Thông tư 48/2001/TT-BTC

CIRCULAR No CIRCULAR No. 48/2001/TT-BTC OF JUNE 25, 2001 GUIDING THE IMPLEMENTATION OF TAX PROVISIONS APPLICABLE TO ORGANIZATIONS AND INDIVIDUALS CONDUCTING OIL AND GAS PROSPECTION, EXPLORATION AND EXPLOITATION ACTIVITIES UNDER THE PETROLEUM LAW Pursuant to the Petroleum Law passed by the National Assembly of the Socialist Republic of Vietnam on July 6, 1993, the Law Amending and Supplementing a Number of Articles of the Petroleum Law, passed by the National Assembly of the Socialist Republic of Vietnam on June 9, 2000 and the Government�s Decree No. 48/2000/ND-CP of September 12, 2000 detailing the implementation of the Petroleum Law; Pursuant to the Law on Foreign Investment in Vietnam passed by the National Assembly of the Socialist Republic of Vietnam on November 12, 1996, the Law Amending and Supplementing a Number of Articles of the Law on Foreign Investment in Vietnam passed by the National Assembly of the Socialist Republic of Vietnam on June 9, 2000 and the Government�s Decree No. 24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam; Pursuant to the current tax laws and ordinances of the Socialist Republic of Vietnam and the Government�s Decrees detailing the implementation of the tax laws and ordinances; Pursuant to the Government�s Decree No. 178/CP of October 28, 1994 defining the tasks, powers and organizational structure of the Finance Ministry; The Finance Ministry hereby guides the implementation of tax provisions applicable to organizations and individuals conducting oil and gas prospection, exploration and exploitation activities under the Petroleum Law as follows: Part One GENERAL PROVISIONS 1. The guidances in this Circular shall apply to organizations and individuals conducting oil and gas prospection, exploration and exploitation activities in Vietnam under the provisions of the Petroleum Law and the Government�s Decree No. 48/2000/ND-CP of September 12, 2000 detailing the implementation of the Petroleum Law (hereinafter called Decree No. 48/2000/ND-CP for short). 2. Organizations and individuals conducting oil and gas prospection, exploration and exploitation activities shall comply with the tax provisions guided in this Circular according to each petroleum contract, concretely: l For petroleum contracts signed in the form of production-sharing contract, the operators shall have to represent the contractors to declare and pay tax (hereinafter referred collectively to as tax payers). l For petroleum contracts signed in the form of joint- administration contract, the joint- administration companies shall have to represent the contractors to declare and pay tax (hereinafter referred collectively to as tax payers). l For petroleum contracts signed in the form of joint-venture contract for the establishment of joint-venture enterprises having Vietnamese legal person status, the joint-venture enterprises shall be the tax payers. l For cases where Vietnam Oil and Gas Corporation conducts the oil and gas prospection, exploration and exploitation activities by itself, Vietnam Oil and Gas Corporation shall be the tax payer. 3. Where an organization or individual conducts oil and gas prospection, exploration and exploitation activities under different petroleum contracts, the implementation of tax provisions under this Circular�s guidance shall be effected separately according to each petroleum contract. 4. Where the contractors participating in petroleum contracts in form of production-sharing contract or joint-administration contract receive the contractual shares divided in oil and gas and take responsibility to consume their divided shares of oil and gas, the declaration and payment of taxes on petroleum activities shall comply with separate guidance. 5. Where international treaties and/or inter-governmental agreements, which the Vietnamese government has signed, contain tax provisions for oil and gas prospection, exploration and exploitation activities different from the tax provisions in this Circular, the tax payment by organizations and individuals conducting oil and gas prospection, exploration and exploitation shall comply with the signed international treaties and/or inter-governmental agreements. Part Two GUIDING THE IMPLEMENTATION OF TAX PROVISIONS I. NATURAL RESOURCE TAX 1. Taxation objects: The whole output of crude oil and natural gas actually exploited from the entire area under the petroleum contracts shall be liable to natural resource tax. Where in the course of exploiting crude oil and natural gas, organizations and/or individuals conducting oil and gas prospection, exploration and exploitation activities are allowed to exploit other natural resources subject to natural resource tax as provided for by law on natural resource tax, the tax payment shall comply with current legislation. 