What are cases where VAT is refunded monthly and quarterly in Vietnam?

What are cases where VAT is refunded monthly and quarterly in Vietnam?

Pursuant to Clause 2, Article 13 of the Law on Value-Added Tax 2008 as amended by Clause 7, Article 1 of the Law on Amendments and Supplements to the Law on Value-Added Tax 2013, the specific provisions regarding tax refunds are as follows:

Cases of Tax Refunds

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2. Business establishments in a month or quarter having exported goods or services, with the value-added tax input of 300 million VND or more that has not yet been credited, shall be entitled to a value-added tax refund on a monthly or quarterly basis.

3. Business establishments adopting the input deduction method for value-added tax shall be granted a value-added tax refund upon a change of ownership, change of business, merger, consolidation, division, separation, dissolution, bankruptcy, or cessation of operation, provided there is excess paid value-added tax or non-credited input tax.

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Thus, under the above regulations, the circumstances under which value-added tax is refunded monthly and quarterly include business establishments in a month or quarter with exported goods or services when the non-credited value-added tax input is 300 million VND or more.

What are cases where VAT is refunded monthly and quarterly in Vietnam? (Image from the Internet)

What are regulations on handling of overpaid tax, late payment interest and fines in Vietnam?

According to Article 60 of the Law on Tax Administration 2019, specific regulations on handling overpaid tax, late payment interest, and fines are as follows:

[1] Taxpayers who have paid more in taxes, late payment interest, and fines than the amount they were supposed to, may offset the excess amount against outstanding taxes, late payment interest, and fines or apply it against upcoming tax obligations. They may also request a refund if they have no outstanding tax debts or fines.

In cases where taxpayers suggest offsetting excess payments with outstanding debts, late payment interest will not be calculated on the offset amount from the date the overpayment arises until tax authorities apply the offset.

[2] If taxpayers request a refund of excess taxes, late payment interest, and fines, the tax authority must issue a decision to refund the excess amount or provide a written explanation within 5 working days from the date of receiving the request.

[3] overpaid tax, late payment interest, and fines will not be refunded, and the tax authority will clear these amounts in the accounting books and electronic data systems in the following situations:

- The tax authority has notified the taxpayer about the excess refund, but the taxpayer refuses the refund in writing;

- The taxpayer is not operating at the registered address with the tax authority, and there has been a public notice of the overpaid amount for 1 year without a written request for a refund from the taxpayer;

- The overpayment has been left unclaimed for more than 10 years from the date of payment to the state budget, where the taxpayer has neither offset tax obligations nor requested a refund.

[4] In the case of inactive taxpayers at their registered business address who have overpaid taxes, late payment interest, and fines, the tax authority will offset these against any outstanding taxes, late payment interest, and fines.

Note

The Minister of Finance will regulate the authority and procedures for handling overpaid taxes, late payment interest, and fines as stated in this Article.

What is the time limit for processing tax refund claims in Vietnam?

According to Article 75 of the Law on Tax Administration 2019, the specific timeline for processing tax refund claims is as follows:

- For applications eligible for a prior refund, the tax authority must decide on the refund within 6 working days from the date of notification about application acceptance and the tax refund processing time. Alternatively, it should inform the taxpayer about moving the application to audit before refunding if stipulated by Clause 2, Article 73 of the Law on Tax Administration 2019 or decline the refund if the application is insufficient for a tax refund.

- If the declared information in the tax refund claim differs from that in the tax authority's management, the tax authority must notify the taxpayer in writing to provide explanations or additional information. The time for explanations or additional information is not counted in the processing time for a tax refund claim.

- For applications subject to pre-refund audits, the tax authority must make a refund decision no later than 40 days from the date of written notification about the application acceptance and processing time. Refunds may be denied if the application lacks the criteria for a tax refund.

- If the deadlines outlined in Clause 1 and Clause 2 of Article 75 Law on Tax Administration 2019 are exceeded due to tax authorities’ errors, interest at a rate of 0.03% per day on the refund amount for each day delayed must be paid by the tax authority. The interest payment is sourced from the central budget as per national budgeting regulations.