Decree No. 203/2013/ND-CP dated November 28, 2013 of the Government on defining the method of calculation and grant charge of mineral exploitation right

Decree No.  203/2013/ND-CP dated November 28, 2013 of the Government on defining the method of calculation and grant charge of mineral exploitation right

Pursuant to the December 25, 2001 Law on Organization of Government;

Pursuant to the November 17, 2010 Law on Minerals;

At the proposal of Minister of Natural Resources and Environment,

The Government promulgates Decree defining the method of calculation and grant charge of mineral  exploitation right

Chapter 1.

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree details Clause 3 Article 7 of the November 17, 2010 Law on Minerals of the XII National Assembly on:

1. The calculation method and  grant charge of the mineral exploitation right.

2. Method of collection, regime of management and use of grant charge of mineral exploitation right.

Article 2. Subjects of application

1. State agencies that perform the work of calculation, collection, management and use of grant charge of the mineral exploitation right.

2. Organizations and individuals that are granted the exploitation license without auction of mineral exploitation right.

Article 3. Interpretation of terms

In this Decree, the following terms are construed as follows:

1. The geological reserves means a part or whole mineral reserves in the explored zone already been approved by competent State agencies.

2. Reserves to calculate grant charge of the mineral exploitation right (Q) means geological reserves located in boundaries of the zone licensed for exploitation.

3. The mining reserves means the geological reserves located in boundaries of the zone licensed for exploitation; in which a part of reserves that applies measure of open-pit exploitation or pit mine has been discarded aiming to ensure for feasibility during exploitation.

4. Coefficient of mineral recovery involving measure of exploitation (K1) is the rate between the geological reserves already been discarded partly due to design of mining method and the geological reserves in boundaries of the zone licensed for exploitation.

5. The grant charge of the mineral exploitation right (R) is defined by the percentage (%) of value of original ore of the mineral zone licensed for exploitation. This value is defined on the basis of elements such as geological reserves, price to calculate royalty and coefficient of mineral recovery involving the method of exploitation, economic-social conditions.

Chapter 2.

CHARGE, CALCULATION METHOD, METHOD OF COLLECTION, PAYMENT, REGIME OF MANAGEMENT AND USE OF GRANT CHARGE OF THE MINERAL EXPLOITATION RIGHT

Article 4. Grant charge of the mineral exploitation right (R)

The grant charge of the mineral exploitation right (R) is defined according to group, kind of minerals valued at between 1% and 5%, presented at Annex I enclosed with this Decree.

Article 5. Formula to calculate grant charge of the mineral exploitation right

Grant charge of the mineral exploitation right is calculated under the following formula:

T = Q x G x K₁ x K₂ x R

In which:

T- Grant charge of the mineral exploitation right; calculation unit is VND;

Q- Reserves to calculate grant charge of the mineral exploitation right specified in Article 6 of this Decree; calculation unit is m³, ton;

G- Price to calculate grant charge of the mineral exploitation right specified in Article 7 of this Decree; calculation unit is VND/ reserves unit;

K₁- coefficient of mineral recovery involving the mining method, specified: Open-pit mining K1 = 0.9; pit-mine mining K1 = 0.6; mining of mineral water, natural hot water and the remaining cases K1 = 1.0;

K₂ – coefficient involving special disadvantaged and disadvantaged economic-social conditions applied to list of investment preferential geographical areas as prescribed by Government: Zones of mineral mining in the areas with special disadvantaged economic-social conditions, K₂ = 0.90; zones of mineral mining in the areas with disadvantaged economic-social conditions, K₂ = 0.95; zones of mineral exploitation in the remaining areas, K₂ = 1.00;

R- Rate of grant charge of the mineral exploitation right; calculation unit is percentage (%)

Article 6. Reserves to calculate grant charge of the mineral exploitation right

Reserves to calculate grant charge of the mineral exploitation right are defined according to the following cases:

1. For license of mineral mining granted before the effective date of the 2010 Law on mineral, the reserves to calculate grant charge of the mineral exploitation right are the remaining reserves calculated from July 01, 2011. It is specified as follows:

a) If the reserves indicated in the mining license are geological reserves: The reserves indicated in the mining license minus (-) the mining reserves converted into the geological reserves. The mined reserve is converted into the geological reserves upon dividing it by (:) coefficient of mineral recovery involving the mining method;

b) If the mining license does not indicate the geological reserve, only indicates the mining reserve: The reserve indicated in the mining license minus (-) the mined reserve and divided by (:) coefficient of mineral recovery involving the mining method;

c) If the mining license indicates resources permitted mining, annual mining capacity and time limit for mining, or only indicates the annual mining capacity and time limit for mining: The annual mining capacity multiplied (x) by the remaining duration of license and divided (:) by coefficient of mineral recovery involving the mining method;

d) If the mining license indicates the volume of goods products (example quantity of bricks, tiles or other cases) and duration of performance: The consumption level of materials / product unit in the investment project multiplied (x) by the volume of goods produced in year, multiplied (x) by the remaining time limit for mining of license and divided (:) by coefficient of mineral recovery involving the mining method;

dd) In case of the license for mining mineral including mineral water and natural hot water: The water flow m3 /day-night under the license multiplied (x) by the remaining time limit for mining of license;

e) Basis to calculate the mined reserves for cases specified at Point a, b this Clause are statistics according to report on royalty payment and relevant annual lawful documents of organizations and individuals.

2. For the mineral mining licenses granted after the effective date of the 2010 Law on mineral and before the effective date of this Decree: The reserve to calculate grant charge of the mineral exploitation right is defined similar to point a, point b and point dd Clause 1 of this Article; in which, the mined reserve is zero (0).

3. For the licenses in which the competent state agencies have allowed mining, not required for exploration, prescribed in Article 65 of Law on Mineral, the reserve to calculate grant charge of the mineral exploitation right is applied provision at Point c Clause 1 of this Article.

4. Case of application for expansion of license for mineral mining, organizations and individuals must additionally pay grant charge of the mineral exploitation right for the reserve part more than the reserve already pay grant charge of the mineral exploitation right.

5. If provisions at Clauses 1, 2, 3, 4 of this Article are not able to be applied, assessment of the remaining reserve shall be conducted. Expenses related to the reserve assessment shall be paid by organizations and individuals licensed for mineral mining.

6. For the license of mineral mining granted after the effective date of this Decree, in such licenses must indicate the geological reserve that is the reserve to calculate grant charge of the mineral exploitation right.

Article 7. Price to calculate grant charge of the mineral exploitation right

Prices to calculate grant charge of the mineral exploitation right is defined under the prices to calculate the royalty that are formulated and announced by the People’s Committees of provinces and Central-affiliated cities (collectively referred to as the provincial People’s Committees); still remain effective at time of calculating grant charge of the mineral exploitation right. Specified as follows:

1. Each kind of mineral in a mineral mining area shall apply a charge level for granting the mineral exploitation right.

2. If in the same mineral mining area, there are many kinds of post-mining products and each kind has a various charge level, the average price of charge level shall be applied.

3. For minerals have not yet had prices for the royalty calculation or must adjust the prices for the royalty calculation because that are inconsistent to regulations, the provincial Departments of Natural Resources and Environment shall assume the prime responsibility for, and coordinate with relevant agencies in formulating prices; the provincial Department of Finance shall appraise and submit to the provincial People’s Committees for approval.

Article 8. The process and dossier of calculating grant charge of the mineral exploitation right

1. For the mineral mining licenses granted after the effective date of this Decree:

a) Organizations and individuals licensed for mineral mining shall submit dossier of calculating grant charge of the mineral exploitation right, to the General Department of Geology and Mineral of Vietnam and the provincial Departments of Natural Resources and Environment, under their competence involving license of mining, within 60 (sixty) days, since this Decree takes effect;

b) Dossier of calculating grant charge of the mineral exploitation right includes:

- Declaration on information for calculation of grant charge of the mineral exploitation right according to the Form No.01 at Annex II enclosed this Decree: 02 (two) copies.

