If the residual input VAT on the investment projects is 300 million VND or more, shall it be refundable in Vietnam?

If the residual input VAT on the investment projects is 300 million VND or more, shall it be refundable in Vietnam?

Based on Clause 2, Article 15 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the regulation on VAT refund for investment is as follows:

Value-Added Tax Refund

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2. The VAT refund for investment is stipulated as follows:

a) A business establishment registered to pay VAT using the credit method with an investment project (new investment project, expanded investment project) according to the investment laws (including investment projects divided into multiple investment phases or multiple investment items, excluding investment projects not forming fixed assets of the enterprise) that is in the investment stage or an oil and gas exploration or development project in the investment phase, has input VAT incurred during the investment phase that has not been refunded, the business establishment shall offset this with the VAT payable for ongoing production and business activities (if any). After offsetting, if the input VAT of the investment project that has not been fully deducted is from VND 300 million or more, a VAT refund is granted.

In cases where the investment project has been completed (including investment projects divided into multiple phases, investment items where the phase, investment item has been completed) but the business establishment has not applied for a VAT refund incurred during the investment phase (investment item, investment phase completed), the business establishment must submit a VAT refund application as prescribed within one year from the date the investment project or investment phase, investment item is completed.

The date the investment project or investment phase, investment item is completed is the date revenue is generated from the investment project or revenue from the investment phase, investment item. Revenue specified in this clause does not include revenue incurred during the trial run, revenue from financial activities, or liquidation of investment project materials;

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Thus, if the input VAT of the new investment project has not been fully deducted from VND 300 million or more after the business has offset it with the VAT payable for ongoing production and business activities (if any), a VAT refund is granted.

If the residual input VAT on the investment projects is 300 million VND or more, shall it be refundable in Vietnam? (Image from the Internet)

From July 1, 2025, what are the conditions for a business establishment to be eligible for VAT refund in Vietnam?

Based on Clause 9, Article 15 of the Law on Value-Added Tax 2024, the conditions for a business establishment to be eligible for VAT refund are as follows:

- The business establishment that qualifies for a refund under Clauses 1, 2, 3, and 4, Article 15 of the Law on Value-Added Tax 2024 must be a business establishment paying VAT under the credit method, maintaining and preserving accounting books and vouchers according to accounting laws; having a bank account under the business's tax code;

- Meet the conditions for input VAT deduction as follows:

+ Have VAT invoices for purchasing goods and services or documents for VAT payment at the import stage or documents for paying VAT on behalf of a foreign party as stipulated in Clauses 3 and 4, Article 4 of the Law on Value-Added Tax 2024. The Minister of Finance stipulates the documents for VAT payment on behalf of a foreign party;

+ Have non-cash payment documents for purchased goods and services, except for some special cases stipulated by the Government of Vietnam;

+ For exported goods and services, in addition to the conditions stipulated at Points a and b, Clause 2, Article 14 of the Law on Value-Added Tax 2024, there must also be: a contract signed with a foreign party on the sale, processing of goods, supply of services; sales invoices for goods, supply of services; non-cash payment documents; customs declarations for exported goods; packing list, bill of lading, insurance documents (if any). The Government of Vietnam prescribes the conditions for deduction in case of exporting goods through an overseas e-commerce platform and some other special cases.

- It does not fall under the category of businesses that do not meet the conditions for input VAT deduction, and invoices and documents issued from acts prohibited under the Law on Value-Added Tax 2024.

- The seller has declared and paid VAT according to the regulations for invoices issued to the business requesting a tax refund.

What are prohibited acts in VAT deduction and refund in Vietnam?

Based on Clause 2, Article 15 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the 08 prohibited acts in VAT deduction and refund are as follows:

(1) Buying, giving, selling, organizing advertising, brokering the purchase, selling of invoices.

(2) Creating transactions for the purchase, sale of goods, providing services that are nonexistent or non-conformable to the law.

(3) Issuing invoices for the sale of goods, services during the period of temporary business suspension, except for issuing invoices to customers to perform contracts signed before the announcement of temporary business suspension.

(4) Using illegal invoices, documents, or illegally using invoices, documents against the regulations of the Government of Vietnam.

(5) Not transferring electronic invoice data to the tax authorities as prescribed.

(6) Tampering with, misusing, unauthorized access, destroying the information systems for invoices, documents.

(7) Giving, receiving, brokering bribes or performing other acts related to invoices, documents to get tax deduction, tax refund, misappropriating tax money, evading VAT.

(8) Colluding, covering up; collusion between tax management officials, tax authorities, and business establishments, importers, between business establishments, importers in the use of illegal invoices, documents, illegal use of invoices, documents to get tax deduction, tax refund, misappropriating tax money, evading VAT.