ORDINANCE ON NATURAL RESOURCE TAX (AMENDED)

In order to contribute to the protection, exploitation and use of natural resources in a economical, rational and effective manner as well as the environmental protection and ensure the source of revenues for the State Budget;

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam;

Pursuant to the Resolution of the Xth National Assembly's 2nd session on the 1998 law-and ordinance-making program;

This Ordinance provides for natural resource tax.

Chapter I

OBJECTS AND PAYERS OF NATURAL RESOURCE TAX

Article 1.-

1. All natural resources within the inland areas, offshore islands, internal waters, territorial waters, exclusive economic zone and continental shelf of the Socialist Republic of Vietnam are under the entire people's ownership and the unified management of the State.

2. All organizations and individuals that exploit natural resources prescribed in Clause 1 of this Article shall have to pay natural resource tax, except for those specified in Article 3 of this Ordinance.

Article 2.- Objects of natural resource tax prescribed in this Ordinance include:

1. Metallic minerals;

2. Non-metallic minerals, including minerals to be used as common construction materials; exploited earth, natural mineral water and thermal water;

3. Petroleum;

4. Gas;

5. Products of natural forests;

6. Natural aquatic resources;

7. Natural water, excluding natural mineral water and thermal water already prescribed in Clause 2 of this Article;

8. Other natural resources.

Article 3.- In cases where the Vietnamese parties to joint ventures with foreign parties under the Law on Foreign Investment in Vietnam make legal capital contributions with natural resources, the concerned joint venture enterprises shall not have to pay the natural resource tax on the volumes of natural resources used as legal capital contributions by the Vietnamese parties.

Chapter II

TAX CALCULATION BASES AND NATURAL RESOURCE TAX INDEX

Article 4.- The bases for calculating natural resource tax are the actually exploited volume of commercial natural resources, the tax calculation price and the tax rate.

Article 5.- The price for calculating natural resource tax is the selling price of a natural resource product unit at the place of exploitation.

In cases where the selling price of an exploited natural resource is not available, the Government shall determine the natural resource tax calculation price.

Particularly, the price for calculating natural resource tax on natural water used for hydroelectric power generation is the selling price of commercial electricity.

Article 6.- The natural resource tax index is prescribed as follows:

No. Categories and kinds of natural resources Tax rate (%)

1 Metallic minerals (excluding gold and rare earth) 1-5

- Gold 2-6

- Rare earth 3-8

2 Non-metallic minerals (excluding precious gems and coal) 1-5

- Precious gems 3-8

- Coal 1-3

3 Petroleum 6-25

4 Gas 0-10

5 Natural forest products:

a/ Assorted timber (excluding tree branches and tops) 10-40

- Tree branches and tops 1-5

b/ Pharmaceuticals (excluding sandalwood, codonopsis and aloes) 5-15

- Sandalwood, codonopsis and aloes 20-25

c/ Other natural forest products 5-20

6 Natural aquatic resources (excluding sea-slug, abalone, pearl oyster) 1-2

- Sea-slug, abalone, pearl oyster 6-10

7 Natural water (excluding natural mineral water, refined natural water,

bottled or canned) 0-5

- Natural water used for hydroelectric power generation 0-2

- Natural mineral water, refined natural water, bottled or canned 2-10

8 Other natural resources (excluding swallow's nests) 0-10

- Swallow's nests 10-20

On the basis of this tax index, the Government shall stipulate the specific tax rates for each kind of natural resource.

Chapter III

REGISTRATION, DECLARATION

AND PAYMENT OF NATURAL RESOURCE TAX

Article 7.- Organizations and individuals that exploit natural resources shall have to:

1. Make declaration and registration with the tax agencies according to the prescribed form within 10 days from the date they are permitted to exploit natural resources.

In case of merger, consolidation, separation, splitting, dissolution, bankruptcy or change in the exploitation activity, the natural resource-exploiting organizations or individuals shall have to declare to the tax agencies within five days before such merger, consolidation, separation, splitting, dissolution, bankruptcy or change is effected.

2. Abide by all regulations on vouchers, invoices and accounting books as prescribed by the State for each kind of natural resource.

3. Declare the natural resource tax amounts to be paid monthly to the tax agency within the first 10 days of the subsequent month; in cases where no natural resource tax amount arises in a month, the natural resource-exploiting establishments shall still have to declare such and submit the tax declaration forms to the tax agencies. The natural resource-exploiting organizations or individuals shall have to fully declare according to the tax declaration form and be accountable for the accuracy of their declaration.

4. Supply documents, accounting books, vouchers and invoices at the request of the tax agencies.

5. Pay natural resource tax in full and in time to the State budget according to the tax agencies' notices on tax payment. The time limit for tax payment indicated in the notice shall not be later than the 25th of the subsequent month.