- Copy of license for mineral mining: 01 (one) copy.

- Report on annual royalty tax payment; lawful documents proving the mineral reserve already been mined until the end of June 30, 2011.

2. For the licenses of mineral mining granted without auction of the mineral exploitation right and after the effective date of this Decree, the grant charge of the mineral exploitation right must be paid before licensing in accordance with regulations.

Article 9. The receipt, calculation of and approval for grant charge of the mineral exploitation right

1. The General Department of Geology and Minerals of Vietnam, the provincial Departments of Natural Resources and Environment are agencies receiving, checking and certifying the legality, level of sufficiency of dossiers of calculating grant charge of the mineral exploitation right submitted by organizations and individuals; conducting calculation and submitting to the Minister of Natural Resources and Environment, chairpersons of the provincial People’s Committees for approving grant charge of the mineral exploitation right, under their competence involving licensing for mineral mining, according to Form No. 02 and Form No. 03 at Annex II enclosed with this Decree.

2. If the mineral zone permitted mining located in inter-province or inter-district geographical areas; grant charge of the mineral exploitation right shall be divided under the area rate of mineral zone. This zone is based on license for mineral mining according to geographical areas of each province, each district.

3. The General Department of Geology and Minerals of Vietnam, the provincial Departments of Natural Resources and Environment shall send a written approval for grant charge of the mineral exploitation right submitted to the local taxation departments, where have mineral zone licensed mining, and notify organizations and individuals who are licensed for mining minerals.

Article 10. Notice of paying grant charge of the mineral exploitation right

When receiving the written approval for grant charge of the mineral exploitation right, within 10 (ten) working days, local taxation department where has mineral zone licensed for mining shall issue a notice on payment for grant charge of the mineral exploitation right according to Form No.04 at Annex II enclosed this Decree, send it to organization or individual licensed for mining minerals.

Article 11. Methods to collect grant charge of the mineral exploitation right

1. Paying once equal to 100% of total grant charge of the mineral exploitation right for the following cases:

a) The remaining duration of mining in the mining license or grant of a new license is equal to or less than 05 (five) years;

b) Total grant charge of the mineral exploitation righties equal to or less than 01 (one) billion VND.

2. Paying for many times for cases other than Clause 1 of this Article and specified as follows:

a) The amount of each payment is calculated as follows:

- For the mineral mining licenses granted before the effective date of this Decree: The first time, charge is collected upon having notice of competent state agencies; the following payments, charges shall be collected annually continuously (before March 31) and collection of charge must be finished at least 5 years before the license is expired. Specified according to the following formula:

T_hn = T: (X - 4)

T_hn- The annual payable grant charge of the mineral exploitation right; VND;

T- The payable total grant charge of the mineral exploitation right; VND;

X – Number of the remaining years of mining; year;

- For the mineral mining licenses granted after the effective date of this Decree: The first time, charge is collected before granting the mining license; the following payments, charges shall be collected annually continuously (before March 31) and collection of charge must be finished in top half of licensed duration. Specified according to the following formula:

T_hn = 2T: X

T_hn- The annual payable grant charge of the mineral exploitation right; VND;

T- The payable total grant charge of the mineral exploitation right; VND;

X – Number of the years of mining; year;

b) Charge paid from the second time must be multiplied by the difference ratio of price to calculate grant charge of the mineral exploitation right. Specified as follows:

T_n = T_hn x G_n : G

T_n- Charge paid for n time; VND;

T_hn- Charge paid annually; VND;

G_n- Price to calculate grant charge of the mineral exploitation right at time of payment for the n time; VND/ reserves unit;

G- Price to calculate grant charge of the mineral exploitation right for the first time; VND/ reserves unit;

c) During mining, organizations and individuals may suggest to change by reducing number of payment times and increasing the payable amount for the remaining payment times.

