Shall overpaid VAT be refunded to taxpayers in Vietnam?

Shall overpaid VAT be refunded to taxpayers in Vietnam?

Under the provisions of Article 25 Circular 80/2021/TT-BTC on the settlement of overpaid tax, late payment interest and fines:

Settlement of overpaid tax, late payment interest and fines

1. Overpaid tax, late payment interest or fine (hereinafter referred to as "overpaid amount") specified in Clause 1 Article 60 of the Law on Tax Administration shall be handled as follows:

a) Offsetting against the outstanding tax, late payment interest, fines (hereinafter referred to as "debts") or offset against tax, late payment interest, fines payable next time (hereinafter referred to as "new amounts payable") in the following cases:

a.1) Offset against the taxpayer's debts that belong to the same category and area as those of the overpaid amount.

a.2) Offset against the taxpayer's new amount payables that belong to the same category and area as those of the overpaid amount.

...

b) Refund, refund combined with budget offsetting

In case the overpaid amount cannot be completely offset according to Point a of this Clause or the taxpayer does not have any debt, the taxpayer may submit an application for refund or refund combined with state budget offsetting in accordance with Article 42 of this Circular. The overpaid amount will be refunded when the taxpayer has no debt.

Taxpayers who have overpaid VAT will receive a refund.

Shall overpaid VAT be refunded to taxpayers in Vietnam? (Image from the Internet)

What is the application form for the VAT refund in Vietnam?

The application form for the VAT refund is Form No. 01/HT Appendix 1 issued together with Circular 80/2021/TT-BTC as follows:

>> Download the application form for the VAT refund: Download

What are the objects subject to VAT in Vietnam?

Under Article 3 of the Law on VAT 2008 on taxable objects:

Taxable objects

Goods and services used for production, trading or consumption in Vietnam are subject to value-added tax, except those specified in Article 5 of this Law.

Thus, objects subject to VAT in Vietnam are goods and services used for production, trading or consumption in Vietnam (including goods and services purchased from organizations and individuals abroad), except for the following non-taxable objects:

-Cultivation and husbandry products, and reared and fished aquatic products which have not yet been processed into other products or have been just preliminarily processed and sold by producing and fishing organizations and individuals, and products at the stage of importation.

- Products which are animal breeds and plant varieties, including breeding eggs, breeding animals, seedlings, seeds, sperms, embryos and genetic materials.

- Irrigation and drainage; soil ploughing and harrowing; dredging of intra-field canals and ditches for agricultural production; services of harvesting farm produce.

- Salt products made of seawater, natural rock salt, refined salt and iodized salt.

- State-owned residential houses sold by the State to current tenants.

- Transfer of land use rights;

- Life insurance, student insurance, insurance on domestic animals, insurance on plants and reinsurance.

- Credit provision services; securities trading; capital transfer; derivative financial services, including interest-rate swap contracts, forward contracts, futures contracts, call or put options, foreign currency sales, and other derivative financial services as prescribed by law.

- Healthcare and animal health services, including medical examination and treatment and preventive services for humans and domestic animals.

- Public post and telecommunications and universal Internet services under the Governments programs.

- Public services on sanitation and water drainage in streets and residential areas; maintenance of zoos, flower gardens, parks, street greeneries and public lighting; funeral services;

- Renovation, repair and construction of cultural, artistic, public service and infrastructure works and residential houses for social policy beneficiaries, which are funded with peoples contributions or humanitarian aid.

- Teaching and vocational training as provided for by law.

- State budget-funded radio and television broadcasting.

- Publication, import and distribution of newspapers, journals, specialized bulletins, political books, textbooks, teaching materials, law books, scientific-technical books, books printed in ethnic minority languages as well as propaganda postcards, pictures and posters, including those in the form of audio or visual tapes or discs or electronic data; money printing.

- Mass transit by bus and tramcar.

- Machinery, equipment and supplies which cannot be manufactured at home and need to be imported for direct use in scientific research and technological development activities; machinery, equipment, spare parts, special-purpose means of transport and supplies which cannot be manufactured at home and need to be imported for prospecting, exploring and developing oil and gas fields; aircraft, drilling platforms and ships which cannot be manufactured at home and need to be imported for the formation of enterprises fixed assets or which are hired from foreign parties for production and business activities or for lease.

- Special-purpose weapons and military equipment for security and defense purposes.

- Goods imported as humanitarian aid or non-refundable aid; gifts for state agencies, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations or peoples armed forces units; donations or gifts for Vietnam-based individuals within the Government-prescribed quotas; belongings of foreign organizations and individuals within diplomatic immunity quotas; and personal effects within duty-free luggage quotas.

Goods and services sold to foreign organizations or individuals or international organizations for use as humanitarian aid, and non-refundable aid to Vietnam.

- Goods transferred out of border gate or transited via the Vietnamese territory; goods temporarily imported for re-export; goods temporarily exported for re-import; raw materials imported for the production or processing of goods for export under contracts signed with foreign parties; goods and services traded between foreign countries and non-tariff areas and between non-tariff areas.

- Technology transfer under the Law on Technology Transfer; transfer of intellectual property rights under the Law on Intellectual Property; computer software.

- Gold imported in the form of bars or ingots which have not yet been processed into fine-art articles, jewelries or other products.

- Exported products which are unprocessed mined resources or minerals as prescribed by the Government.

- Artificial products used for the substitution of diseased peoples organs; crutches, wheelchairs and other tools used exclusively for the disabled.

- Goods and services of business individuals who have a monthly income lower than the common minimum salary level applicable to domestic organizations and enterprises.

Establishments trading in non-taxable goods or services specified in this Article are not entitled to input value-added tax credit or refund, except the cases subject to the tax rate of 0% specified in Clause 1, Article 8 of the Law on VAT 2008.