What are the cases of VAT refund in Vietnam?

What is Value Added Tax in Vietnam?

According to the provisions of Article 2 of the Value Added Tax Law 2008, the value-added tax is a tax imposed on the added value of goods or services arising in the process from production, circulation to consumption.

What are the cases of VAT refund in Vietnam? (Image from the Internet)

What are the cases of VAT refund in Vietnam?

Under Article 13 of the Law on VAT 2008 amended by Clause 7, Article 1 of the Law on Amending Law on VAT 2013 as amended by Clause 3, Article 1 of the Law on Amendments to Law on Value Added Tax, Law on Special Consumption Tax and Law on Tax Administration 2016, the cases eligible for VAT refund are as follows:

- Business establishments that pay VAT by the deduction method, if having input VAT that has not yet been fully deducted in the month or quarter, shall be entitled to a deduction in the next period.

In cases where business establishments that have registered to pay VAT by the deduction method have new investment projects, and in the investment stage have incurred input VAT amounting to three hundred million dong or more, they shall be entitled to VAT refund.

Business establishments are not entitled to a VAT refund but shall carry forward the undeducted input VAT of the investment project according to the law on investment to the next period in the following cases:

+ Investment projects of business establishments that have not contributed the registered charter capital; engage in businesses subject to investment conditions without fulfilling business conditions according to the 2020 Law on Investment or fail to maintain sufficient business conditions during the operation;

+ Investment projects for the exploitation of natural resources or minerals licensed from July 1, 2016, or investment projects for the production of goods having a total value of natural resources and minerals plus energy costs accounting for 51% or more of the product cost according to the investment project.

- Business establishments in the month or quarter have export goods and services if the input VAT amount not yet deducted reaches three hundred million dong or more, shall be entitled to VAT refund on a monthly or quarterly basis, except for imported goods for export, exported goods not executed at the customs-controlled area as prescribed by the 2014 Law on Customs.

VAT refund is executed before inspection after tax for entities producing export goods without tax or customs law violations in the last two consecutive years; taxpayers not classified under high-risk category as prescribed by the 2019 Law on Tax Administration.

- Business establishments paying VAT by the deduction method shall be entitled to VAT refund when there is an ownership change, enterprise transformation, merger, consolidation, division, separation, dissolution, bankruptcy, or termination of operations having excess VAT paid or undeducted input VAT.

- Foreigners and overseas Vietnamese holding passports or entry documents issued by competent foreign authorities shall be entitled to a VAT refund on goods purchased in Vietnam brought along upon exit.

- VAT refund for programs and projects using non-refundable official development assistance (ODA) or non-refundable aid, humanitarian aid is regulated as follows:

+ Program or project owners or main contractors, organizations designated by foreign donors to manage programs or projects using non-refundable ODA, shall be refunded the VAT paid for goods and services purchased in Vietnam to serve the programs or projects;

+ Organizations in Vietnam using non-refundable aid funds, humanitarian aid funds from foreign organizations or individuals to purchase goods and services serving the non-refundable aid programs or humanitarian aid in Vietnam shall be refunded the VAT paid for such goods and services.

- Diplomatic immunities and privileges entitlement subjects under the law on diplomatic immunities and privileges purchasing goods and services in Vietnam for use shall be refunded the VAT paid as recorded on VAT invoices or payment documents with prices inclusive of VAT.

- Business establishments having VAT refund decisions from competent authorities as per the law and cases of VAT refund according to international treaties of which the Socialist Republic of Vietnam is a member.

What documents are required for VAT refund in Vietnam?

According to Article 28 of Circular 80/2021/TT-BTC, revised by Article 2 of Circular 13/2023/TT-BTC, the documents required for VAT refund include:

Documents required for VAT refund under Law on VAT (excluding VAT refunds per international agreements; uncredited input VAT refunds upon ownership transfer, business conversion, merger, consolidation, division, separation, dissolution, bankruptcy, cessation of operations as stipulated in Articles 30, 31 of Circular 80/2021/TT-BTC) include:

1. Request for reimbursement of state budget revenues using form No. 01/HT issued with appendix 1 of Circular 80/2021/TT-BTC.

2. Relevant documents depending on the case for a refund. Specifically:

* In case of VAT refund for investment project:

- Copy of Investment Registration Certificate or Investment Certificate or Investment License for cases requiring investment registration procedures;

- For projects with construction works: Copy of Land Use Right Certificate or Land Allocation Decision or Lease Contract by competent authority; Construction Permit;

- Copy of proof of contributed charter capital;

- For investment projects in conditional business sectors during the investment phase, according to investment law and sector-specific law, accredited business conditions certificates by competent authorities under Clause 3, Article 1 of Decree 49/2022/ND-CP: Copy of one of the following: License, certificate, or confirmation letter accepting business conditions.

- Invoice and proof of purchased goods and services list using form No. 01-1/HT issued with appendix 1 of Circular 13/2023/TT-BTC, except where electronic invoices have been sent to the tax authority;

- Project Management Board establishment decision, Project Management handover decision by the investment project owner, Organizational and Operational Regulations of the branch or Project Management Board (if the branch or Project Management Board applies for a refund).

* In case of VAT refund for exported goods and services:

- Invoice and proof of purchased goods and services list using form No. 01-1/HT issued with appendix 1 of Circular 80/2021/TT-BTC, except where electronic invoices have been sent to the tax authority;

- List of customs declarations cleared using form No. 01-2/HT issued with appendix 1 of Circular 80/2021/TT-BTC for cleared exported goods as per customs law.

