DEDUCT VAT OF GOODS AND SERVICES USED FOR THE SEARCH, EXPLORATION AND DEVELOPMENT OF OILFIELD
The input VAT of goods and services used for the search, exploration and development of oilfield to the first date of extraction or the first date of production shall be totally deducted is the content prescribed at the Circular No. 36/2016/TT-BTC dated February 26, 2016 of the Ministry of Finance guiding the implementation of the regulations on tax to organizations and individuals conducting the search, exploration and extraction of oil and gas according to regulation of the Law on Petroleum.
Where the petroleum contract does not detect the commercial oil and gas and terminates its effect by the decision of the competent level, the input VAT of goods and services used for the search, exploration and development of oilfield shall not be collected retrospectively.
Besides, the Circular also gives the way to determine the natural resources tax payable. In particular, the natural resources tax to the crude oil and natural gas is determined on the partially progressive basis of output of crude oil and natural gas extracted average daily of the total output of crude oil and natural gas actually extracted in each taxation period from the petroleum contract area, tax rate of natural resources tax and a number of days of actual extracted in the tax period. Provisional export tax is determined by equaling to Output of crude oil and natural gas exported multiplied by the Price for calculation of export tax and Percentage of provisional export tax.
This Circular takes effect on April 12, 2016 and applies to the tax period from 2016 onwards and applies to the shipments of crude oil or natural gas sold from January 01, 2016.
