What are regulations on VAT refunds for projects funded by ODA grants in Vietnam from July 1, 2025?

What are regulations on VAT refunds for projects funded by ODA grants in Vietnam from July 1, 2025?

Pursuant to Clause 6, Article 15 of the Law on Value-Added Tax 2024 (document effective from July 1, 2025) regarding the VAT refunds for projects funded by ODA grants as follows:

- Program or project owners, main contractors, or organizations designated by the foreign donor to manage the program or project funded by ODA grants are eligible for a refund of the VAT paid for goods and services purchased in Vietnam to serve the program or project;

- Organizations in Vietnam using non-refundable aid or humanitarian aid funds from foreign organizations or individuals to purchase goods and services to serve non-refundable aid programs or humanitarian projects in Vietnam are eligible for a refund of the VAT paid for those goods and services.

What are regulations on VAT refunds for projects funded by ODA grants in Vietnam from July 1, 2025? (Image from the Internet)

Vietnam: What does the VAT refund claim for projects funded by ODA grants include?

According to Point c, Clause 1, Article 28 of Circular 80/2021/TT-BTC, the VAT refund claim for projects funded by ODA grants includes:

(1) In cases where the non-refundable ODA is managed directly by the program or project owner:

- A copy of the international treaty or non-refundable ODA agreement or exchange document regarding the commitment and receipt of non-refundable ODA funds; a copy of the Decision approving Project Documents, non-project documents, or Investment Decision for the program and Project Documents or Feasibility Study Report approved according to Point a, b, Clause 2, Article 90 of Decree 114/2021/ND-CP.

- A request for confirmation of legitimate expenses for non-business funds for non-business expenditures, and a request for capital payment for project capital for investment expenditures of the project owner in accordance with Point d, Clause 2, Article 90 of Decree 114/2021/ND-CP and Point a, Clause 10, Article 10 of Decree 11/2020/ND-CP.

- A list of invoices, receipts for goods and services purchased using Form No. 01-1/HT issued with Appendix 1 of Circular 80/2021/TT-BTC.

- A copy of the confirmation document from the program or project governing body to the program or project owner on the form of provision of the ODA program or project is non-refundable ODA eligible for VAT refunds and the absence of counterpart funding from the state budget to pay VAT.

- In cases where the project owner delegates management or implementation of part or the entire project to another unit or organization according to the legal provisions on managing and using non-refundable ODA, but this content is not mentioned in the documents specified at Point c.1.1, c.1.4, Clause 1, Article 28 of Circular 80/2021/TT-BTC, additional documents including a copy of the document assigning management or implementation of the non-refundable ODA program or project to the unit or organization applying for tax refund must be included.

- In cases where the main contractor prepares the tax refund dossier, in addition to the documents specified at Point c.1.1, c.1.2, c.1.3, c.1.4, Clause 1, Article 28 of Circular 80/2021/TT-BTC, a copy of the contract signed between the project owner and the main contractor showing that the payment price according to the bid result does not include VAT must also be submitted.

- The taxpayer is only required to submit documents specified in Points c.1.1, c.1.4, c.1.5, c.1.6 of Clause 1, Article 28 of Circular 80/2021/TT-BTC for the initial refund request or when there are changes, additions.

(2) In cases where non-refundable ODA is directly managed by the donor:

- A copy of the international treaty or non-refundable ODA agreement or exchange document regarding the commitment and receipt of non-refundable ODA funds; a copy of the Decision approving the Project Documents, non-project documents, or Investment Decision for the program and Project Documents or Feasibility Study Report approved according to Point a, b, Clause 2, Article 90 of Decree 114/2021/ND-CP.

- A list of invoices and receipts for goods and services purchased using Form No. 01-1/HT issued with Appendix 1 of Circular 80/2021/TT-BTC.

- If the donor appoints its Representative Office or organization to manage and implement the program or project (except as stipulated in Point c.2.3, Section c, Clause 1, Article 28 of Circular 80/2021/TT-BTC), and this content is not covered in the documents stipulated at Point c.1.1 of Section c, Clause 1, Article 28 of Circular 80/2021/TT-BTC, additional documents are required as follows:

+ A copy of the document assigning management or implementation of the non-refundable ODA program or project from the donor to the donor's Representative Office or designated organization;

+ A copy of the document from the competent authority regarding the establishment of the donor's Representative Office, or the organization designated by the donor.

- If the main contractor prepares the tax refund dossier, in addition to the documents specified at Point c.2.1, Section c, Clause 1, Article 28 of Circular 80/2021/TT-BTC, a copy of the contract signed between the donor and the main contractor, or a contract summary confirmed by the donor, which includes details such as contract number, date of signing, contract duration, scope of work, contract value, payment method, and payment price according to the bid result excluding VAT, must be submitted.

- Taxpayers are only required to submit documents specified at Points c.1.1, c.2.2, c.2.3, Section c, Clause 1, Article 28 of Circular 80/2021/TT-BTC for the initial refund request or when changes or additions are made.

Who is authorized to make decisions on tax refunds in Vietnam from January 1, 2025?

Pursuant to Article 76 of the Tax Administration Law 2019 as amended by Clause 11, Article 6 of the Amended Law on Securities, Accounting, Independent Auditing, State Budget, Public Asset Management, Tax Administration, Personal Income Tax, National Reserve, Administrative Violation Handling 2024 (document effective from January 1, 2025), the authorities with the power to make tax refund decisions include:

- Director General of the General Department of Taxation

- Director of the Tax Department

- Head of the Tax Sub-department

- Head of the Regional Tax Sub-department

They are authorized to decide on tax refunds in cases where tax refunds are governed by the law on taxes.

- Director General of the General Department of Customs, Director of the Customs Department, Head of the Customs Sub-department where the refundable tax amount arises, are authorized to decide on tax refunds in cases where tax refunds are governed by the law on taxes.