What are regulations on VAT refund for enterprises with expansion projects in Vietnam from July 1, 2025?
What is an expansion project in Vietnam?
Pursuant to Clause 5, Article 3 of the Law on Investment 2020, an expansion project is an investment project that develops an ongoing investment project by expanding the scale, enhancing the capacity, innovating technology, reducing pollution, or improving the environment.
What are regulations on VAT refund for enterprises with expansion projects in Vietnam from July 1, 2025?
Pursuant to Clause 2, Article 15 of the Law on Value-Added Tax 2024 (effective from July 1, 2025), the VAT refund for enterprises with expansion projects is regulated as follows:
- Enterprises registered to pay VAT using the credit method with expansion projects according to the law on investment (including investment projects divided into multiple investment stages or items, except for investment projects that do not form fixed assets for the enterprise) in the investment phase or oil and gas exploration and development projects in the investment phase that have incurred input VAT during the investment phase and have not been refunded shall offset this amount with the VAT payable from ongoing production and business activities (if any).
If after the offset, the input VAT of the expansion project that has not been fully deducted is 300 million VND or more, a VAT refund may be obtained.
In cases where the investment project is completed (including investment projects divided into multiple stages or items with completed stages or items), but the enterprise has not yet processed the VAT refund incurred during the investment phase (for completed investment items or stages), the enterprise shall submit a VAT refund dossier in accordance with regulations within 1 year from the date of the completion of the investment project or completion of investment stages or items.
Note:
+ The date of completion of the expansion project or investment stage or item is the date when revenue from the expansion project or the revenue from the investment stage or item is generated.
+ The revenue mentioned in this section does not include revenue arising during the trial operation period, financial performance revenue, or liquidation of raw materials from the expansion project.
What are regulations on VAT refund for enterprises with expansion projects in Vietnam from July 1, 2025? (Image from the Internet)
What are conditions for VAT refund for enterprises with expansion projects in Vietnam from July 1, 2025?
Enterprises with expansion projects eligible for VAT refund must meet the following conditions under Clause 9, Article 15 of the Law on Value-Added Tax 2024 (effective from July 1, 2025):
+ Enterprises must pay VAT by the credit method, prepare and maintain accounting books, and documents in accordance with accounting laws; have a bank account under the business's tax code;
+ Meet the conditions for deducting input VAT according to Clause 2, Article 14 of the Law on Value-Added Tax 2024:
"2. Conditions for deducting input value-added tax are regulated as follows:
a) Having value-added tax invoices for goods and services purchased or documents for paid value-added tax at importation or documents for paid value-added tax replacing the foreign party as specified in Clause 3 and Clause 4, Article 4 of this Law. The Minister of Finance specifies the documents for paid value-added tax replacing the foreign party;
b) Having non-cash payment documents for purchased goods and services, except for certain specific cases as prescribed by the Government of Vietnam;
c) For exported goods and services, in addition to the conditions specified in points a and b of this clause, there must be: contracts signed with foreign parties for selling, processing goods, or providing services; sales invoices; non-cash payment evidences; customs declarations for exported goods; packing notes, waybills, insurance documents for goods (if any). The Government of Vietnam specifies conditions for deduction for exporting goods via electronic commerce platforms overseas and other specific cases."
+ Must not fall under the cases stipulated in Clause 3, Article 14 of the Law on Value-Added Tax 2024:
"3. Business establishments failing to meet the deduction regulations in Clause 1 and Clause 2 of this Article, and invoices and documents formed from prohibited acts in this Law, shall not be eligible for value-added tax deduction."
+ The seller must have declared and paid VAT as prescribed for invoices issued to enterprises requesting a refund.
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