Vietnam: Is a taxpayer entitled to tax refund if their paid tax amounts are larger than payable tax amounts?

Vietnam: Is a taxpayer entitled to tax refund if their paid tax amounts are larger than payable tax amounts?

Based on Clause 2, Article 8 of the Law on Personal Income Tax 2007, it states:

Tax Management and Tax Refunds

1. Taxpayer registration, tax declaration, tax deduction, tax payment, tax finalization, tax refund, handling of tax law violations, and tax management measures are performed in accordance with tax management laws.

2. Individuals are eligible for tax refunds in the following cases:

a) The amount of tax paid exceeds the amount due;

b) The individual has paid tax but has taxable income below the threshold for tax payment;

c) Other cases as decided by competent state authorities.

Additionally, Article 28 of Circular 111/2013/TT-BCT provides:

Tax Refund

1. Personal income tax refunds apply to individuals who have registered and obtained a tax code at the time of filing the tax finalization dossier.

2. For individuals who have authorized tax finalization to organizations or individuals that pay income on their behalf, the tax refund is carried out through these organizations or individuals. Such organizations or individuals offset the excess or short-paid taxes of individuals. After offsetting, if there is an overpaid amount, it can be carried over to the next period or refunded if requested.

3. For individuals declaring directly with the tax authority, they may choose a tax refund or carry over to the next period at the same tax authority.

4. In cases where individuals are eligible for a personal income tax refund but file the tax finalization declaration late, no penalties for administrative violations regarding late tax finalization declarations will apply.

Hence, if the amount of tax paid exceeds the tax due, it is one of the cases eligible for a personal income tax refund.

Vietnam: Is a taxpayer entitled to tax refund if their paid tax amounts are larger than payable tax amounts? (Image from the Internet)

Vietnam: What does the tax refund claim subject to inspection before refund include?

The dossier for personal income tax refunds is categorized into types as specified in Clause 1, Article 73 of the Law on Tax Administration 2019:

Classification of Tax Refund Dossiers

1. Tax refund dossiers are categorized into dossiers subject to pre-refund verification, and those eligible for refund before verification.

2. Tax refund claim subject to inspection before refunds include:

a) Dossiers for taxpayers requesting a refund for the first time in each refund case according to tax laws. If a taxpayer submits a refund dossier for the first time to the tax management authority but is not eligible for refund, the next refund request is still considered the first time;

b) Dossiers for taxpayers requesting a refund within 2 years from the time of being sanctioned for tax evasion;

c) Dossiers of organizations dissolving, going bankrupt, ceasing operations, selling, transferring, or handing over state enterprises;

d) Tax refund dossiers assessed as high risk according to tax management risk classification;

e) Dossiers previously eligible for immediate refund but which have expired as per written notifications from tax management authorities without the taxpayer providing explanations or supplementing the refund dossier, or if the provided explanations or supplemental documentation do not validate the declared tax amount;

f) Dossiers for tax refunds on exported and imported goods that do not make payments through commercial banks or other accredited financial institutions as prescribed by law;

g) Dossiers for tax refunds on exported and imported goods subject to pre-refund verification as stipulated by the Government of Vietnam.

3. Dossiers eligible for refund before verification are those of taxpayers not described in Clause 2 of this Article.

4. The Minister of Finance specifies details of this Article.

Accordingly, the tax refund claim subject to inspection before refund includes:

[1] Dossier for a taxpayer's first-time request for a refund in each tax refund scenario as per tax legislation. If a taxpayer initially submits a refund dossier to the tax management agency and is deemed ineligible for a refund, the subsequent refund request remains classified as the first-time request;

[2] Dossiers for requests submitted within 2 years post-sanction for tax evasion;

[3] Dossiers for organizations in dissolution, bankruptcy, cessation of operations, sale, or transfer of state enterprises;

[4] Tax refund dossiers considered high-risk under tax management's risk classification;

[5] Dossiers previously eligible for a refund but without taxpayer explanation or supplementation upon expiration of the deadline set by tax management notification, or when the documentation fails to prove the declared tax amount;

[6] Dossiers for tax refunds on exports or imports not settled through commercial banks or accredited financial institutions, per legal requirements;

[7] Dossiers for exports or imports necessitating pre-refund verification according to regulations by the Government of Vietnam.

Where are places of the tax refund claim subject to inspection before refunds in Vietnam?

The inspection of personal income tax refund dossiers is conducted in accordance with Article 74 of the Law on Tax Administration 2019:

Inspection place

1. Dossiers eligible for a refund before verification are inspected at the tax management agency's office.

2. Dossiers subject to pre-refund verification are inspected at the taxpayer's business location or at the office of a related organization or individual.

Thus, tax refund claim subject to inspection before refunds are inspected at either the taxpayer's business location or the office of the relevant organization or individual.