Article 8.- The tax agencies shall have the following tasks, powers and responsibilities:

1. Guiding the natural resource-exploiting establishments to comply with the regulations on registration, declaration and payment of natural resource tax;

2. Notifying the natural resource-exploiting establishments of the natural resource tax amounts to be paid and time limits for tax payment;

3. Checking and inspecting the tax declaration, payment and settlement by natural resource-exploiting establishments;

4. Imposing sanctions against tax-related administrative violations and settling complaints about natural resource tax;

5. Requesting tax payers to supply accounting books, invoices, vouchers and other documents and dossiers related to the natural resource tax calculation and payment; requesting credit institutions, banks and other concerned organizations and individuals to supply documents related to the natural resource tax calculation and payment;

6. Filing and using data and documents supplied by natural resource-exploiting establishments and other subjects in accordance with the prescribed regime.

Article 9.-

1. The tax agencies shall have the right to determine the natural resource tax amounts to be paid by natural resource-exploiting organizations and individuals if they:

a/ Fail to comply with or improperly comply with the regulations on accounting, invoices and vouchers;

b/ Fail to make declaration or make improper declaration even past the already notified time limit for submission of declaration forms; or have submitted the declaration forms but the bases for determining the natural resource tax amounts are improperly declared;

c/ Decline to produce accounting books, invoices, vouchers and other necessary documents related to the calculation of natural resource tax amounts;

d/ Exploit natural resources without business registration and such unregistered exploitation is detected.

2. The tax agencies shall base themselves on the survey documents on the situation of the exploitation activity of natural resource-exploiting organizations and individuals or on the tax amounts paid by organizations or individuals that exploit natural resource of the same kind with the similar exploitation scale to determine the payable tax amounts.

In cases where the natural resource-exploiting organizations or individuals disagree with the payable tax amounts determined by the tax agencies, they shall be entitled to lodge complaints with the immediate higher-level tax agency, pending the solution, such organizations or individuals shall still have to pay the tax amounts as determined.

Chapter IV

NATURAL RESOURCE TAX EXEMPTION AND REDUCTION

Article 10.- Natural resource-exploiting organizations and individuals shall be entitled to natural resource tax exemption or reduction in the following cases:

1. Investment projects eligible for investment privileges as prescribed in the Law on Domestic Investment Promotion, which involve exploitation of natural resources (excluding oil and gas), shall enjoy a maximum of 50 per cent reduction of natural resource tax for the first three years as from the commencement of exploitation;

2. Natural resource-exploiting organizations and/or individuals that, due to unexpected natural disasters, sabotages or accidents, suffer from losses of the exploited volume of natural resources which has been declared for tax payment, shall be considered for exemption from the tax amount on the lost volume of natural resources.

3. Offshore fishing of aquatic resources by large-capacity means shall be entitled to natural resource tax exemption for the first five years and 50% natural resource tax reduction for five subsequent years. In case of continued difficulties, natural resource tax reduction may be considered for one to five more years. For cases of offshore aquatic resource exploitation before the effective date of this Ordinance, the starting time for tax exemption or reduction shall be the effective date of this Ordinance and the full duration of tax exemption and/or reduction shall apply as prescribed.

4. Tax exemption shall apply to such natural forest products exploited by individuals as tree branches and tops, firewood and bamboo to serve daily life needs.

5. Natural resource tax exemption shall apply to natural water used for hydroelectric power generation of the generated electricity is not transmitted into the national power grid.

6. Tax exemption shall apply to earth exploited for leveling or fill-up to construct security or defense projects, humanitarian or charity projects, dikes, irrigation works or roads, or for use for certain purposes stipulated by the Government.

The Government shall stipulate in detail cases of tax exemption and reduction prescribed in this Article.

Chapter V

HANDLING OF VIOLATIONS, COMMENDATION

Article 11.- Natural resource-exploiting organiza-tions and/or individuals that violate the Ordinance on Natural Resource Tax shall be handled as follows:

1. If they fail to comply with the provisions on tax registration, declaration and payment, the regulation on accounting and filing vouchers and invoices prescribed in Article 7 of this Ordinance, they shall, depending on the nature and seriousness of their violations, be administratively sanctioned for tax-related administrative violations;

2. If they pay tax amounts or fines later than the prescribed date or the date stated in the tax-handling decision, they shall have to pay, in addition to the full tax amount or fines, a fine equal to 0.1% (one thousandth) of the belated amount per late day.

3. If they falsely declare or evade tax, they shall have to pay, apart from the full tax amount prescribed in this Ordinance, a fine of from one to five times the evaded tax amount, depending on the nature and seriousness of violation; if the evaded tax amount is great or if they, in spite of having been sanctioned for tax-related administrative violations, repeat such violations or if commit other serious violations, they shall be examined for penal liability in accordance with the provisions of law;

4. If they fail to pay tax or fines according to the notice or the tax-handling decisions, they shall be handled as follows:

a/ Deductions shall be made from the money deposited by the concerned natural resource-exploiting organizations or individuals at the banks, treasury or credit institutions to pay tax and/or fines. The banks, treasury or credit institutions shall have to deduct money from the deposit accounts of the concerned natural resource tax payers to pay tax and/or fines into the State Budget according to the handling decisions issued by the tax agencies or the competent agencies before the debts are recovered;

b/ Having their goods and material evidences retained as guaranty for collecting the full amount of tax and/or fines;

c/ Having their property sealed up in accordance with the provisions of law as guaranty for collecting the full amount of tax arrears and/or fines.

