What is the classification of tax refund claims in Vietnam?

When are individuals eligible for personal income tax refunds in Vietnam?

Based on Article 8 of the 2007 Law on Personal Income Tax which regulates tax management and tax refunds as follows:

Tax Management and Tax Refunds

1. Taxpayer registration, declarations, tax deductions, tax payments, tax settlements, tax refunds, handling of tax law violations, and other tax management measures are carried out according to the legal provisions on tax management.

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

a) The amount of tax paid is greater than the amount of tax payable;

b) The individual has paid tax but the taxable income does not reach the level to be taxed;

c) Other cases as determined by the competent state authority.

From the above regulation, it can be observed that individuals are eligible for personal income tax refunds in the following cases:

- The amount of tax paid is greater than the amount of tax payable;

- The individual has paid tax, but the taxable income does not reach the level to be taxed;

- Other cases as determined by the competent state authority.

When are individuals eligible for personal income tax refunds in Vietnam? (Image from the Internet)

What is the classification of tax refund claims in Vietnam?

According to Article 73 of the 2019 Tax Administration Law, tax refund claims are divided into two categories: files subject to pre-refund examination and files subject to pre-refund status.

- Files subject to pre-refund examination include:

+ Files of taxpayers requesting a refund for the first time for each tax refund case according to the legal provisions on taxation.

In case a taxpayer submits a tax refund file to the management tax authority for the first time but is not eligible for a refund according to the regulations, the subsequent refund request is still considered the first refund request;

+ Files of taxpayers requesting a tax refund within 2 years from the time of being penalized for tax evasion;

+ Files of organizations dissolving, bankrupt, terminating activities, selling, assigning, and transferring state enterprises;

+ tax refund claims classified as high risk according to risk management in tax administration;

+ tax refund claims that fall under pre-refund but do not meet the time limit according to written notification from the tax management authority where the taxpayer does not explain, supplement the tax refund file or have explanations, supplemented tax refund claims but fail to prove the declared tax amount is correct;

+ tax refund claims for exported and imported goods that are not paid through Vietnamese commercial banks or other financial institutions according to legal regulations;

+ tax refund claims for exported and imported goods subject to pre-refund examination as regulated by the Government of Vietnam.

- Files subject to pre-refund status are those of taxpayers not subject to pre-refund examination.

What is the time limit for handling personal income tax refund claims in Vietnam?

As stipulated in Article 75 of the 2019 Tax Administration Law, the processing of tax refund claims is as follows:

- For files subject to pre-refund status:

+ No later than 6 working days from the date the tax management authority issues a notification on the acceptance of the file and the deadline for processing tax refund claims, the tax management authority must decide on the tax refund to the taxpayer or notify the transfer of the taxpayer's file to pre-refund examination if falling under cases specified in Clause 2, Article 73 of the 2019 Tax Administration Law or notify no tax refund to the taxpayer if the file does not meet refund conditions.

- If information declared on the tax refund file differs from the management information of the tax authority, the tax authority must notify in writing for the taxpayer to provide explanation or supplement information. The time for explanation and supplementing information is not included in the tax refund file processing duration.

- For files subject to pre-refund examination, no later than 40 days from the date the tax management authority has a written notice of acceptance of the file and the deadline for processing tax refund claims, the tax management authority must decide on the tax refund to the taxpayer or deny the tax refund if the file does not meet refund conditions.

- Beyond the deadline prescribed for tax refunds, if the delay in issuing a tax refund decision is due to the fault of the tax management authority, in addition to the tax amount to be refunded, the tax authority must pay interest at a rate of 0.03%/day on the amount to be refunded and the number of days delayed. The interest money is paid from the central budget according to legal regulations on the state budget.