THE MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 42/2007/TT-BTC
Hanoi, April 27, 2007
 
CIRCULAR
GUIDING THE IMPLEMENTATION OF THE GOVERNMENT’S DECREE No. 68/1998/ND-CP OF SEPTEMBER 3, 1998, DETAILING THE IMPLEMENTATION OF THE ORDINANCE ON ROYALTIES (AMENDED AND DECREE No. 147/2006/ND-CP OF DECEMBER 1, 2006, AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF DECREE No. 68/1998/ND-CP
Pursuant to the Ordinance on Royalties (amended) promulgated by the National Assembly Standing Committee on April 16, 1998;
Pursuant to the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, detailing the implementation of the Ordinance on Royalties (amended);
Pursuant to the Government’s Decree No. 147/2006/ND-CP of December 1, 2006, amending and supplementing a number of articles of the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, detailing the implementation of the Ordinance on Royalties (amended);
Pursuant to the Prime Minister’s Decision No. 197/2003/QD-TTg of September 23, 2003, on the trial implementation of the mechanism of tax self-assessment and self-payment by production and business establishments;
Pursuant to the Prime Minister’s Prime Minister’s Decision No. 161/2005/QD-TTg of June 30, 2005, on expansion of the trial implementation of the mechanism of production and business establishments’ self-assessment and self-payment of special consumption tax at the domestic production stage; royalties; house and land tax; income tax on high income earners and license tax;
Pursuant to the Government’s Decree No. 77/2003/ND-CP of July 1, 2003, defining the functions, competent, obligations and organizational structure of the Ministry of Finance,
The Ministry of Finance guides the implementation of the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, and Decree No. 147/2006/ND-CP of December 1, 2006, amending and supplementing a number of articles of the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, detailing the implementation of the Ordinance on Royalties (amended) as follows:
 
Part I
TAXPAYERS AND TAXABLE OBJECTS
I. TAXPAYERS
Under Article 1 of the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, detailing the implementation of the Ordinance on Royalties (amended), organizations and individuals of all economic sectors, including state companies, joint-stock companies, limited liability companies, cooperatives, private enterprises, with foreign-invested enterprises and foreign parties to business cooperation contracts, business and production households and other organizations and individuals, irrespective of business lines and trades, scope and form of operation, which exploit natural resources under the provisions of Vietnamese law shall make registration, declaration and payment of royalties according to Article 1 of the Ordinance on Royalties (amended). Some cases are specified as follows:
1. Foreign-invested enterprises and foreign parties to business cooperation contracts that are paying natural resources levies or royalties at the specific levels stipulated in their investment licenses issued before June 1, 1998, continue to pay such levies or royalties till the expiration of the issued licenses. If their investment licenses are extended after the effective date of this Circular, they shall comply with the guidance in this Circular.
2. According to Article 3 of the Ordinance on Royalties (amended) and Article 3 of the Government’s Decree No. 68/1998/ND-CP of September 3, 1998, when the Vietnamese party to a joint venture with a foreign party operating under of the Law on Foreign Investment in Vietnam (now the Investment Law) contributes its share of legal capital in the form of natural resources as specified in the investment license, the joint venture enterprise is not required to pay royalties on the natural resources which the Vietnamese party contributes to the legal capital. Every three months and six months, the Vietnamese party shall make declarations of natural resources already contributed as capital and report them to the Ministry of Finance for recording as state budget capital and for management in accordance with current regulations.
3. For enterprises established between Vietnamese party and foreign party in the form of joint venture, business cooperation contract or product-sharing contract, the royalties to be paid by the joint venture enterprise or by the foreign party shall be stated in the joint venture contract, business cooperation contract or product-sharing contract and, if so agreed, included in the portion of products distributed to the Vietnamese party. When products are shared, the Vietnamese party shall pay the royalties on the whole exploited quantity of natural resources into the state budget in accordance with the Budget Law.
4. When natural resources banned from exploitation are seized, confiscated and permitted for sale, the selling organizations shall fully include the royalties in the sale prices and remit the proceeds into the budget.
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