Article 12.-

1. The heads of the tax agencies directly in charge of tax collection shall have the right to handle violations committed by natural resource tax payers as prescribed in Clauses 1, 2 and 3, Article 11 of this Ordinance.

2. The directors of Taxation Departments and Bureaus directly in charge of tax collection shall be entitled to apply handling measures prescribed in Clause 4, Article 11 of this Ordinance and transfer the dossiers on violations prescribed in Clause 3, Article 11 of this Ordinance to the competent agencies for handling in accordance with the provisions of law

Article 13.-

1. Tax officers and/or other individuals who abuse their positions and powers to illegally use or appropriate tax money and/or fines shall have to indemnify to the State all the illegally used or appropriated tax amounts and/or fines and shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability in accordance with the provisions of law.

2. Tax officers and/or other individuals who, due to irresponsibility or wrong handling, cause damage to tax payers shall have to compensate for such damage as prescribed by law and shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability in accordance with the provisions of law.

3. Tax officers and/or individuals who abuse their positions and powers to enter into collusion with or cover up people who violate the Ordinance on Natural Resource Tax or commit other violations of this Ordinance shall, depending on the nature and seriousness of their violations, be disciplined or examined for penal liability in accordance with the provisions of law.

4. Any people who obstruct or incite other people to obstruct the enforcement of the Ordinance on Natural Resource Tax shall, depending on the nature and seriousness of violation, be administratively handled or examined for penal liability in accordance with the provisions of law.

Article 14.- Tax agencies and/or tax officers that well accomplish their assigned tasks; organizations and/or individuals that record good merits in the implementation of the Ordinance on Natural Resource Tax; and tax payers that well fulfill tax obligations shall be commended.

The Government shall stipulate in detail the commendation.

Chapter VI

COMPLAINTS, STATUTE OF LIMITATIONS

Article 15.- Tax payers shall have the right to complain about acts committed by tax agencies and/or tax officers which are at variance with the Ordinance on Natural Resource Tax.

Written complaints shall be sent to the tax agencies directly in charge of tax collection within 30 days from the date of receipt of the notices or handling decisions of the tax officers or tax agencies.

Pending a solution, the concerned tax payer(s) shall still have to abide by the notices or handling decisions of the tax agencies. In cases where they continue to complain, they shall comply with current provisions of law.

Article 16.-

1. Upon receipt of tax-related complaints, the tax agencies shall have to consider and settle them within fifteen days from the date of receipt thereof; for complicated cases such time limit may be longer but not exceed 30 days; for cases beyond their jurisdiction, they shall have to send the dossiers or report to the agencies which are competent to handle them and inform the complainants thereof within 10 days from the date of receipt of the complaints.

2. The tax agencies that receive complaints shall have the right to request the complainants to supply dossiers and documents related to their complaints. If the complainants decline to supply such dossiers and documents and fail to produce plausible reasons therefor the tax agencies shall be entitled to refuse to consider and settle the complaints.

3. The tax agencies shall have to refund the wrongly collected tax amounts and/or fines to the tax payers within fifteen days from the date they receive decisions from the higher-level agencies or the competent agencies prescribed by law.

4. When detecting and concluding there is any false tax declaration, tax evasion or mistake, the tax agencies shall have to collect tax arrears, fines or refund tax amounts that occurred within five years before the date of inspection and detection of false declaration, tax evasion or mistake. In cases where natural resource-exploiting organizations or individuals fail to make tax declaration and payment, the time limit for collecting tax arrears and/or fines shall be counted from the time of commencement of their operation.

5. The head of the higher-level tax agency shall have to settle tax-related complaints of tax payers against the lower-level tax agency.

The Finance Minister's decisions to settle tax-related complaints shall be final decisions.

Chapter VII

ORGANIZATION OF IMPLEMENTATION

Article 17.- The Government shall direct the organization of the implementation of the Ordinance on Natural Resource Tax nationwide.

Article 18.- The Minister of Finance shall have to organize and supervise the implementation of the Ordinance on Natural Resource Tax nationwide; and settle complaints and petitions regarding the natural resource tax, which fall under his/her jurisdiction.

Article 19.- The People's Committees of all levels shall, within the ambit of their respective tasks and powers, direct the implementation and supervise the observance of the Ordinance on Natural Resource Tax in their respective localities.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 20.- The Ordinance on Natural Resource Tax (amended) shall take effect from June 1, 1998 and replace the Ordinance on Natural Resource Tax promulgated on March 30, 1990.

For foreign-invested enterprises and foreign parties to business cooperation under contracts already signed before the date of promulgation of this Ordinance which have exploited natural resources and paid natural resource royalty or tax according to the provisions in their investment licenses, they shall comply with such provisions.

Article 21.- The Government shall stipulate in detail and guide the implementation of this Ordinance.

On behalf of the National Assembly Standing Committee

Chairman

NONG DUC MANH