Circular No. 66/2016/TT-BTC dated April 29, 2016 of the Ministry of Finance guiding the implementation of the Government’s Decree No. 12/2016/ND-CP of February 19, 2016 on environmental protection charge on mineral exploitation

CIRCULAR

Guiding the implementation of the Government’s
Decree No. 12/2016/ND-CP of February 19, 2016, on environmental protection charge on mineral exploitation[1]

Pursuant to the National Assembly Standing Committee’s Ordinance No. 38/2001/PL-UBTVQH10 on Charges and Fees of August 28, 2001;

Pursuant to the Government’s Decree No. 57/2002/ND-CP of June 3, 2002, detailing the Ordinance on Charges and Fees, and Decree No. 24/2006/ND-CP of March 6, 2006, amending and supplementing a number of articles of Decree No. 57/2002/ND-CP;

Pursuant to the Government’s Decree No. 12/2016/ND-CP of February 19, 2016, on environmental protection charge on mineral exploitation;

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Tax Policy Department, the Ministry of Finance guides the collection, payment and management of the use of environmental protection charge on mineral exploitation prescribed in the Government’s Decree No. 12/2016/ND-CP of February 19, 2016, as follows:

Article 1.Scope of regulation and subjects of application

1. This Circular guides the collection, payment and management of the use of environmental protection charge on mineral exploitation according to Decree No. 12/2016/ND-CP.

2. Subjects of application are organizations and individuals engaged in mineral exploitation, state agencies, and organizations and individuals involved in the management and collection of environmental protection charge on mineral exploitation.

Article 2.Charge calculation method

1. The payable amount of environmental protection charge on mineral exploitation  in a charge payment period shall be calculated according to the following formula:

F = [(Q1 x f1) + (Q2 x f2)] x K

In which:

- F: the payable environmental protection charge amount in the period;

- Q1: the volume of earth and stone excavated and discharged in the period (m³);

- Q2: the volume of crude ore exploited in the period (ton or m³);

- f1: the charge rate applicable to earth and stone excavated and discharged, which is VND 200/m³;

- f2: the charge rate applicable to each type of exploited mineral (VND/ton or VND/m³);

- K: the charge calculation coefficient based on the method of exploitation, which is:

+ 1.05, for open-cast mining (including also hydraulic mining such as mining of titan, sand or gravel from riverbeds);

+ 1, for pit mining and other methods of mining (exploitation of crude oil, natural gas, natural mineral water and other cases).

2. The volume of earth and stone excavated and discharged in the process of coal mining continues to be free of charge through the end of 2017.

3. The volume of earth and stone excavated and discharged in a charge payment period (Q1) shall be determined based on documents of a mining project approved by competent state agencies or its environmental impact assessment report and relevant documents approved by competent state agencies.

The payable amount of environmental protection charge on the volume of earth and stone excavated and discharged arising in a charge payment period shall be determined based on the volume of earth and stone excavated per the volume of crude ore exploited in the period (ton or m³).

Example: With an average stripping coefficient of 0.7 m³/ton of ores, in June 2016, an iron ore exploitation project in Bac Kan exploited 10,000 tons of iron ore, the payable amount of environmental protection charge on this month’s volume of earth and stone excavated and discharged shall be calculated as follows:

10,000 x 0.7 x VND 200/m³= VND 1,400,000

In case the environmental impact assessment report and relevant documents included in the dossier of a mining project contain no information on the volume of earth and stone excavated and discharged, charge declaration and payment shall be based on the volume of earth and stone actually excavated and discharged in the period.

4. The volume of crude ore exploited in a charge payment period (Q2) used for determining the payable environmental protection charge amount is the volume of crude ore actually exploited in the period, regardless of exploitation purposes (for sale, barter, internal consumption, reserve for subsequent production or other purposes) and exploitation technology (manual or mechanical) or exploitation area or conditions (mountainous, midland or delta areas with difficult or complicated conditions). For a mineral which must be screened, sorted or enriched before sale, the volume of crude ore exploited in the period shall be determined based on the ratio decided by the provincial-level People’s Committee for converting finished mineral products into crude ore.

5. Environmental protection charge for another mineral additionally obtained in the exploitation process, if any, shall be paid at the charge rate applicable to the mineral exploited under the granted license.

6. Environmental protection charge for granite exploited for making tiling stones or fine-art products shall be paid at the charge rate specified at Point I, Section II of the frame charge tariff promulgated together with Decree No. 12/2016/ND-CP. For granite exploited for other purposes, the charge rate specified at Point 15, Section II of the frame charge tariff promulgated together with Decree No. 12/2016/ND-CP applies.

Granite exploiters shall declare and pay charges by themselves according to above regulations. Local tax agencies shall coordinate with local natural resources and environment agencies in examining charge declaration and payment according to regulations.

7. Large stone blocks exploited for making fine-art products are subject to the charge rate specified at Point 2, Section II of the frame charge tariff promulgated together with Decree No. 12/2016/ND-CP.

8. Environmental protection charge for mineral exploitation shall be exempted for cases of exploiting minerals for used as ordinary building materials within the residential land area under the use rights of a household or an individual to build a work of such household or individual therein; and exploiting earth and stone for leveling grounds or building security and defense works and for prevention, control and mitigation of natural disasters.

