptions and reductions. If a business incorrectly determines its eligibility for tax exemptions and reductions leading to overstated tax exemptions and reductions, in addition to being subject to back taxes, it will also be subject to current regulations.

During the operation period, if there are changes in the conditions for tax exemptions and reductions that result in a decrease in tax benefits for organizations and individuals engaged in marine fishing in distant sea areas, they must promptly report these changes to the nearest tax authority for confirmation. Failure to report such changes to continue enjoying tax exemptions and reductions will be considered tax evasion and will be subject to legal penalties.

3. After the tax exemption and reduction period mentioned above (ten years), if organizations and individuals engaged in marine fishing in distant sea areas, who are required to declare taxes, incur losses in their business operations in a given year, they may have their resource tax reduced by the amount of the loss incurred from distant sea fishing activities, but not exceeding the amount of resource tax payable for such activities; the tax reduction period shall not exceed five consecutive years following the expiration of the tax exemption and reduction period mentioned above. The tax reduction declaration form shall be attached to the final tax settlement declaration form and shall include:

- A calculation of the reduced resource tax.

- A declaration of revenue, expenses, and losses from distant sea fishing activities.

III. Natural forest products extracted by residents in communes with forests, including wood, branches, firewood, bamboo, reeds, leaves, rattan, mats, and other materials for daily living needs, including any surplus sold, shall be exempt from resource tax. Sales shall be limited within the district where the extraction takes place.

Based on the proposal of the commune People's Committee and the direct management forestry inspection agency, the head of the directly managing tax authority shall decide on the tax exemption for this group. The decision must clearly specify the type of natural resources permitted to be extracted, location, method of extraction, and consumption point. Each decision's duration shall not exceed three months, after which the tax authority must conduct a review before issuing another tax exemption decision.

In cases where it is discovered that tax exemptions are being exploited to engage in unregulated natural forest extraction, the tax authority must revoke the tax exemption decision (if issued) and transfer the case to the competent authority for handling according to current laws.

IV. Water resources used for hydroelectric production that does not connect to the national power grid shall be exempt from resource tax.

Based on the application of organizations and individuals engaged in extraction (with comments from the provincial industry department regarding non-connection to the national power grid), the head of the directly managing tax authority shall decide on the tax exemption for this situation.

V. Exemption from resource tax for land used for the following purposes:

1. Land leveling and construction of facilities serving security and defense;

2. Land leveling and construction of dike, water conservancy, and agricultural, forestry, and fishery infrastructure projects directly serving agriculture, forestry, and fisheries, and road construction.

3. Land leveling and construction of humanitarian and charitable projects or preferential projects for those who have contributed to the revolution.

4. Land leveling and construction of infrastructure projects in mountainous regions (within the scope of districts designated as mountainous areas by the Committee for Ethnic Minorities and Mountainous Areas) to serve economic and social development in these regions.

5. Extraction within the scope of land allocated or leased for leveling, raising, and construction within that area.

6. Land leveling and construction of national key projects as decided by the Prime Minister for each specific case.

The exemption from resource tax for land used for leveling and construction of projects mentioned herein includes sand, gravel, pebbles, etc., mixed in the extracted land and used in their raw state for leveling and construction.

Cases where sand, gravel, pebbles, etc., are extracted and then processed further into other products for production and business purposes shall not be exempt from tax but must be declared and taxed according to current regulations.

In the cases specified in Points 1, 2, 3, 4, and 5 of this Section, organizations and individuals engaged in extraction must submit a request for tax exemption along with relevant documents to obtain approval from the competent authority for project construction in the locality and send the complete file to the directly managing tax authority in the extraction area for knowledge and monitoring of the tax exemption.

Part V

DUTIES, POWERS AND RESPONSIBILITIES OF THE TAX AUTHORITY

In addition to the duties, powers and responsibilities prescribed in tax laws and related laws, the tax authority managing business establishments shall have the responsibility to:

1. Propagate, disseminate, guide and answer questions from business establishments regarding tax policies, procedures for tax declaration and payment so that business establishments understand and comply with legal provisions on taxes and the self-declaration and self-payment mechanism.

2. Monitor the fulfillment of tax declaration and payment obligations by business establishments:

- If the deadline for submitting monthly tax returns or annual final tax returns has passed, the tax authority shall send a notice reminding of the submission of the return and impose administrative penalties according to current regulations. If the business establishment still fails to submit the return after the final deadline specified in the reminder notice, the tax authority will determine the amount of tax due according to the regulations.

- If the deadlines for tax payments have been exceeded, the tax authority shall send a notice reminding of tax payment to business establishments that have not paid or have not fully paid the tax, while imposing late payment penalties on the outstanding tax owed to the state budget according to the regulations.

3. Conduct inspections and audits of tax declarations and payments made by business establishments.

4. Apply coercive measures to collect overdue taxes and penalties as prescribed by law.

5. Ensure confidentiality of information provided about pilot production and business establishments as stipulated.

Part VI

VIOLATION HANDLING, REWARDING, COMPLAINTS AND STATUTE OF LIMITATIONS

1. The handling of violations, rewarding, and complaints regarding resource taxes shall be carried out in accordance with current laws.

2. Any intentional exploitation of prohibited resources shall be dealt with according to the current laws. Upon discovering violations during inspections, the tax authority must report and coordinate with competent authorities to handle them within their jurisdiction.

3. If false declarations, tax evasion, or tax errors are discovered and concluded, the tax authority shall be responsible for recovering taxes and penalties or refunding overpaid taxes within the time limit prescribed by current tax laws. For organizations or individuals exploiting resources without declaring or paying taxes, the recovery period for taxes and penalties starts from when the business establishment begins operations.

Part VII

IMPLEMENTATION

This Circular takes effect fifteen days after its publication in the Official Gazette, replacing Circular No. 153/1998/TT-BTC dated November 26, 1998 of the Ministry of Finance guiding the implementation of Decree No. 68/1998/NĐ-CP dated September 3, 1998 of the Government detailing the implementation of the Ordinance on Resource Tax (amended), Circular No. 83/2005/TT-BTC dated September 22, 2005 guiding the pilot implementation of self-declaration and self-payment of resource taxes by production and business establishments under Decision No. 161/2005/QĐ-TTg dated June 30, 2005 of the Prime Minister, and Circular No. 05/2006/TT-BTC dated January 19, 2006 of the Ministry of Finance guiding natural water resource taxes for hydropower production.

During implementation, if there are any difficulties, units are requested to report to the Ministry of Finance for supplementary guidance./.