Taxable objects and Objects not liable to Environmental Protection Tax in Vietnam

According to Article 1 and article 2 of Circular 152/2011 / TT-BTC:

Objects subjects to environmental protection tax include goods of the following groups:

1.Petrol, oil and grease, including:

1.1. Petrol, except ethanol;

1.2. Jet fuel;

1.3. Diesel fuel;

1.4. Kerosene;

1.5. Fuel oil;

1.6. Lubricants;

1.7. Grease.

Petrol, oil and grease specified in this Clause include all kinds of petrol, oil and grease (below collectively referred to as petrol and oil) of fossil origin which are sold in Vietnam, excluding bio-preparations (such as ethanol, vegetable oil, animal fat, etc.).

For mixed fuel containing bio-fuel and petrol and oil of fossil origin, environmental protection tax shall be calculated and collected only for the volume of petrol and oil of fossil origin.

2.Coals, including:

2.1. Lignite (brown coal);

2.2. Anthracite coal;

2.3. Fat coal;

2.4. Other coals.

3.Hydrochlorofluorocarbon (HCFC) solution, meaning a group of the ozone layer-depleting substances used as refrigerant in cooling equipment and semi-conductor industry, which are domestically produced, imported separately or in imported refrigeration electric equipment.

4. Taxable nylon bags (plastic bags) re thin plastic bags and packages, that open at the top and may store products therein, made of HPDE (high density polyethylene resin), LDPE (low density polyethylene) or LLDPE (linear low density polyethylene resin), except for packages of pre-packed goods that satisfy the eco-friendly standards as from being issue with the  Certificate of Eco-friendly nylon bag as prescribed by the Ministry of Natural Resources and Environment.

The packages of pre-packed goods (whether or not in the form of a bag) provided in this Clause are specified as follows:

a) The packages of pre-packed goods include:

a1) The packages of pre-packed imported goods.

a2) Packages produced or imported by organizations, households, or individuals to pack the products that they produce, process, or buy, or to provide packaging services.

Example 1: enterprise A produces or imports 100 kg of packages (nylon bags) to pack shoes (produced, processed, or purchased by enterprise A) or to provide packaging services, the this 100 kg of packages are exempted from environment protection tax.

The packages that the producer or importer has committed or declared to use for packaging during the import stage, but are not used for packaging but used for internal use, exchange, or for donation, then the producer or importer must declare and pay environment protection tax, and shall be disciplined as prescribed by law provisions on tax administration.

Example 2: enterprise A produces or imports 100 kg of packages (nylon bags), and enterprise A has committed or declared, at the import stage, that the packages are used for packing shoes at  (produced, processed, or purchased to provide packaging services). If enterprise A uses 20 kg of them to pack the shoes, and 30 kg for exchanging, 40 kg for internal use, and 10 kg for donation, enterprise A must declare and pay environment protection tax on the 80 kg of packages used for internal use, exchange, and donation, and shall be disciplined as prescribed by law provisions on tax administration.

a3) Packages directly purchased by organizations, households, or individuals from the producer or the importer to pack the products that they produce, process, or buy, or provide packaging services.

Example 3: enterprise B purchases 200 kg of packages from enterprise A (a package producer or importer) to pack shirts (produced, processed, purchased, or packed by enterprise B), such 200 kg of packages are exempted from environment protection tax.

The packages that the users do not use to pack products (the user has committed that the packages are purchased for packing products), but use for internal use, exchange, donation, or selling to another organization, household, or individual, the buyer must declare and pay environment protection tax to the tax authority in charge, and shall be disciplined as prescribed by law provisions on tax administration.

Example 2: enterprise B purchases 200 kg of packages from enterprise A (a package producer or importer) for packing shoes (enterprise B has committed that the packages are purchased for packing products). The shoes are produced, processed, purchased, or packed by enterprise B. If enterprise B uses 50 kg of them to pack the shoes, and 20 kg for exchanging, 30 kg for internal use, 40 kg for donation, and 60 kg for selling to enterprise C, then enterprise B must declare and pay environment protection tax on the 80 kg of packages used for internal use, exchange, and donation, and sale, and shall be disciplined as prescribed by law provisions on tax administration.

a4) The packages of pre-packed prescribed in Point a2 and a3 this Point do not include shopping bags when selling.

Example 5: Supermarket A or store B purchases 100 kg of nylon bags from enterprise C (a producer or importer), including 50 kg of nylon bags for storing goods that supermarket A or store B sells to their customers, and 50 kg of nylon bags for packing products (the products are produced, processed, or purchased for packing by supermarket A or store B), then the 50 kg of nylon bags for storing goods in this case are not packages of pre-packed goods.

Objects not liable to tax

1.Goods not specified in Article 3 of the Law on Environmental Protection Tax and guided in Article 2 of Decree No. 67/2011/ND-CP and Article 1 of this Circular are not liable to environmental protection tax.

2.Goods specified in Article 3 of the Law on Environmental Protection Tax and guided in Article 2 of Decree No. 67/2011/ND-CP and Article 1 of this Circular arc not liable to tax in the following cases:

2.1. Goods transported from exporting countries to importing countries via Vietnamese border gates (transited or transported via border gates, including goods already brought into bonded warehouses) for which procedures for import into or export out of Vietnam are not carried out.

2.2. Goods transited via border gates or the border of Vietnam under agreements concluded between the Vietnamese Government and a foreign government or between agencies or representatives authorized by the Vietnamese Government and a foreign government under law.

2.3. Goods temporarily imported for re-export within the time limit specified by law.

2.4. The goods directly exported to abroad by the producer (including exported goods made of imported materials) or exported by an authorized trader, the customs shall not collect environment protection tax on the exported goods and imported materials.

If the goods subject to environment protection tax is purchased by a organization, household, or individual for exporting, the producer must make declaration and pay environment protection tax when selling goods.

Example 6: If enterprise A imports 40 kg of nylon bags to printing labels or more processing to make finished prescribed different from the initial ones, the exports them, then enterprise A may not make declaration and pay environment protection tax on that 40 kg of nylon bags when importing.

Example 7: If enterprise B imports 100 kg of termiticide, which is subject to restricted use, to are materials for processing goods for export, then enterprise B may not make declaration and pay environment protection tax on that 100 kg of termiticide, which is subject to restriction use, when importing.”

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