2. Determining payable tax amounts: The natural resource tax on crude oil and natural gas shall be determined on the basis of partial progress of the total net crude oil and natural gas output exploited in the period of tax payment calculated according to the daily average crude oil and natural gas output exploited from the entire contractual areas. Determining payable natural resource tax in oil and gas: The natural Daily average taxable The natural The number of days� resource tax in crude = crude oil or natural gas x resource x exploiting crude oil or oil, natural gas output in the tax tax rate natural gas tax in the payment period payment period In which: l The daily average crude oil or natural gas output liable to natural resource tax is the total net crude oil or natural gas output liable to natural resource tax, exploited in the tax payment period, divided by the number of the exploitation days in the tax payment period. l The natural resource tax rate: prescribed at the Natural Resource Tax Index, Article 44, Article 45 of Decree No.48/2000/ND-CP, concretely: For crude oil: Exploitation output Projects with investment incentives Other projects Up to 20,000 barrels/day 4% 6% Over 20,000 barrels to 50,000 barrels/day 6% 8% Over 50,000 barrels to 75,000 barrels/day 8% 10% Over 75,000 barrels to 100,000 barrels/day 10% 15% Over 100,000 barrels to 150,000 barrels/day 15% 20% Over 150,000 barrels/day 20% 25% For natural gas: Exploitation output Projects with investment incentives Other projects Up to 5 million m 3 /day 0% 0% Over 5 million m 3 to 10 million m 3 /day 3% 5% Over 10 million m 3 /day 6% 10% For petroleum contracts signed before the Petroleum Law takes effect, which contain no agreement on natural resource tax rate or contain agreement on the tax rates other than those mentioned above, the above-mentioned tax rates shall apply to the oil and gas output actually exploited as from July 1, 2000 (the date the Law Amending and Supplementing a Number of Articles of the Petroleum Law took effect). The natural resource tax rates for crude oil or natural gas exploited under the petroleum contracts with investment incentives shall be based on the list of petroleum projects with investment incentives, decided by the Prime Minister. l The number of days� exploiting crude oil or natural gas in the tax payment period is the number of days of carrying the activity of exploiting crude oil or natural gas in the tax payment period, excluding days on which production stops due to any reasons. Example 1. Determining the payable natural resource tax in crude oil for cases of crude oil exploitation: Presumably: + Total net crude oil exploited in the tax payment period : 15,600,000 barrels; + The number of production days in the tax payment period : 78 days; + The daily average crude oil output liable to natural resource tax in the tax payment period: 200,000 barrels/day (15,600,000 barrels: 78 days); + Crude oil exploited under contracts not on the list of projects with investment incentives (where crude oil is exploited under contracts on the list of projects with investment incentives, it is calculated similarly with the natural resource tax rate applicable to projects with investment incentives). The natural resource tax in crude oil payable in the tax payment period: {(20,000 x 6%) + (30,000 x 8%) + (25,000 x 10%) + (25,000 x 15%) + (50,000 x 20%) + (50,000 x 25%) } x 78 days = 2,523,300 barrels. Example 2: Determining the payable natural resource tax in natural gas for cases of natural gas exploitation: Presumably: + The total net natural gas output exploited in the tax payment period: 858,000,000 m 3 ; + The number of production days in the quarter: 78 days; + The daily average natural gas output liable to natural resource tax in the tax payment period: 11,000,000 m 3 (858,000,000 m 3 : 78 days); + The natural gas exploited under contracts not on the list of projects with investment incentives (for cases where the natural gas is exploited under contracts on the list of projects with investment incentives, it shall be calculated similarly with the natural resource tax rates applicable to projects with investment incentives). The natural resource tax in natural gas payable in the tax payment period: {(5,000,000 x 5%) + (1,000,000 x 10%)} x 78 days = 27,300,000 m 3 . 3. Tax declaration, payment and final settlement: The natural resource tax shall be paid either in cash or in oil and gas. Where it is paid in oil and gas, the tax office shall notify it in writing 6 months in advance and guide in detail the natural resource tax declaration and payment in oil and gas. The natural resource tax payment period shall be quarter (3 months) according to calendar year. - The first natural resource tax payment period shall last from the first day of oil and gas exploitation till the last day of a quarter. - The last natural resource tax payment period shall last from the first day of a quarter till the day the oil and gas exploitation ends. 3.1. Temporary payment of natural resource tax: 3.1.1. The temporarily paid natural resource tax amount shall be determined as follows: The temporarily paid The crude oil or natural The percentage of Price for calculation natural resource = gas output actually x temporarily paid x of temporarily paid tax amount delivered for sale natural resource tax natural resource tax In which: l The crude oil or natural gas output actually delivered for sale is the net crude oil or natural gas output already delivered for sale. l The percentage of temporarily paid natural resource tax shall be determined under the guidance below: The The natural resource tax projected temporarily for payment in oil and gas in a year paid natural = ������������� x 100% resource tax The oil and gas output liable to percentage natural resource tax in a year + The natural resource tax projected to be paid in oil and gas in a year shall be determined under the guidance at Point 2, Section I, Part Two of this Circular, on the basis of oil and gas output projected to be exploited in the year. + The oil and gas output liable to natural resource tax in a year shall be the net oil and gas output projected to be exploited in the year. At least 60 days before the end of the calendar year, the tax payers shall have to forward to the Finance Ministry the projected net oil and gas output to be exploited and the projected number of days of oil and gas exploitation of the following year. Basing itself on the net oil and gas output, the projected annual exploitation and the natural resource tax index for crude oil and natural gas, before December 15 every year, the Finance Ministry or the bodies authorized by the Finance Ministry shall determine and notify the tax payers of the percentage of temporarily paid natural resource tax for next year. Where in the course of temporary payment of natural resource tax, the projected oil and gas output and the projected number of oil and gas exploitation days in the last six months of the year are at variance with the reported plans, thus increasing or reducing the percentage of temporarily paid resource tax by 15% or more as against the temporarily paid natural resource tax percentage already notified by the Finance Ministry, the tax payers shall have to report such to the Finance Ministry before May 31 for re-determination of the temporarily paid resource tax percentage in the last 6 months. Example 3: Determining the temporarily paid natural resource tax percentage: - Determining the temporarily paid natural resource tax percentage for crude oil: Presumably: + The net crude oil output projected to be exploited in the year: 62,400,000 barrels; + The projected number of exploitation days in the year: 312 days; + The daily average taxable crude oil output: 200,000 barrels/day; + The natural resource tax projected to be paid in the year (to be determined as guided at Point 2, Section I, Part Two of this Circular): 10,093,200 barrels. The percentage of temporarily paid natural resource tax from crude oil exploitation is: 10,093,200 ����� x 100% = 16.175% 62,400,000 - Determining the temporarily paid natural resource tax percentage for natural gas: Presumably: + The net natural gas output projected to be exploited in the year: 3,432,000,000 m 3 ; + The projected number of exploitation days in the year: 312 days; + The daily average natural gas output liable to natural resource tax: 11,000,000 m 3 ; + The natural resource tax projected to be paid in the year (determined as guided at Point 2, Section I, Part Two of this Circular): 109,200,000 m 3 . The percentage of temporarily paid natural resource tax from natural gas exploitation is: 109,200,000 ������ x 100% = 3.181% 3,432,000,000 l The price for calculation of temporarily paid natural resource tax is the oil and gas selling price at the delivery and reception place up on each delivery for sale under square transaction contracts. Where oil and gas are not sold under square transaction contracts, the tax offices of the localities where the tax payers register tax (hereinafter called collectively the local tax offices) shall determine the price for natural resource tax calculation according to the following principles: - For crude oil: The local tax offices shall determine the natural resource tax calculation price on the basis of the arithmetic mean of the selling price of crude oil of the same category on the international market of three weeks in a row: the week before, the week during and the week after the crude oil delivery. The tax payers shall have to supply the tax offices with information on the composition and quality of crude oil being exploited. When necessary, the tax offices may consult with the Oil and Gas Corporation of Vietnam on the determination of the price of crude oil being exploited by the tax payers among the categories of crude oil with their selling prices announced on the international market. - For natural gas: The local tax offices shall determine the natural resource tax calculation price on the basis of the selling price of natural gas of the same category on the