Decree No. 68/1998/ND-CP detailing the implementation of the Ordinance on Natural Resources Tax

Article 1.- All organizations and individuals ol OFFICIAL GAZETTE No.31 (10-11-1998) all economic sectors, including: State enterprises:joint Article 4.- In cases where natural resource- stock companies: limited liability companies: exploiting enterprises are established on the basis of cooperatives: cooperation groups: private enterprises. joint venture contracts, business cooperation contracts production and/or business private households; or product-sharing contracts, the payable natural foreign-invested enterprises or foreign parties to resource tax of such joint venture enterprises or business cooperation contracts under the Law on foreign parties to such contracts must be stated in the Foreign Investment in Vietnam; and other joint venture contracts and calculated into the organizations and/or individuals that exploit natural proportion of products shared to the Vietnamese resources in all forms shall have to pay natural parties. When the exploited products are shared, the resource tax as prescribed in Article l of the Vietnamese parties shall have to pay natural re~ource Ordinance on Natural Resource Tax (amended). tax into the State budget as prescribed by the Budget except for those defined in Article 3 of this Decree. Law.

Article 2.- All kinds of natural resources found Chapter II within the inland areas, offshore islands, internal waters, territorial waters. exclusive economic zones and TAX CALCULATION BASES AND continental shelf under the sovereignty of the Socialist NATURAL RESOURCE TAX INDEX Republic ofVietuam shall be subject to natural resource tax.. including:

Article 5.- The bases for calculating natural resource I. Metallic minerals; tax are the actually exploited output of commercial natural resources, the tax calculation price and the tax 2. Non-metallic minerals, including minerals used rate. as common construction materials and earth exploited for ground-leveling, fill-up and/or building of projects. Article 6.- The actually exploited output of as raw materials or for other purposes; rninernl water commercial natural resources is the quantity, weight and natural thermal water as specified in the Law on or volume of natural resources actually exploited in a Minerals: taxation period, regardless of the purposc(s) of the exploitation of natural resources. 3. Petroleum: being crude oil as specified in Clause 2. Article 3 of the Petroleum Law: Article 7.- 4. Gas: being natural gas as specified in Clause 3, 1. The natural resource tax calculation price is the

Article 3 of the Petroleum Law: selling price of a natural resource product unit at the 5. Natural forest products: including plants and place of natural resource exploitatiou. animals of various species and other products of natural 2. For natural resource of which the selling price forests: has not been set yet, i.e. those exploited for further processing or those containing different compounds. 6. Natural aquatic products: including natural the natural resource tax calculation price shall be animals and plants of various species in seas, rivers, determined on one of the following bases: streams, lakes .... ; - The selling price of the kind of exploited natural 7. Natural water, including: terrestrial water, resource of equivalent value. underground water. except for mineral water and natural themrnl water already specified in Point 2 of - The selling price of the substance in primary form this Article. and the content of such substance in the exploited natural resource: or the prices of the substances in 8. Other kinds of natural resources. primary form and the content of each substance in the natural resource.

Article 3.- In cases \vhere the Vietnamese parties - The selling price of the goods made of the in joint ventures with foreign parties under the Law on exploited natural resource minus the production costs Foreign Investment in Vietnam make their legal capital of such goods. contributions with natural resources. the concerned joint venture enterprises shall not have to pay the 3. For natural water used for hydroelectric power natural resource tax on the Yolumes of natura]resources generation, the natural resource tax calculation price used as legal capital contributed thereto by the is the selling price of c01mnercial electricity: for timber: Vietnamese parties. the selling price at yard 2. No.31 (10-11-1998) OFFICIAL GAZETTE 5 4. For petroleum and gas, the tax calculation prices Chapter IV are specified in Article 47 of Decree No.84/CP of December I 7, 1996 of the Government detailing the NATURAL RESOURCE TAX implementation of the Petroleum Law. EXEMPTION OR REDUCTION The Ministry of Finance shall provide and guide the method of calculating the natural resource tax Article 12.- The natural resource tax shall be calculation prices stipulated in this Article. exempted or reduced in the following cases: The provincial/municipal People's Committees I. Investment projects eligible for investment shall speci(v the specific tax calculation price for each preferences provided for by the Law on Domestic kind of natural resource under the Ministry of Finance ·s Investment Promotion and the Government's guidance. documents detailing the implementation of the Law on Domestic Investment Promotion, which involve the

