THE MINISTRY OF FINANCE
 -------
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
----------
No. 05/2006/TT-BTC
Hanoi, January 19, 2006
 
CIRCULAR
GUIDING NATURAL RESOURCE TAX ON NATURAL WATER USED FOR HYDROELECTRICITY GENERATION
Pursuant to the Ordinance on Natural Resource Tax (amended) promulgated on April 16, 1998, by the National Assembly Standing Committee;
Pursuant to the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, detailing the implementation of the Ordinance on Natural Resource Tax (amended);
Pursuant to the Government’s Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, tasks, powers and organizational structure of the Finance Ministry;
In order to suit the new organizational characteristics of the power industry and the strategy for development of Vietnam’s power industry; make the calculation and declaration for payment of natural resource tax on natural water used for hydroelectricity generation easier; and further reform administrative procedures in taxation, the Finance Ministry hereby guides the calculation and declaration for payment of natural resource tax on natural water used for hydroelectricity generation as follows:
I. SUBJECTS AND SCOPE OF APPLICATION
Hydroelectricity generation establishments which use natural water for hydroelectricity generation shall declare and pay water resource tax under this Circular’s guidance.
II. BASES FOR CALCULATION, DECLARATION AND PAYMENT OF NATURAL RESOURCE TAX ON NATURAL WATER USED FOR POWER GENERATION
1. Tax bases: Bases for calculation of natural resource tax on natural water used for hydroelectricity generation in a tax period are commodity hydroelectricity revenue and tax rate. The method of calculating commodity hydroelectricity revenue is as follows:
Price of 1 kWh
            Commodity               Hydroelectricity                 of  hydroelectricity
            hydroelectricity =          output on             x           for  calculating
            revenue                      outgoing feeder                water  resource tax
Hydroelectricity output on outgoing feeder means the electricity volume sold by the generation establishment to an electricity purchaser and determined according to the electricity volume figure indicated in the outgoing feeder meter and certified by the electricity purchaser and seller.
The natural resource tax rate applicable to natural water used for hydroelectricity generation is 2%.
The price of 1 kWh of hydroelectricity for calculating water resource tax is fixed at VND 700.
 
Natural
            resource tax                     Hydroelectricity    
         on water used for       =             output on              x   VND 700          x            2%
          hydroelectricity                   outgoing feeder    
              generation
Click Download to see full text