| THE MINISTRY OF FINANCE ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------- |
| No. 32/2009/TT-BTC | Hanoi, February 19, 2009 |
CIRCULAR
GUIDING THE IMPLEMENTATION OF TAX PROVISIONS APPLICABLE TO ORGANIZATIONS AND INDIVIDUALS CONDUCTING PETROLEUM PROSPECTING, EXPLORATION AND EXPLOITATION ACTIVITIES UNDER THE PETROLEUM LAW
Pursuant to the Petroleum Law and its guiding documents;
Pursuant to tax laws and ordinances and current guiding documents;
Pursuant to Tax Administration Law No. 78/2006/QH11 of November 29, 2006, and the Government’s decrees detailing the implementation of the Tax Administration Law;
Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;
The Ministry of Finance guides the implementation of tax provisions applicable to organizations and individuals conducting petroleum prespecting, exploration and exploitation activities under the Petroleum Law as follows:
Part I.
GENERAL PROVISIONS
Article 1. Scope of application
The guidance in this Circular applies to organizations and individuals (below referred to as contractors) conducting activities of prespecting, exploring and exploiting crude oil and condensate (below collectively referred to as crude oil) or natural gas, associated gas and coal gas (below collectively referred to as natural gas) in Vietnam under the Petroleum Law.
Article 2. Taxpayers
1. For petroleum contracts signed in the form of product-sharing contract, taxpayers are executives.
2. For petroleum contracts signed in the form of joint-administration contract, taxpayers are joint-administration companies.
3. For petroleum contracts signed in the form of joint-venture contract, taxpayers are joint-venture enterprises.
4. In cases where the Vietnam National Petroleum Group or its attached corporations or companies conduct crude oil or natural gas survey, exploration and exploitation activities by themselves, taxpayers are the Vietnam National Petroleum Group or its attached corporations or companies.
Article 3. Currencies used for tax payment
In case crude oil or natural gas is sold in US dollar or another freely convertible foreign currency, the currency used for payment of taxes on crude oil or natural gas exploitation, including export duty, royalties and enterprise income tax, is the US dollar or that freely convertible foreign currency.
In case crude oil or natural gas is sold in Vietnam dong, the currency used for payment of taxes on crude oil or natural gas exploitation, including export duty, royalties and enterprise income tax, is Vietnam dong.
In case crude oil or natural gas is sold in both the US dollar or another freely convertible foreign currency and Vietnam dong, the currency used for payment of taxes on crude oil or natural gas exploitation, including export duty, royalties and enterprise income tax, is Vietnam dong.
The conversion of US dollar or other freely convertible foreign currencies into Vietnam dong for tax payment shall be made at the average inter-bank foreign exchange rate announced by the State Bank of Vietnam at the time of tax payment.
Article 4. Places of tax registration, declaration and payment
1. Places of tax registration, declaration and payment (excluding import duty and export duty) are provincial-level Tax Departments of localities where taxpayers’ principal executive offices are located.
2. For petroleum contracts under which exploitation activities have been carried out before the effective date of this Circular, the places of tax registration, declaration and payment comply with the guidance provided before the effective date of this Circular.
Article 5. Determination of taxable prices of crude oil or natural gas in case crude oil or natural gas is not sold under arm’s length trading contracts
In case crude oil or natural gas is not sold under arm’s length trading contracts, tax administration agencies (tax offices and customs offices) shall determine taxable prices according to the following principles:
- For crude oil: The taxable price is the arithmetic mean of the sale prices of crude oil of the same category on the international market in 3 weeks in a row: the week before, the week of and the week after the sale of crude oil. Taxpayers shall supply tax offices with information on the composition and quality of crude oil being exploited. When necessary, tax offices shall refer to the sale prices on the WTI market (USA), Brent market (England) and Platt’s market (Singapore) or consult competent state management agencies to determine the price of crude oil being exploited by taxpayers.
- For natural gas: The taxable price is the sale price of natural gas of the same category on the market, taking the place of delivery and other relevant factors into account. When necessary, tax administration agencies may consult competent state agencies to determine the price of natural gas being exploited by taxpayers.
Article 6. Other general provisions
1. In case an organization or individual conducts petroleum survey, exploration and exploitation activities under different petroleum contracts, tax provisions guided in this Circular shall be separately applied to each petroleum contract.
2. In case contractors to petroleum contracts in the form of product-sharing contract or joint-administration contract receive the divided contractual shares in crude oil or natural gas and take responsibility to sell these divided shares, the declaration and payment of taxes on crude oil or natural gas exploitation shall be made under separate guidance.
3. Other issues of tax administration not yet specified in this Circular comply with current regulations on tax administration.
Part II.
GUIDANCE ON THE IMPLEMENTATION OF TAX PROVISIONS