Article 8.- The natural resource tax index is issued exploitation of mineral resources (except for oil and together with this Decree. gas) shall enjoy maximum of 50 % reduction of natural resource tax for the first three years from the Basing itself on the value of each kind of natural date of starting the exploitation. For prQjccts of this resource, the exploitation conditions and the type which have already started their exploitation requirement of management over each kind of natural activities, the tax reduction shall be considered for the resource in each period, the Ministry of Finance shall remaining duration starting from the effective date of assume the prime responsibility and coordinate with the Ordinance on Natural Resource Tax (amended). the concerned ministries and branches in readjusting the tax rates in the natural resource tax index issued 2. Natural resource-exploiting organizations and/ together with this Decree to make them compatible or individuals that, due to natural calamities, sabotages ·with the tax rate bracket prescribed in Article 6 of the or unexpected accidents, sufTer from losses of their Ordinance on Natural Resource Tax (amended). natural resources which have already been declared and taxed, shall be considered for the exemption from Chapter III the payable amount of natural resource tax on the lost volume of natural resources. In cases where they have already paid natural resource tax, the paid tax amount NATURAL RESOURCE TAX shall be reimbursed or deducted from the payable DECLARATION, REGISTRATION natural resource tax amount of the following taxation AND PAYMENT period if it is so agreed upon by the tax paying organizations and/or individuals.

Article 9,- Organizations and individuals that conduct the exploitation of natural resources shall 3. Organizations and/or individuals engaged in the have to comply with all regulations on declaration, offshore exploitation of aquatic resources with large- registration and payment of natural resource tax capacity means shall be exempt from natural resource prescribed in Article 7 of the Ordinance on Natural tax for the first five years from the date the exploitation Resource Tax (amended). licenses arc granted and cqjoy the 50% natural resource tax reduction for five subsequent years. The Ministry of Finance shall guide in detail the procedures for registration, declaration and payment The Ministry of Aquatic Res(iurces shall consider of natural resource tax. and grant separate licenses to organizations and/or individuals. that conduct offshore exploitation of

Article 10.- Organizations and individuals that aquatic resources. conduct the exploitation of natural resources shall The tax exemption and/or reduction shall be have to strictly comply with the regimes of accounting considered annually. In the course of operation. books and vouchers for goods purchase and/or sale organizations and/or individuals engaged in the and money collection in strict accordance \Vith the offshore exploitation of aquatic resources must promptly current regulations. declare any changes in the conditions for tax exemption or reduction, that may reduce the level of preferences,

Article 11.- The tax authorities at all levels shall to the nearest tax authority for certification. All cases have to properly perform their tasks and exercise their of failure to declare such changes in order to continue powers as stipulated in Articles 8, 9, 12 and 16 of the enjoying the tax exemption and/or reduction shall be Ordinance on Natural Resource Tax (amended). considered tax evasion and handled in accordance with 6 OFFICIAL GAZETTE No.3 l (10-11-1998)

Article 11 of the Ordinance on Natural Resource Tax decisions on case-by-case basis. (amended). The Ministry of Finance shall stipulate the Jn cases where organizations and/or indil'iduals procedures. order and competence to consider the tax engaged in the offshore exploitation of aquatic resources exemption and/or reduction as provided for in this still suffer from losses even after the above-said tax Article. exemption and/or reduction duration, they shall be considered for natural resource tax reduction corresponding to the amount of annual loss for not more Chapter V than 5 subsequent years in a row HANDLING OF VIOLATIONS AND For organizations and/or individuals that had COMMENDATION conducted offshore exploitation of aquatic resources before the effective elate of the Ordinance on Natural

Article 13.- Organizations and individuals that Resource Tax (amended), the tax exemption or commit the natural resource tax-related violations reduction duration shall be calculated from the effective shall be dealt with according to Articles 11 and 13 of date of such Ordinance and in full length as prescribed the Ordinance on Natural Resource Tax (amended). above. 4. Natural resource tax exemption shall apply to Article 14.- Tax authorities and/or tax officers that such natural forest products exploited by licensed well fulfill their assigned tasks; other organizations individuals as timber, tree branches, fire\vood, bamboo and/or individuals that record good achievements in of different species in service of daily life: all cases of the implementation of the Ordinance on the Natural deliberate exploitation and/or wanton destruction of Resource Tax, and tax payers that well fulfill the tax forests shall be dealt with according to the current laws. payment obligation shall be commended and/or rewarded according to the Government's regulations. The Ministry of Finance and the Ministry of Agriculture and Rural Development shall guide the appropriate management measures to ensure that tax Chapter VJ exemption is given to right subjects, encourage the afforestation and forest protection and prevent acts of IMPLEMENTATION ORGANIZATION wanton exploitation or destruction of natural forests.