Article 3.Charge declaration and payment

1. A mineral exploiter shall submit an environmental protection charge declaration dossier to the tax agency at which it declares and pays royalties. In case no environmental protection charge for mineral exploitation arises in a month, a charge payer shall still fill in and submit a charge declaration form to the tax agency. In case a mineral purchaser registers to pay environmental protection charge on behalf of mineral exploiters, it shall submit a charge declaration dossier to its managing tax agency. The deadline for making a monthly charge declaration to a tax agency is the 20^thof the subsequent month. A charge payer shall fully and properly fill in a declaration form and take responsibility for the accuracy of the declaration.

2. Environmental protection charge for mineral exploitation shall be declared on a monthly basis and finalized on an annual basis. Finalization declaration includes annual finalization declaration and finalization declaration upon termination of mineral exploitation, mineral purchase, business activities or the enterprise ownership transformation contract or the re-organization of the enterprise.

3. A charge payer subject to charge assessment shall comply with the Law on Tax Administration and its guiding documents.

4. Environmental protection charge for crude oil, natural gas and coal gas shall be declared and paid at the provincial-level Tax Department of the locality where the charge payer is headquartered.

5. The currency used for payment of environmental protection charge for mineral exploitation is Vietnam dong.

6. In addition to the above regulations, the declaration, payment and finalization of environmental protection charge for mineral exploitation must comply with the Law on Tax Administration and its guiding documents.

Article 4.Cases eligible to the environmental protection charge rate for full extraction of minerals

1. The following cases are eligible to the environmental protection charge rate for full extraction as prescribed in Clause 3, Article 3 of Decree No. 12/2016/ND-CP:

a/ Extraction of minerals from dump sites of a mine for which a mine closure  decision has been issued;

b/ Production and business activities of organizations and individuals for purposes other than mineral exploitation according to their assigned functions and tasks or registered business lines (for example, obtaining sand in the process of dredging riverbeds and seaports or earth and stones in the process of building hydropower plants, transport works or shooting ranges);

The environmental protection charge rate for full extraction of minerals does not apply to cases other than those specified at Point a or b of this Clause.

2. The method of calculating environmental protection charge for full extraction of minerals must comply with Article 2 of this Circular.

Article 5.Management and use of environmental protection charge on mineral exploitation

1. Environmental protection charge on exploitation of minerals, excluding crude oil, natural gas and coal gas, constitutes a revenue which shall be wholly remitted to the local budget and used to support the following environmental protection activities in the areas where minerals are exploited in accordance with the Law on Environmental Protection and the Law on the State Budget:

a/ Preventing and mitigating negative environmental impacts;

b/ Remedying environmental degradation or pollution caused by mineral exploitation;

c/ Ensuring environmental sanitation, protecting and restoring landscape.

2. Environmental protection charge on crude oil, coal gas and natural gas exploitation constitutes a revenue which will be wholly remitted to the central budget and used to support environmental protection activities in accordance with the Law on Environmental Protection and the Law on the State Budget.

3. Places where minerals are exploited in this Article are areas where mineral exploitation activities take place and areas affected by these activities under commune- and district-level administrations.

Article 6.Publicization of paid environmental protection charges on mineral exploitation

No later than March 31 annually, environmental protection charge-collecting agencies shall make public the volume of exploited minerals, the volume of earth and stone excavated and discharged and the charge amount paid by each enterprise in the previous year in the mass media, including local newspapers, radio broadcasting and television, web portals of charge-collecting agencies and other suitable forms for people to know.

Article 7.Responsibilities of local agencies

1. Responsibilities of a provincial-level People’s Committee:

a/ To submit to its People’s Council the allocation of collected environmental protection charge amounts for environmental protection activities in the areas where minerals are exploited;

b/ To direct the provincial-level Natural Resources and Environment Department to work with the provincial-level Tax Department to submit to the provincial-level People’s Committee for promulgation a decision on the rate for conversion from finished products into crude mineral to serve the calculation of environmental protection charge to suit local realities;

c/  To direct the provincial-level Information and Communications Department to work with tax agencies to make public the collection and payment of environmental protection charge on mineral exploitation in the locality.

2. Responsibilities of a local tax agency

a/ To guide and urge mineral exploiters to register, declare and pay the charge according to regulations.

b/ To examine and inspect charge declaration and payment and finalization of collected charge amounts. For a charge payer that fails to comply or improperly complies with regulations on accounting documents, invoices and books, to assess the payable charge amount according to regulations;

c/ To handle administrative violations related to environmental protection charge for mineral exploitation according to its competence and in accordance with law.

d/ To keep and use data and documents provided by mineral exploiters and other entities according to regulations;

dd/ To coordinate with the local natural resources and environment agency in organizing and managing the collection of environmental protection charge for mineral exploitation under Decree No. 12/2016/ND-CP and the Law on Tax Administration.

Article 8.Organization of implementation

1. This Circular takes effect on June 13, 2016, and applies to the declaration and payment period starting from May 2016. This Circular replaces the Ministry of Finance’s Circular No. 158/2011/TT-BTC of November 16, 2011, guiding the Government’s Decree No. 74/2011/ND-CP of May 28, 2011, on environmental protection charge on mineral exploitation.

2. Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for study and guidance.-

For the Minister of Finance
Deputy Minister
VU THI MAI