Circular No. 18/2003/TT-BTC dated March 19, 2003 of the Ministry of Finance guiding the regime of collection, payment, management and use of fee for exclusive mineral exploration

CIRCULAR

GUIDING THE REGIME OF COLLECTION, PAYMENT, MANAGEMENT AND USE OF FEE FOR EXCLUSIVE MINERAL EXPLORATION

Pursuant to the Charge and Fee Ordinance No. 38/2001/PL-UBTVQH of August 28, 2001;

Pursuant to the Governments Decree No. 57/2002/ND-CP of June 3, 2002 detailing the implementation of the Charge and Fee Ordinance;

Pursuant to the Governments Decree No. 76/2000/ND-CP of December 15, 2000 detailing the implementation of the Mineral Law (amended);

The Ministry of Finance hereby guides the regimes of collection, remittance, management and use of fee for exclusive mineral exploration as follows:

I. GENERAL PROVISIONS:

1. This Circular shall apply to Vietnamese as well as foreign organizations and individuals that are granted permits for exclusive mineral exploration in the Vietnamese territory.

2. In this Circular, the following terms shall be construed as follows:

a) Minerals means natural resources lying underground or on land surface in the forms of natural concentrations of minerals, useful mineral substances in solid, liquid or gaseous form, which are exploitable at present or in the future.

Minerals and mineral substances lying at dumping sites of mines, which can be re-exploited later, are also minerals.

b) Exclusive mineral exploration means that Vietnamese as well as foreign organizations and individuals are licensed by competent State agencies to be the only units that have the right to

II. FEE PAYERS AND LEVELS

1. Vietnamese as well as foreign organizations and individuals that are granted permits for exclusive mineral exploration shall have to pay fee therefor according to the provisions of this Circular, except for the following cases where fee shall not be paid:

- The States economic non-business units tasked by the State to conduct mineral exploration and prospection with capital allocated from the State budget.

- Request for the correction of errors in the permits for exclusive mineral exploration due to faults of persons granting such permits.

- Application for the extension or return of exploration permits, or returning parts of the exploration areas under the Governments decisions.

2. The levels of fee for exclusive mineral exploration:

The fee for exclusive mineral exploration to be paid for each permit shall be calculated on the area and the duration stated in that permit (including the extended duration of the permit). In order to simplify the fee calculation and collection, the fee for permit granting shall be calculated as follows:

- For 12-month term permits, the fee shall be calculated according to the collection level for the first year.

- For permits with a term of between 12 months and under 24 months:

+ For the first 12 months, the fee shall be calculated according to the collection level for the first year.

+ For the remaining months, the fee shall be calculated according to the collection level of the second year; but if the permits have a term of under 18 months (remain valid for less than 6 months), the fee shall be equal to half of the fee collected for the whole year, if the permits have a term of over 18 months, the fee shall be equal to the collection level for the whole year

3. The fee for exclusive mineral exploration shall be collected in Vietnam dong, if the organizations and/or individuals wish to make payment in foreign Vietnam dong at the actual average exchange rate on the inter-bank foreign currency market announced by the State Bank of Vietnam at the time of fee collection.

4. Fee for exclusive mineral exploration shall not be liable to tax.

III. ORGANIZATION OF FEE COLLECTION, PAYMENT, MANAGEMENT AND USE

1. The agencies granting permits for exclusive mineral exploration shall have to organize the collection of the fee for exclusive mineral exploration.

2. The agencies granting permits for exclusive mineral exploration shall have to:

a) Publicly post up at their offices the fee levels for exclusive mineral exploration.

b) When collecting the fee for exclusive mineral exploration, hand over to fee payers the collection receipts issued by the Ministry of Finance (The General Department of Tax); the collection receipts shall be received at the Tax Departments of the localities where the agencies granting permits for exclusive mineral exploration are headquartered and be managed and used according to the Finance Ministrys stipulations.

The agencies granting permits for exclusive mineral exploration shall have to open accounts of the collected amounts of fee for exclusive mineral exploration at the State Treasuries where their transactions are carried out, particularly for the amounts collected in cash, they must list and deposit them into the State Treasuries every day or once every 15 days at most.

c) Register, declare and remit the fee for exclusive mineral exploration to the Tax Departments of the localities where they are headquartered.

d) Make payment and settlement of fee-collection receipts and the settlement of fee collection and remittance with the tax offices directly managing them strictly according to current regulations, ensuring that all fee collection and spending items are fully reflected in the annual cost estimates and financial settlements of the agencies granting permits for exclusive mineral exploration.