Article 15.- This Decree takes etrect 15 days after 5. Natural resource tax shall be exempted for natural its signing. The previous stipulations on natural water used for the generation of hydroelectric power, resource tax which are contrary to this Decree arc now which is not transmitted into the national power grid. annulled. 6. Organizations and/or individuals that exploit Foreign-invested enterprises and foreign parties to earth for the following purposes shall be exempt from business cooperation contracts that paid natural the natural resource tax: resource royalty or tax according to the stipulations of - Ground-leveling and/or fill-up for the constrnction their investment licenses before the effective date of of security and defense projects: the Ordinance on Natural Resource Tax (amended) shall continue complying with such stipulations till the - Ground-leveling and/or fill-up for the constrnction expiry of the duration stated in their licenses. of dikes, irrigation works in service of agriculture, forestry and fishery;

Article 16.- The Minister of Finance shall guide - Ground-leveling and/or fi II-up for the constrnction the implementation of this Decree. of projects of humanitarian or charity significance or projects as token of gratitude towards persons with The ministers, the heads of the ministerial-level meritorious services to the revolution: earth exploited agencies, the heads of the agencies attached to the from the allocated or leased land area and used on the Government and the presidents of the People's spot; Cmmnittees of the provinces and cities directly under the Central Government shall have to implement this - Ground-leveling and/or fill-up for the constrnction Decree. of infrastructure projects in mountainous regions (mountainous districts) in service of the socio-economic On behalf of the Government development in the regions; For the Prime Minister - Ground-leveling and/or fill-up for the constn1ction Deputy Prime Minister of key national projects under the Government's NGUYEN TAN DUNG No.31 (10-11-1998) OFFICIAL GAZETTE 7 THE NATURAL RESOURCE TAX INDEX DETAILING THE IMPLEMENTATION OF THE ORDINANCE ON NATURAL RESOURCE TAX (AMENDED) Issued together with Decree No. 68/1998/ND-CP of the Government of September 3, 1998 No. Groups and categories of natural resources Tax rate(%) I Metallic minerals I. Minerals of ferrous metals (iron, manganese, titanium, etc.) 2 2. Minerals of non-ferrous metals: - Mineral sand gold 2 ,, - Gold nuggets .) - Rare earths 4 - Platinum, tin, tungsten, silver, antimony 5 - Lead, zinc, aluminum, bauxite, copper, nickel, cobalt, molybdenum, mercury, magnesium, vanadium, platinum. 3 - Minerals of other non-ferrous metals 2 II Non-metallic minerals (except for thermal water and natural mineral water specified in Group 7) 1 Non-metallic minerals used as common construction materials: - Earth exploited for ground-leveling, fill-up or huilding of projects l - Non-metallic minerals used as other common construction materials (stone, sand, gravel, earth for brick-ni.aking, ... ) 2 2 Non-metallic minerals used as high-quality construction materials (granite, ,, donomite, fire clay. quartzite .... ) _) ,, .J Non-metallic minerals used in industrial production (pyrite, apatite. phosphorite. kaolin. mica, technical quartz. stone for lime and cement manufacture, sand for glass manufacture . . ) 4 4 Coal: - Pit anthracite coal 1 - Open-cast anthracite coal 2 - Lignite, fat coal 3 - Other coals 2 5 Gems: a) Diamond, ruby, sapphire, emerald, alexandrite, precious black opal 8 b) Adrite, rodolite, pyrope, berine, spine!, topaz, crystalline quartz (in bluish-purple, greenish-yellow or orange). chrysolite, precious pal (in white or scarlet), feldspar, birusa, nephrite 5 ,, c) Other gems .J 6 Other non-metallic minerals 2 Ill Petroleum (1) IV Gas (2) 8 OFFICfAL GAZETTE No.31 (10-11-1998) V Natural forest products I Log timber of various kinds: - Group I 40 - Group II 35 - Groups III and IV 25 - Groups V, VI, VII and VIII 15 2 Pit props 15 3 Wood used as raw materials for paper production (Bo tree, pine .. ) 20 4 Wood used as masts, bottom stakes 20 5 Impregnated wood, mangrove wood 25 6 Tree branches and tops, firewood 5 7 Bamboo of all species 10 8 Pharmaceutical materials: - Sandalwood, codonopsis and aloes 25 - Anise, cinnamon, cardamom, liquorice 10 - Other pharmaceutical materials 5 9 Other natural forest products - Forest birds and animals (those allowed to be exploited) 20 - Other natural forest products 5 VI Natural aquatic resources - Pearl, abalone, sea-slug 10 - Shrimp, fish, cuttlefish and other aquatic resources 2 VII Natural water l Natural mineral water; purified natural water, bottled or canned 4 2 Natural water used for hydroelectric power generation 2 ~ _) Natural water exploited in service of production sectors (other than those specified in Points l and 2): ~ a) Used as main or auxiliary raw materials to create material content of products .) b) Used in common service of production (industrial hygiene, cooling, steaming, ... ) I c) Natural water used for production of clean water, in service of agriculture, forestry, fishery or salt production, and natural water exploited from dug wells and drilled wells in service of daily life 0 4 Natural water exploited for purposes other than those stipulated in Points 1, 2 and 3 0 VIII Other natural resources - Swallow's nests 20 - Other natural resources 10 (l) (2): Tax rates for petroleum and gas shall be applied according to the Petroleum Law and Decree No.84-CP of February 17, 1996 of the Government detailing the implementation of the Petroleum Law.-