Environmental protection tax is an indirect tax applied to goods that pose a risk of harming the environment such as gasoline, nylon bags, herbicides, etc. Understanding the regulations, tax rates and declaration methods helps businesses ensure compliance with the law, while avoiding additional collection or penalties. This article provides a comprehensive view of environmental protection tax from the legal basis, calculation to accounting.
What is environmental protection tax and its purpose?
Environmental protection tax is an indirect tax applied to certain goods that have negative impacts on the environment, aiming at the rational use of natural resources, limiting pollution and raising awareness of environmental protection.
Taxpayers are organizations and individuals that produce or import taxable goods, regardless of the purpose of use.
Legal basis for environmental protection tax
Legal documents regulating environmental protection tax include:
- Law on Environmental Protection Tax No. 57/2010/QH12
- Circular 152/2011/TT-BTC guiding implementation
- Circular 67/2023/TT-BTC amends and supplements
- Resolution No. 579/2018/UBTVQH14 stipulates the environmental protection tax rate framework for each type of goods.
List of goods subject to environmental protection tax
| Commodity group | Note |
|---|---|
| Gasoline, oil, grease of all kinds | Including RON95 gasoline, E5 gasoline, diesel oil, fuel oil... |
| Coal and coal products | Including anthracite coal, coal dust, fat coal... |
| Mixed solvents containing organic chemicals | Causing environmental pollution |
| Herbicides, termite killers (limited use) | List published by the Ministry of Natural Resources and Environment |
| Non-biodegradable nylon bags | Environmentally unfriendly packaging products |
| HCFC (hydrogen chlorofluorocarbon) | Refrigerants cause ozone depletion and greenhouse effect |
How to calculate environmental protection tax
Environmental protection tax is calculated according to the formula:
| Environmental Protection Tax = Quantity of goods × Absolute tax rate |
Unlike percentage taxes such as VAT or corporate income tax, environmental protection tax is a tax absolute, specified in units such as liters, kilograms or bags.
Illustrative example
Enterprise A imports 10,000 liters of RON95 gasoline in a month. According to current regulations, the environmental protection tax rate applied to RON95 gasoline is VND 4,000/liter.
The amount of environmental protection tax payable is calculated as follows: 10,000 liters × 4,000 VND = 40,000,000 VND
Thus, businesses need to declare and pay 40 million dong environmental protection tax for this imported shipment.
Current environmental protection tax rate table
To determine the correct amount of environmental protection tax to be paid, businesses need to look up the absolute tax rate for each type of goods. This tax rate is not calculated as a percentage but is specifically determined by units such as liters, kilograms or tons, depending on each item. Below is the table of current environmental protection tax rates according to regulations.
| Goods | Unit of measure | Environmental protection tax rate (VND) |
|---|---|---|
| Gasoline (except ethanol) | Liter | 4.000 |
| Diesel | Liter | 2.000 |
| Fuel oil, lubricant | Liter | 1.000 |
| Coal (anthracite, coal dust) | Ton | 15.000 |
| Non-biodegradable nylon bags | Kg | 50.000 |
| Termite killer, herbicide | Kg | 1,000 – 5,000 |
The tax rates in the above table are issued under Resolution No. 579/2018/UBTVQH14 and may change from time to time to comply with the State's environmental regulation policy. Enterprises need to regularly update new legal documents to ensure correct tax declaration and payment and avoid risks arising when settling taxes.
Sub-section and chapter code of environmental protection tax
When declaring and paying environmental protection tax, enterprises need to enter the correct chapter code (reflecting the tax management agency) and sub-item (classified by taxable goods). Accurate identification helps ensure the correct state budget accounting process, avoiding errors in accounting or tax refund.
| Goods | Subsection | Chapter code (example) |
|---|---|---|
| Gasoline, oil, grease | 1701 | 423 |
| Charcoal | 1702 | 423 |
| Nylon bag | 1703 | 423 |
| Herbicides, toxic chemicals | 1704 | 423 |
The chapter code may vary depending on the direct management agency of each enterprise (for example, central or local enterprise). Before paying taxes, it is necessary to check with the Etax system or contact the Tax Department to determine the correct code, to avoid paying incorrectly, leading to adjustments, affecting the declaration deadline.
Accounting for environmental protection tax in enterprises
Environmental protection tax is a production cost or management cost, depending on the purpose of using taxable goods. Correct accounting helps businesses to have transparency in their accounting books, while ensuring that they are eligible to be included in reasonable expenses when settling corporate income tax.
| Business | Debit Account | Credit Account |
|---|---|---|
| Record environmental protection tax payable | 621, 627, 641 or 642 | 33382 – Environmental Protection Tax |
| When paying taxes | 33382 – Environmental Protection Tax | 111 or 112 |
This tax is considered a valid expense if the enterprise has full invoices, tax payment documents and declares the correct tax code according to the provisions of Circular 200/2014/TT-BTC. In addition, transparent record keeping is also an important factor to ensure compliance during tax inspections.
Some common mistakes and how to fix them
In the process of declaring and paying environmental protection tax, many businesses encounter technical and professional errors, leading to additional collection or invalid expense calculation. One of the common errors is declaring the wrong budget sub-item code, which directly affects the tax payment and refund process later.
In addition, the environmental protection tax rate may change from time to time due to the competent authority issuing a resolution to adjust it. If a business applies the current tax rate incorrectly, there will be a difference and the tax authority will issue an audit.
Another common mistake is not being able to distinguish between taxable and non-taxable goods in the same group. A typical example is ethanol – although it is also gasoline, it is not subject to environmental protection tax, and is easily confused with regular RON gasoline.
To overcome these errors, businesses need to proactively update the latest resolutions and circulars related to environmental protection tax. At the same time, they should periodically review the list of goods, check the codes, properties and tax rates of each type to ensure accurate declaration. Using accounting - tax software with integrated tax rate warning feature is also an effective solution to help limit errors and save data processing time.
Conclusion and recommendations
Environmental protection tax is not only a financial obligation but also a tool to regulate consumer behavior, contributing to ecosystem protection and sustainable development. With high tax rates applied to many essential goods such as gasoline, nylon bags, toxic chemicals, etc., identifying the correct taxable objects and making accurate declarations is a mandatory requirement for businesses.
To avoid errors in the tax payment process, businesses need to regularly update new legal documents, carefully check the list of taxable goods and pay taxes on time according to the budget sub-item code. Keeping complete documents and invoices is also an important factor to prove the reasonableness when settling expenses.
In case the enterprise has a complex list of goods or does not fully understand the regulations, cooperation with experienced accounting and tax units will help ensure compliance with the law, limit legal risks and optimize legal costs during tax inspection. This is a necessary step to maintain transparency and sustainability in long-term production and business activities.