3. The agencies granting permits for exclusive mineral exploration shall be allowed to deduct 30% of the total fee amounts actually collected before remitting them into the State budget to cover expenses for the collection of fee for exclusive mineral exploration according to the following specific contents:

- Payments of wages, remuneration, allowances and wage- or remuneration-based contributions to laborers hired from outside and directly engaged in fee collection according to current regimes (including payment of overtime pays to officials and employees of the agencies granting permits for exclusive mineral exploration as prescribed by regime).

- Expenses in direct service of the fee collection such as: stationery, office supplies, telephone, electricity and water charges, working-trip and official-duty allowances according to current criteria and norms.

- Expenses for regular repair and overhaul of assets and machinery in direct service of fee collection.

- Procurement of supplies, fuels and other expenses related to the collection of fee for exclusive mineral exploration.

- Deductions for the funds for reward to officials and employees directly engaged in the collection of fee for exclusive mineral exploration. The annual average per-head deduction levels of reward funds shall not exceed one months paid wages.

The whole amounts of fee for exclusive mineral exploration allowed to be deducted according to the above-mentioned regulations shall be deposited at the State Treasuries of the localities where the permit-granting agencies are headquartered and the agencies granting permits for exclusive mineral exploration shall have to use them for the right purposes. All spending items must have lawful vouchers as prescribed by current regimes, and at year-end, the collection and spending settlement must be made strictly according to the actual figures and in compliance with regimes. The agencies granting permits for exclusive mineral exploration shall be allowed to transfer (or deduct) the difference between the deducted amounts and the finally settled amounts to the subsequent year figure for continued spending according to the prescribed regimes.

4. For the total collected amounts of fee for exclusive mineral exploration (including cash and bank transfers), after making the deduction of 30% as prescribed at Point 3 of this Section, the remainder of 70% must be remitted into the budget (chapter, category and item in the State budget index) within the time limits and according to the procedures prescribed in the Charge and Fee Ordinance and its guiding documents

5. Elaboration and execution of estimates on collection and spending of fee for exclusive mineral exploration.

Annually, basing themselves on the levels of fee for exclusive mineral exploration, the spending contents guided in this Circular and current financial spending regimes, the agencies granting permits for exclusive mineral exploration shall elaborate the estimates on fee collection and spending according to the current State budget index and send them to their superior managing agencies and finance agencies of the same levels for consideration and approval.

Basing themselves on the annual collection and spending estimates already approved by the competent agencies, the agencies granting permits for exclusive mineral exploration shall elaborate quarterly detailed collection and spending plans according to the State budget index and send them to their managing agencies and the State Treasuries where their transactions are carried out for use as basis for collection and spending control.

6. Final settlement of collection and spending of fee for exclusive mineral exploration.

The agencies granting permits for exclusive mineral exploration shall have to open accounting books for recording, accounting and settling the collection and spending of fee for exclusive mineral exploration according to the current administrative and non-business financial regimes. To make settlement of the collection receipts and the fee amounts already remitted into the State budget with the tax offices directly managing them and submit reports on the settlement of collection and spending of fee for exclusive mineral exploration to the tax offices, superior managing agencies and finance agencies of the same levels before March 31 of the year following the plan year and remit fully the deficit fee amounts into the State budget within 10 days as from the date of submitting reports.

The superior managing agencies of the agencies granting permits for exclusive mineral exploration shall have to inspect, sum up and send final settlement reports to the finance agencies of the same levels; the finance agencies shall verify and issue notices of approval of the settlements together with the annual final settlements of the managing agencies according to the provisions of the current Law on State Budget.

IV. IMPLEMENTATION ORGANIZATION

1. The provincial/municipal Finance-Pricing Services, the agencies competent to grant permits and the payers of fee for exclusive mineral exploration shall have to strictly comply with the provisions of this Circular.

2. This Circular takes effect 15 days after it is published on the Official Gazette.

All previous regulations on fee for exclusive mineral exploration are hereby annulled. Particularly for cases where permits for exclusive mineral exploration have been signed before the effective date of this Circular and remain valid, such permits shall not need to be re-granted and the fee for exclusive mineral exploration shall not be collected.

In the course of implementation, if meeting with any problems, agencies organizations and individuals are requested to report them to the Ministry of Finance for study and consideration.