Vietnam feasibility study - EITI

42
activities. The support to fishers is only a voluntary act of the company.
Revenue allocation
As petroleum is a typical industry, almost all taxes,
fees, and charges are paid to the central budget
and PVN Group, including the environmental
protection fee and natural resources tax.
Petroleum exploiting entities are required to
pay directly taxes as VAT, personal income tax,
export-import tax, corporate income tax and
natural resources tax to the central budget,
which is allocated in accordance with provisions
on the allocation of state budget.
Some revenues such as petroleum interest are
fee for the use of data are distributed under the
mechanism that a part of which will be handed
over to PVN for management. The remaining
amount will be paid to the state budget.
The flow of cash distribution in petroleum
exploitation is illustrated in Figure 2 above.
In regard to the distribution of profits of PVN, after having excluded retained amounts, invested to the
limited liability company with one member (if any) of which, the Holding company is the owner, after
tax profit is distributed as follows:
• Deducting 10% to the financial reserve fund, where the balance of the fund is 25% of the charter
capital and the deduction will be terminated;
• Deducting 10% for setting up the Fund for petroleum seeking and exploration, where the balance
of the fund is at 10% of the charter capital and the deduction will be terminated;
• Deducting at least 35% to the development investment fund; and
• Deducting to the Fund for reward to the Holding Company’s Executive Committee and the
deducted level shall not exceed VND 1,000 million a year.
The remaining profit shall be allocated to the fund for reward and welfare under the current financial
regime. The balance, if any, shall be paid to the development investment fund.
III.2.3 auditing and promulgation of information
Auditing
Currently, in accordance with provisions of laws of Vietnam, the auditing mechanism consists of three forms:
• State audit: applicable to enterprises of which more than 51% of the owner’s capital is subject
to the Law on State Audit No. 37/2005. However, some enterprises of which less than 51% of
the capital is owned by the state may be audited by the state upon request of the Government
Inspectorate or decision of the Prime Minster.
• Independent audit: applicable to companies of which less than 51% of the capital is owned by the
state, foreign invested companies and private companies in line with the Decree No.105/2004/
ND-CP. Recently, the Law on Independent Audit is in the preparation and as planned, this Law
shall obtain the opinion of the National Assembly in 2011.
• Internal audit: applicable to state-owned enterprises in accordance with Decision No. 832/TC-
QD-CDKT dated 28/10/1997 of the Ministry of Finance.
The Extractive Industries Transparency Initiative and the Implementation Perspective of Vietnam
Holding companies, exploiting entities or Vietnamese
contractors shall be authorized to perform the
declaration, direct payment to the state budget upon
really arising following items:
a) 50% of the petroleum interest of the host country is
distributed from Vietsopetro Joint stock company;
b) 50% of the oil and gas interest of the host country
is distributed from Product distribution contracts
after having deducted 1.5% of which for the Holding
company to cover expenses of management,
supervision over petroleum contracts;
c) Entire receipts from petroleum commissions of all
types (signature commission, finding commission,
production commission);
d) 30% of the receipts from the fee for the reading
and use of petroleum materials
(Decree No. 142/2007/ND-CP)