The selective catalytic reduction (SCR) system for NOX removal in coal-fired power plants has a promoting effect on the oxidation and removal of elemental mercury. In this study, basic mechanism of mercury oxidation by V2O5-based SCR catalyst is investigated via density functional theory method and the periodic slab models. Calculations are conducted to determine the adsorption energies and geometries of Hg-0, HgCl, HgCl2 and HCl on V2O5(001) surface, and to reveal the energy profile of oxidation reaction and the structures of relative transition states and intermediates. The results indicate that HCl can significantly promote Hg-0 oxidation on V2O5(001) surface, by forming an intermediate HgCl-surface which is important for Hg-0 oxidation. The Hg-0 oxidation goes through Hg-0 -> HgCl -> HgCl2, and the two stages of the reaction follow Eley-Rideal mechanism and Langmuir-Hinshelwood mechanism, respectively. The formation of HgCl2 is the rate-determining step due to its high energy barrier. Three detailed reaction pathways are obtained, and the related energy profiles and structures are analyzed in detail. The Hg-0 oxidation reaction can take place through all three pathways even if differences exist in each other, while pathways I and II have relatively low energy barriers.