* In case of VAT refund for a non-reimbursable ODA program/project:

- For non-reimbursable ODA managed and administered by the program/project owner:

+ Copy of the international treaty or non-reimbursable ODA agreement or exchange note committing and accepting non-reimbursable ODA; copy of program document approval decision, project non-project document or investment decision and approved project document or feasibility study report as per points a, b Clause 2, Article 80 of Decree 56/2020/ND-CP.

+ Request for confirmation of legitimate expenses for operational funds and request for payment of investment funds by the project owner as per point c Clause 2, Article 80 of Decree 56/2020/ND-CP and point a Clause 10, Article 10 of Decree 11/2020/ND-CP.

+ Invoice and proof of goods and services purchasing list using form No. 01-1/HT issued with appendix 1 of Circular 80/2021/TT-BTC.

+ Copy of accreditation by the program/project management authority for the program/project owner on the form of non-reimbursable ODA subject to VAT refunds and the unsuitability of state budget allocation for paying VAT.

+ If the program/project owner allocates part or all of the program/project to another unit/organization according to non-reimbursable ODA regulations not specified in documents at points c.1.1, c.1.4 Clause 2, Article 28 of Circular 80/2021/TT-BTC, additional documents comprise:

++ Copy of the document assigning the management and administration of the non-reimbursable ODA program/project to the requesting unit/organization;

​++ Copy of the establishment document for the representative office of the donor, or organization assigned by the donor, issued by the competent authority.

+ If the main contractor applies for a tax refund, in addition to documents specified at points c.1.1, c.1.4 Clause 2, Article 28 of Circular 80/2021/TT-BTC, a copy of the contract between the project owner and the main contractor clearly stating that the payment amount does not include VAT is required.

Taxpayers only need to submit the documents specified at points c.1.1, c.1.4, c.1.5, c.1.6 of Clause 2, Article 28 of Circular 80/2021/TT-BTC for the first-time refund application or when there are changes or additions.

- For non-reimbursable ODA managed and administered directly by the donor:

+ Documents as specified at points c.1.1, c.1.3 of Clause 2, Article 28 of Circular 80/2021/TT-BTC;

+ If the donor designates a representative office or organization to manage and administer the program/project (excluding cases specified at point c.2.3, Clause 2, Article 28 of Circular 80/2021/TT-BTC), but this is not stated in documents at point c.1.1, Clause 2, Article 28 of Circular 80/2021/TT-BTC, the following additional documents are required:

++ Copy of document assigning the management and administration of the non-reimbursable ODA program/project to the representative office of the donor or organization designated by the donor;

++ Copy of the establishment document for the representative office of the donor, or organization assigned by the donor, issued by the competent authority.

+ If the main contractor applies for a tax refund, in addition to documents specified at point c.2.1, Clause 2, Article 28 of Circular 80/2021/TT-BTC, a copy of the contract between the donor and the main contractor or a contract summary with the donor's confirmation of the signed contract details, including contract number, signing date, contract term, scope of work, contract value, payment method, and the payment amount excluding VAT is required.

Taxpayers only must submit the documents specified at points c.1.1, c.2.2, c.2.3 of Clause 2, Article 28 of Circular 80/2021/TT-BTC for the first-time refund application or when there are changes or additions.* Refund cases for goods and services purchased domestically using non-refundable aid funds not part of official development assistance:

- A copy of the Approval Decision for the program, project, non-project aid documentation, and program, project, non-project documentation as stipulated in point a, clause 2, Article 24 Decree 80/2020/ND-CP;

- A request for confirmation of valid career capital expenses regarding career expenditures and a payment request for investment capital regarding investment expenditures by the project owner (in case of receiving non-refundable aid sourced from the state budget) as stipulated in point b, clause 2, Article 24 Decree 80/2020/ND-CP and point a, clause 10, Article 10 Decree 11/2020/ND-CP.

- A list of invoices and documents for purchased goods and services following Form No. 01-1/HT issued along with Annex 1 Circular 80/2021/TT-BTC.

The taxpayer is only required to submit the documents stipulated in point d.1, clause 2, Article 28 Circular 80/2021/TT-BTC for the first tax refund application or when changes and additions are made.

* Refund cases for goods and services purchased domestically using emergency international aid funds for relief and disaster recovery in Vietnam:

- A copy of the Decision on receiving emergency aid for relief (in the case of emergency international aid for relief) or Decision on the policy for receiving emergency international aid for disaster recovery and the emergency international aid documentation for disaster recovery (in the case of emergency international aid for disaster recovery) as stipulated in clauses 6, 7, 8, Article 3 Decree 50/2020/ND-CP.

- A list of invoices and documents for purchased goods and services following Form No. 01-1/HT issued along with Annex 1, Article 28 Circular 80/2021/TT-BTC.

The taxpayer is only required to submit the documents stipulated in point đ.1, clause 2, Article 28 Circular 80/2021/TT-BTC for the first tax refund application or when changes and additions are made.

* Refund cases for diplomatic tax exemption:

- A list of value-added tax for foreign missions' goods and services following Form No. 01-3a/HT issued along with Annex 1, Article 28 Circular 80/2021/TT-BTC certified by the State Protocol Department of the Ministry of Foreign Affairs on the tax-exempt input costs for refund purposes.

- A list of public employees eligible for value-added tax refund following Form No. 01-3b/HT issued along with Annex 1, Article 28 Circular 80/2021/TT-BTC.

* Refund cases for commercial banks as value-added tax refund agents for departing foreign customers:

A list of value-added tax refund documents for departing foreign customers following Form No. 01-4/HT issued along with Annex 1, Article 28 Circular 80/2021/TT-BTC.

* Value-added tax refund cases based on the decision of a competent authority according to the law: Decision of the competent authority.