market, the delivery and reception place as well as other relevant factors. When necessary, the tax offices may consult with the Oil and Gas Corporation of Vietnam on the determination of natural resource tax calculation price for the natural gas. 3.1.2. Time limits for natural resource tax declaration and temporary payment: - For crude oil exploitation: Within 35 days as from the date of delivering crude oil for sale, the tax payers shall have to make and send to the tax offices the declaration on temporary payment of natural resource tax (made according to set form) and at the same time temporarily pay the natural resource tax as declared for the crude oil output actually delivered for sale into the State Treasury. - For natural gas exploitation: Not later than the 10 th day of the following month, the tax payers shall make and send the declaration on temporary payment of resource tax (made according to set form) and pay the natural resource tax on the net natural gas output exploited in the previous month into the State Treasury according to the time limits inscribed in the tax notices, but must not be later than the 25th of the following month. Past the above time limits, if the tax payers still fail to send the declarations on temporary payment of natural resource tax and enclose documents thereon to the tax offices, the latter may set the natural resource tax amounts and notify the tax payers of the natural resource tax amount to be temporarily paid, issue decisions on sanction against the late tax declaration and payment according to the current law provisions and notify the time limits for the payment of natural resource tax set by the tax offices and fines (if any). 3.2. Final settlement of natural resource tax: The natural resource tax shall be settled on the basis of net oil and gas output actually exploited in the period of tax payment, concretely as follows. 3.2.1. The settlement of natural resource tax for crude oil exploitation: 3.2.1a. Determining the natural resource tax to be paid in crude oil in the tax payment period: The natural resource The daily average crude The The number of crude tax to be paid in oil output liable to natural oil exploitation crude oil in the tax = natural resource tax x resource x days in the tax payment period in the tax payment period tax rate payment period 3.2.1b. Determining the percentage of natural resource tax in crude oil of the exploitation output in the tax payment period: The natural resource tax to be paid The percentage of natural in crude oil in the tax payment period resource tax in crude oil = ���������������� x 100% in the tax payment period The crude oil output exploited in the tax payment period 3.2.1c. Determining the natural resource tax in crude oil delivered for sale in the tax payment period: The natural resource tax The crude oil The percentage of natural in crude oil delivered for sale = output x resource tax in crude oil in the tax payment period delivered for sale in the tax payment period 3.2.1d. Determining the natural resource tax in crude oil not yet delivered for sale in the tax payment period for use as basis for settling the natural resource tax in crude oil to be paid for the subsequent tax payment period: The natural The natural resource The natural The natural resource tax in crude tax in crude oil not resource oil resource tax in oil not yet delivered = yet delivered for sale + payable in the - crude oil delivered for sale in the tax in the previous tax tax payment for sale in the tax payment period payment period period payment period 3.2.1e. Determining the payable amount from the natural resource tax crude oil delivered for sale in the tax payment period: The payable amount The natural The from the natural resource resource tax natural resource tax in crude oil delivered = in crude oil delivered x tax calculation for sale in the tax for sale in the tax price for payment period payment period crude oil In which: l The natural resource tax in crude oil delivered for sale in the tax payment period shall be determined as guided at Point 3.2.1c above; l The natural resource tax calculation price for crude oil is the weighted average price of crude oil sold at the delivery place under the square transaction contract in the tax payment period. Example 4: Determining the natural resource tax calculation price: Presumably: The crude oil output allowed for sale in the quarter (10,000,000 barrels) is delivered for sale in three lots: Lot 1 of 2,000,000 barrels sold at the price of USD 18/barrel; lot 2 of 2,000,000 barrels sold at the price of USD 20/ barrel; lot 3 of 6,000,000 barrels sold at the price of USD 14/barrel. The natural resource tax (2,000,000 x 18) + (2,000,000 x 20) + (6,000,000 x 14) calculation = ���������������������� = USD16/barrel price for 10,000,000 crude oil Where crude oil is not sold under square transaction contracts, the natural resource tax calculation price shall be determined as guided at Point 3.1.