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| Liquefied petroleum gas (LPG) storage tanks at the terminal of PV GAS, a subsidiary of Petrovietnam, in Vung Tau city__Photo: VNA |
From December 5, investors in overseas oil and gas projects are responsible for fulfilling all their financial obligations related to oil and gas activities toward the Vietnamese State in accordance with the tax laws, relevant laws and the Agreements for the avoidance of double taxation and the prevention of fiscal invasion with respect to taxes on income between Vietnam and foreign countries and territories.
Such is a salient point of Decree 132/2024/ND-CP dated October 15, providing offshore investment in oil and gas activities.
Accordingly, for overseas oil and gas contracts and projects in which (divided) earnings of investors are not separated into recovered capital amounts and income amounts, investors will have to additionally register with the Ministry of Finance the mechanism for identification of investors’ earnings for the state management task and fulfillment of their obligations in Vietnam (if any).
The import duty and export duty exemption for capital amounts in the form of goods, machinery and equipment transferred abroad for implementation of offshore investment activities and transferred from abroad into Vietnam must comply with the law on import duty and export duty.
The new Decree permits investors to transfer part or the whole of their overseas oil and gas projects in compliance with oil and gas contracts, relevant agreements and licenses as well as laws of host countries and related countries and this Decree. Authorities competent to decide on investment in overseas oil and gas projects may decide on transfer of such projects.
In case an overseas oil and gas project is wholly transferred to a domestic investor, the current investor will carry out procedures for modification of its/his/her offshore investment registration certificate under Article 63 of the Law. If wishing to transfer the whole of an overseas oil and gas project to a foreign investor, the current investor will carry out procedures for invalidation of its/his/her offshore investment registration certificate under Article 64 of the Law.
If the transfer of overseas oil and gas projects generates profits, investors will have to perform their financial obligation in Vietnam in accordance with the tax laws, relevant laws and the Agreements for the avoidance of double taxation and the prevention of fiscal invasion with respect to taxes on income between Vietnam and foreign countries/territories.-
Huy Hoàng
