Responded by units: The Ministry of Finance

Official letter: No 10798/BTC - CST, dated: 2019-09-16

Responded contents:

1. Regarding export tax on kaolin and Feldspar:

Pursuant to the Decree No. 125/2017 / ND-CP dated November 16, 2017 of the Government:

+ Stone items (bodhisattva stone) of heading 25.29 (item codes 2529.10.00 and 2529.10.90) have an export tax rate of 10% (tax / export bracket under the Law on Export Tax and Import Tax No. 107/2016 / QH13 is: 5-30%). The export turnover of Feldspar items in 2017 and 2018 was 5.56 thousand USD and 36.4 thousand USD.

+ The item of calcium carbonate powder under item code 2517.49.00.10 has an export tax rate of 5% (export tax bracket under Tax Law No. 107/2016 / QH13 is: 5-35%). Export turnover of this item in 2017 and 2018 was 41.7 million USD and 49.65 million USD.

+ Cao Lanh (Kaolin) item under item 2507.00.00 has an export tax rate of 10% (export tax bracket under the Export Tax and Import Tax Law No. 107/2016 / QH13 is: 5-30% ). The export turnover of 25070000 item in 2017 and in 2018 was 3.62 million USD and 4.75 million USD.

The export tax rates for the above goods items (stipulated in Article 10 of the Law on Tax No. 107/2016 / QH13 on the principles of promulgating tax expressions and tax rates are as follows:

"In accordance with the State's socio-economic development orientations and commitments on export and import taxes in international treaties to which the Socialist Republic of Vietnam is a signatory ... uniformly apply the tax rates to goods of the same nature, structure, utility and similar technical features; the export tax rate increases from component to raw material ". Accordingly, the above tax rates have contributed to restricting the export of mineral resources in the raw form, ensuring to serve domestic demand, encouraging investment and deep processing in the country to raise the value of export resources. . Therefore, it is suggested to comply with current regulations.

2. Regarding royalties on Kaolin and Felspat articles:

 Clause 1, Article 6 of the 2009 Law on Royalties:

1.The royalty – liable price is the exploiter’s selling price of a unit of natural resource product, exclusive of value – added tax.

• Clause 4, Article 6 of the 2009 Law on Royalties:

“4. The Provincial level People’s Committee shall set specific royalty – liable prices of natural resources for which unit selling prices of natural resource products cannot be determined, except crude oil. natural gas, coal gas and natural water used for hydropower generation.

The export tax rates of the above-mentioned goods items (defined in Article 10 of the Law on Tax No. 107/2016 / QH13 on the principles of promulgating tax expressions and tax rates are as follows:

"Suitability for the orientation of socio-economic development and commitments on export and import duties in international treaty to which Socialist Republic of Vietnam is a signatory... Uniform imposition of duty rates upon goods of the same nature, composition, uses, or technical features; import duties are regressive from finished products to raw materials; export duties are progressive from finished products to raw materials". Accordingly, the above tax rates have contributed to restricting the export of mineral resources in the raw form, ensuring to serve domestic demand, encouraging investment and deep processing in the country to raise the value of export resources. . Therefore, it is suggested to comply with current regulations.

2.  Regarding royalties on kaolin and agar articles:

Clause 1, Article 6 of the 2009 Law on Royalties:

“ The royalty – liable price is the exploiter’s selling price of a unit of natural resource product, exclusive of value – added tax”.

. Clause 4, Article 6 of the 2009 Law on Royalties:

“4. The Provincial level People’s Committee shall set specific royalty – liable prices of natural resources for which unit selling prices of natural resource products cannot be determined, except crude oil. natural gas, coal gas and natural water used for hydropower generation.

Points b and d, Clause 5, Article 4 of the Decree 12/2015 / ND-CP dated February 12, 2015 of the Government detailing a number of articles of the Law Amending and Supplementing Tax Laws and amending a number of articles Tax decrees stipulates:

 “ 5. Amends and supplements Clause 5, Article 4 as follows:

The Ministry of Finance shall:

... b) Presidse over and cooperates with relevant agencies to set the price bracket for calculation of royalties applicable to groups and types of resources with similar physical and chemical properties;

... d) Develops a database of taxable prices for unified implementation across the country.

Article 6 of the Circular No.152 / 2015 / TT-BTC dated October 2, 2015 of the Ministry of Finance guiding on royalties:

 “Taxable price of a natural resource is the selling price of a unit of natural resource-derived products imposed by the extracting entity exclusive of VAT. This price must not fall below the taxable price imposed by the People’s Committee of the province. Otherwise, the taxable price imposed by the People’s Committee of the province shall apply”.

- Points 5.1, 5.2 /: 5: 3, Clause 5, Article 6 of the Circular 152/2015 / TT-BTC stipulates:

“ The taxable price schedule shall contain information as the basis for determination of severance tax on extraction of natural resources in the province in accordance with policies and law, including: norms for use of natural resources as the basis for conversion from natural resource-derived products or industrial products into quantity of extracted natural resources in the natural resource-derived products and industrial products; corresponding taxable prices of extracted natural resources and natural resource-derived products”:...

“5.2. Taxable prices imposed by the People’s Committees of provinces must conform to the bracket of taxable prices promulgated by the Ministry of Finance.. ”

“5.3. The agencies appointed by the People’s Committee of the province shall cooperate with relevant agencies in proposing the taxable price schedule to the People’s Committee of the province by December 31 for announcement on January 01 of the succeeding year. In the year, if the selling price of a type or resource fluctuates beyond the bracket of the Ministry of Finance, the Ministry of Finance must be notified to make prompt adjustments.”

Based on the above provisions:

• The price for calculation of royalties tax is the selling price of a natural resource product unit of an exploiting organization or individual that has not yet included value added tax but is not lower than the royalty calculation price set by the provincial People's Committee.

• The Ministry of Finance promulgates the royalty calculation price bracket for groups and types of resources with similar physical and chemical properties as a basis for the provincial People's Committee to issue the royalty calculation price list, in order to ensure consistency across the country and avoid large discrepancies in taxable prices between localities. In case of large fluctuations in the selling price of natural resources, the provincial People's Committee will notify the Ministry of Finance for timely regulation.

• Annually, based on the actual situation in each locality, the provincial People's Committee issues the price table for calculating royalties in accordance with the law policies and the tax calculation price frame issued by the BTC.

Therefore, it is not appropriate to propose a reduction of royalty for the products of Kaolin, Feldspat and to unify the price for calculating royalties for all businesses nationwide.