What are the cases of tax refund before inspection in Vietnam?

What are the cases of tax refund before inspection in Vietnam?

According to Clause 2, Article 33 Circular 80/2021/TT-BTC, the application eligible for tax refund before inspection includes the application of taxpayers not falling into the cases specified in Clause 1, Article 33 Circular 80/2021/TT-BTC below:

- The taxpayer submits the application for tax refund according to tax laws for the first time. In case the taxpayer's first tax refund application is not granted, the next tax refund application is still considered the first application. Specific cases:

+ Tax refund according to VAT laws including:

++ Refund of VAT on goods and services purchased for the investment project;

++ Refund of VAT on goods and services purchased for production, sale of goods and services for exports.

++ Refund of VAT on program/project funded by ODA grant;

++ Refund of VAT on domestic goods and services purchased with non-ODA grant aid from foreign organizations.

+ First refund of excise tax.

+ First tax refund under separate contracts or agreements with organizations and individuals in Vietnam according to Double Taxation Agreements and other International Agreement to which the Socialist Republic of Vietnam is a signatory.

- The application for tax refund is submitted within 02 years from the day on which the taxpayer's was penalized for tax evasion;

In case the taxpayer submits multiple tax refund applications in 02 years, when the taxpayer submits the first application after being penalized for tax evasion, if the tax authority determines that the taxpayer does not understate tax payable or overstate refundable tax according to Article 142 of the Tax Administration Law 2019, or does not commit tax evasion according to Article 143 of the Tax Administration Law 2019, the next tax refund applications of the taxpayer will not be subject to inspection before refund. In case the taxpayer declares tax incorrectly in the next tax refund application according to Article 142 or Article 143 of Tax Administration Law 2019, these applications will be subject to inspection before refund for 02 years from the day on which penalties for tax evasion are imposed.

- The tax refund application is submitted upon transfer (for state-owned enterprises), dissolution, bankruptcy, shutdown, sale of the organization or enterprise;

In case the taxpayer mentioned in this Point has to finalize tax for shutdown and has determined refundable tax, the tax authority shall consider refunding tax according to the inspection result instead of classifying the application as being subject to inspection before refund.

- The tax refund application poses high tax risks according to regulations on risk management in tax administration;

- The tax refund application is eligible for tax refund before inspection but the taxpayer fails to provide explanation or supplement the tax refund application before the deadline specified in writing by the tax authority, or the explanation or supplementary documents are not able to prove that the declared tax is correct;

- The application for refund of VAT on exports or imports that are not paid for via a bank or credit institution as prescribed by law.

What are the cases of tax refund before inspection in Vietnam? (Image from internet)

What is the determination of the refundable tax amount in cases of tax refund before inspection in Vietnam?

The method of determining refundable tax amounts in cases of tax refund before inspection is defined in point b, clause 1, Article 34 Circular 80/2021/TT-BTC as follows:

On the basis of the taxpayer's tax refund application and information about the taxpayer in the database, the tax authority shall inspect the tax refund application at the tax authority in order to determine eligibility for tax refund. To be specific:

(1) In case the taxpayer is eligible for tax refund, the tax authority shall compare the claimed amount specified in the tax refund application with the tax declaration dossier of the taxpayer. The refundable amount shall be conformable with the Tax Administration Law 2019 and its guiding documents.

(2) If information is not adequate for determination of the taxpayer's eligibility for tax refund, the tax authority shall send the taxpayer a request for explanation and supplementary documents according to Form No. 01/TB-BSTT-NNT enclosed with Decree No. 126/2020/ND-CP within 03 working days from the day on which the tax authority receives the tax refund application. In case the taxpayer submits an electronic application, the request shall be sent via the information portal of General Department of Taxation.

Within 10 working days from the day on which the request is issued by the tax authority, the taxpayer shall provide explanation or supplementary documents to the tax authority.

If the taxpayer fails to provide explanation or supplementary documents by the deadline or the explanation and supplementary documents are not able to prove that the declared tax is correct, the tax authority shall send the taxpayer a notice that the tax refund application is subject to inspection before refund according to Form No. 05/TB-HT in Appendix I of Circular 80/2021/TT-BTC within 06 working days from the day on which the tax refund application is received according to Article 32 of Circular 80/2021/TT-BTC.

The period of time from the issuance date of the request for explanation or supplementary documents to the day the tax authority receives the taxpayer's explanation or supplementary documents shall be excluded from the tax refund application processing time of the tax authority.

Which authority has the power to decide tax refund in cases of tax refund before inspection in Vietnam?

According to Article 76 Tax Administration Law 2019, the power to decide tax refund in cases of tax refund before inspection is as follows:

- The Director of the General Department of Taxation, Directors of Provincial Departments of Taxation shall decide tax refund in eligible cases as prescribed by tax laws.

- The heads of tax authorities receiving claims for refund of overpaid tax shall decide refund of overpaid tax in accordance with this Law.

- The Director of the General Department of Customs, Directors of Customs Departments and Sub-departments of Customs to which tax is overpaid shall decide tax refund in accordance with tax laws.