3. Time limit for paying grant charge of the mineral exploitation right at the first date is 90 (ninety) days from the day of receiving notice of local taxation Department; deadline for the following times is not later than March 31. After these time points, in addition to the payable charge in notice, organizations and individuals must also pay fines as prescribed by law on tax administration.

4. If the licensed mineral reserve is too much, the remaining time of mining and the annual average mining capacity is not able to use up the reserve part not yet been mined; organizations and individuals may request for adjusting the mining license involving capacity or reserve. The grant charge of the mineral exploitation right shall comply with the existing license for mining and adjusted appropriately when the replacing license for mining takes effect under law.

Article 12. Methods of remittance of grant charge of the mineral exploitation right

1. 70% of charges for granting the mineral mining shall be remitted to central budget, 30% of charges shall be remitted to local budget, for licenses granted by the central level; 100% of charges shall be remitted to local budget, for licenses granted by the provincial People’s Committees.

2. Organizations and individuals granted the mineral exploitation right shall pay charges under notices of the local taxation Departments. The collection and remittance of grant charge of the mineral exploitation right shall comply with regulations on collection and management of state budget revenues.

3. After receiving certification of remitting charges to the State budget, organizations and individuals licensed for mineral mining shall send 01 copy to the General Department of Geology and Mineral of Vietnam, for licenses under the licensing competence of the Ministry of Natural Resources and Environment or the provincial Departments of Natural Resources and Environment, for licenses under the licensing competence of the provincial People's Committee for monitoring and supervision.

Article 13. Ensuring expenditures for the work of geological basic survey on minerals, protection of minerals not yet been mined

Annually, agencies of Natural Resources and Environment shall make expenditure estimates for task of geological basic survey on minerals, protection of minerals not yet been mined at the same time of making state budget estimates, send them to financial agencies, agencies of planning and investment. Based on the balancing ability of budget and revenue estimates from grant charge of the mineral exploitation righting the planned year that they are retained under decentralization; financial agencies shall consider, sum up plan on allocating budget expenditure to submit to competent authorities for consideration and decision.

Article 14. Funding to determine grant charges of the mineral exploitation right

1. Funding for organization to determine grant charge of the mineral exploitation right shall be covered by state and allocated in scope of budget expenditure estimate assigned to agencies of Natural Resources and Environment under current decentralization specified in the Law on State budget.

2. Expenditures to determine grant charge of the mineral exploitation right include:

a) Expenditures for survey, collection and processing of data, information for calculating charges for granting the mineral exploitation right, including: Salaries, wages under the current regulations for direct workers (excluding expenditure for salaries of cadres, public servants who have enjoyed salaries under the current regulations) working-trip allowances, accommodation, transportation, and allowances for overtime work;

b) Expenditures for conferences, workshops, technical meetings to determine charges for granting the mineral exploitation right;

c) Expenditure for procurement of equipment, devices related to determination of grant charge of the mineral exploitation right(if any), stationery, office supplies;

d) Expenditures for checking and appraising results of determining charges for granting the mineral exploitation right;

dd) Other expenditures directly related to organization to determine value of charges for granting the mineral exploitation right.

3. The Ministry of Natural Resources and Environment and the provincial People’s Committees shall manage, use and finalize funding for organization to determine grant charge of the mineral exploitation righting accordance with the current regime and regulations.

Chapter 3.

IMPLEMENTATION RESPONSIBILIIES

Article 15. Responsibilities of agencies in calculating and collecting grant charge of the mineral exploitation right

1. The General Department of Geology and Minerals of Vietnam shall:

a) Preside over calculation and appraisal of the payable charges for granting the mineral exploitation right, submit them to competent authorities for approval; send the written approval for grant charge of the mineral exploitation right under the licensing competence of the Ministry of Natural Resources and Environment and the payable charges before December 31 every year to the local taxation Departments where have mineral zones licensed for mining;

b) Inspect and supervise during construction of technical measure system and items of works stated in the exploring license for mineral zones under the licensing competence of the Ministry of Natural Resources and Environment in order to ensure the reliability in determining reserves and calculating charges for granting the mineral exploitation right;

c) Conduct examinations, inspections on calculating grant charge of the mineral exploitation right at localities;

d) Annually report to the Minister of Natural Resources and Environment about the work of collecting grant charge of the mineral exploitation right nationwide; sum up and report them to the Prime Minister.

