Vietnam’s Natural Resource Tax 2023

Vietnam’s mining industry is receiving a huge amount of interest from foreign miners on reports that the country possesses the third-highest reserves of rare earths. Companies engaged in the extraction of natural resources in Vietnam are subject to tax obligations on these resources, which are detailed below.

Rare earth mining in Vietnam was at the top of the agenda when the President of the United States was in Vietnam back in September. Keen to reduce its dependence on China for these unique metals, the US has been looking for alternative suppliers, and with what is estimated to be the third-largest rare earth reserve in the world, Vietnam has emerged as one possible option.

These resources, however, are limited. And, as with most countries around the world, recognizing the finite nature of these resources, the Vietnamese government has developed a set of natural resource taxes. These are largely dependent on the type of resource to be extracted and are sometimes used as an incentive to develop particular areas of resource extraction. For example, oil and gas, and coal projects often receive discounted tax rates to encourage development in these sectors (See table below).

These taxes are outlined in Resolution No. 084/2015/UBTVQH13.

See also: Vietnam’s Rare Earth Mining Industry: An Overview

Who pays Vietnam’s natural resources tax?

Industries are liable for national resource tax (NRT) if they are using or developing Vietnam’s natural resources, such as metallic and non-metallic minerals, crude oil, natural gas, petroleum minerals, forest products (except for animals), aquatic products, natural water, and swallow’s nests.

Details of the specific payees are as follow:

• For enterprises that are a part of a joint venture basis, the joint venture enterprise will pay the tax;
• For foreign and Vietnamese parties joined by a business cooperation contract to exploit natural resources, the contract should specify the entity responsible for paying the tax; and
• For small-sized organizations and individuals exploiting and selling natural resources to other organizations and individuals that commit to declare and pay the NRT on behalf of the natural resource exploiter, the purchaser will pay the tax.

Natural resources tax rates

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Tax rates vary depending on the natural resources being exploited and are applied to the production output at a specified taxable value per unit. Various methods are available for the calculation of the taxable value of the resources, including cases where the commercial value of the resources cannot be determined.

General tax rates

Natural Gas, Coal, and Crude Oil

Resource extraction for foreign firms

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Foreign investment in resource extraction in Vietnam is permitted and there are a number of foreign firms already operating in several different sectors. That said, getting started for new market entrants can be daunting. Natural resource extraction involves a number of government departments and a lot of red tape. From environmental impact reports to site clearance, to local approvals, and taxes, there are a myriad of hurdles foreign firms may need to jump. With this in mind, foreign firms that need support accessing Vietnam’s natural resources industries should contact the local, boots-on-the-ground business advisory experts at Dezan Shira and Associates.

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