2. The provincial Departments of Natural Resources and Environment shall:

a) Preside over calculation and appraisal of the payable charges for granting the mineral exploitation right, submit them to competent authorities for approval; send the written approval for grant charge of the mineral exploitation right under the licensing competence of the provincial People’s Committees and the payable charges before December 31 every year to the local taxation Departments where have mineral zones licensed for mining;

b) Preside over formulation and adjustment of prices to calculate royalty tax and submit them to competent authorities for approval and send them to the General Department of Geology and Minerals of Vietnam before October 30 every year;

c) Inspect and supervise during construction of technical measure system and items of works stated in the exploring license for mineral zones under their licensing competence in order to ensure the reliability in determining reserves and calculating charges for granting the mineral exploitation right;

d) Annually sum up data on collecting grant charge of the mineral exploitation right at their localities and submit it to the provincial People’s Committees, concurrently report to the Ministry of Natural Resources and Environment for summing up and reporting it to the Prime Minister.

3. The local taxation Departments where have mineral zones licensed for mining shall:

a) Issue notices and send them to organizations and individuals: Payment of charges for granting the mineral exploitation right; amounts for delayed payment, fines as prescribed by law on tax administration because deadlines stated in notices are expired (if any);

b) Supply information related to payment of grant charge of the mineral exploitation right, to the General Department of Geology and Mineral of Vietnam or the provincial Departments of Natural Resources and Environment, under the licensing competence for monitoring;

c) Sum up, make accounting and report on the collected grant charge of the mineral exploitation righting accordance with current regulations.

Article 16. Responsibilities of organizations and individuals involving payment of grant charge of the mineral exploitation right

1. Pay grant charge of the mineral exploitation right within time limit stated in notice of taxation agencies.

2. If they need reduce number of times of payment and increase the payable amounts of each time, they must have a written request according to form No. 05 at Annex II enclosed this Decree and send it to the agency licensing for mining.

3. Cases of paying grant charge of the mineral exploitation right into state budget later the set deadline, in addition to the payable charges in notice, they must also pay fines as prescribed by law on tax administration.

4. In case of transferring the right of mining minerals, organizations and individuals must fulfill obligation of payment for grant charge of the mineral exploitation right until time of transfer.

Chapter 4.

IMPLEMENTATION PRVISIONS

Article 17. Effect

This Decree takes effect on January 20, 2014.

To annul Article 42 of the Government’s Decree No. 15/2012/ND-CP dated March 09, 2012, detailing implementation of a number of Articles of Law on minerals.

Article 18. Organization of implementation

Ministers, Heads of ministerial-level organs, Heads of governmental organs, Chairmen of provincial People's Committee and other relevant organizations and individuals are liable to execute this Decree.

On behalf of the Government

Prime Minister

Nguyen Tan Dung

ANNEX I

CHARGE LEVEL FOR GRANTING THE MINERAL EXPLOITATION RIGHT (R)
(Promulgated together with the Government’s Decree No. 203/2013/ND-CP dated November 28, 2013)

No.	Mineral group or category	R (%)
I	Mineral group of ordinary building materials and peat
1	Ordinary building materials used in leveling (rock, sand, soil)	5
2	Peat and remaining ordinary building materials	4
II	Mineral group of building materials
1	White sand, fire resistant clay	3
2	Original ashlars	1
3	The remaining minerals of building materials	2
III	Metal mineral group
1	Coastal placer titan	3
2	Remaining metal minerals	2
IV	Material mineral group
1	Limestone, serpentine	3
2	The remaining material minerals	2
V	Mineral group of gems and semi-precious stones	2
VI	Mineral group of hot water, mineral water and CO2 gas	2