Which tax authority shall process the tax refund application in Vietnam? What are 06 cases of inspection before refund in Vietnam?

Which tax authority shall process the tax refund application in Vietnam?

Based on the provisions of Article 32 of Circular 80/2021/TT-BTC as follows:

The receipt of tax refund applications is divided into two methods:

Method 1. Request for tax refund by electronic application

- Taxpayers submit electronic tax refund applications through the electronic portal of the General Department of Taxation or through other electronic portals as per regulations on electronic transactions in the field of taxation.

- The receipt of electronic tax refund applications from taxpayers is carried out according to regulations on electronic transactions in the field of taxation.

- Within 3 working days from the date indicated on the Notification of receipt of tax refund application according to form No. 01/TB-HT issued with Appendix I of this Circular, the tax authority handling the tax refund application shall issue a Notification of acceptance of the tax refund application according to form No. 02/TB-HT or a Notification of non-refundable status according to form No. 04/TB-HT in cases where the application is not eligible for a refund through the electronic portal of the General Department of Taxation or any other electronic portals where the taxpayer submitted the electronic tax refund application.

Method 2. Request for tax refund by paper application

- In cases where taxpayers submit a paper-based tax refund application at the tax authority, tax officials check the completeness of the application according to regulations. If the application is incomplete, tax officials will request the taxpayer to complete the application according to regulations.

If the application is complete, the tax official issues a Notification of receipt of the application according to form No. 01/TB-HT issued with Appendix I of this Circular to the taxpayer and records the receipt in the tax management application system.

- When a taxpayer submits an application via postal mail, the tax official acknowledges receipt by stamping, notes the date of receipt, and logs the application in the tax management application system.

- Within 3 working days from the receipt date of the tax refund application, the tax authority sends a Notification of acceptance of the tax refund application according to form No. 02/TB-HT or a Notification of incorrect procedure according to form No. 03/TB-HT for applications submitted via postal mail or a Notification of non-refundable status according to form No. 04/TB-HT if the application is not eligible for a refund.

* Cancellation of tax refund applications

If a taxpayer wishes to cancel a tax refund application previously submitted to the tax authority, they must submit a Written Request for Cancellation of Tax Refund Application according to form No. 01/DNHUY attached to Appendix I of this Circular. Within 3 working days from the receipt date of the Written Request for Cancellation from the taxpayer, the tax authority dealing with the tax refund application will send a Notification of acceptance of the cancellation request according to form No. 02/TB-HT, and simultaneously close the tax refund application in the tax authority’s records.

The taxpayer may adjust the refund amount for further offset into the tax declaration of the next declaration period after receiving the Notification of acceptance of the application cancellation, assuming all declaration and offset conditions are met, or resubmit the tax refund application.

If the tax authority has announced a decision to audit the refund before it’s completed, the taxpayer cannot submit a Written Request for Cancellation of the Refund Application. The tax authority handles the audit as specified in Article 110 of the Tax Administration Law and Chapter VIII of this Circular.

Which tax authority shall process the tax refund application in Vietnam? What are 06 cases of inspection before refund in Vietnam? (Image from Internet)

What are 06 cases of inspection before refund in Vietnam?

Based on Article 33 of Circular 80/2021/TT-BTC, the cases requiring an audit before a tax refund include:

* Applications subject to audit before a refund fall into one of the following categories:

Case 1: Applications from taxpayers requesting a refund for the first time for each type of refund as prescribed by tax law. If a taxpayer's first refund application submitted to the tax authority is not eligible for a refund per regulations, the subsequent request is still considered a first-time refund request, with the following specific instances:

- Refund cases under the Value Added Tax law include:

+ VAT refund for goods and services purchased for investment projects;

+ VAT refund for goods and services purchased for producing or trading export goods and services;

+ VAT refund for ODA non-refundable aid programs and projects;

+ VAT refund for goods and services purchased domestically using non-refundable aid not classified as official development assistance from foreign agencies and organizations.

- First-time refund under the Excise Tax law.

- First-time refund for each contract or agreement with organizations or individuals in Vietnam under the Agreement on Avoidance of Double Taxation and other international treaties to which the Socialist Republic of Vietnam is a signatory.

Case 2: Tax refund applications submitted within 2 years from the date of being sanctioned for tax evasion acts;

If a taxpayer submits multiple tax refund applications within 2 years, and in the first application after being sanctioned for tax evasion, the tax authority finds no incorrect declaration causing tax deficits or increases refundable amounts as per Article 142, or tax evasion acts as per Article 143 of the Tax Administration Law, then subsequent refund applications aren't subject to pre-refund audits.

If later refund applications reveal incorrect declarations or tax evasion acts as per Articles 142 and 143 of the Tax Administration Law, the refund application remains subject to pre-refund audits within 2 years from the date of sanction for tax evasion.

Case 3: Refund applications during transfer or cessation (for state enterprises), dissolution, bankruptcy, or cessation of operations, sales for entities, organizations;

When taxpayers' circumstances as described here require a tax audit to close operations, and the tax payable qualifies for a refund, the tax authority processes the refund based on audit results without categorizing it as requiring pre-refund audit.

Case 4: Refund applications labeled as high tax risk based on tax administration risk management classification;

Case 5: Applications previously approved for refund that reach the deadline as per written notification from tax authority without taxpayer clarification or documentation, or insufficiently justified;

Case 6: VAT refund applications for export or import goods not processed through commercial banks or other credit institutions as prescribed by law.

* Applications eligible for a refund beforehand are taxpayer applications not covered by the conditions in clause 1 of this Article.

What are the regulations on post-refund inspections in Vietnam?

Based on Article 39 of Circular 80/2021/TT-BTC regarding post-refund inspections:

- The tax authority conducts audits and inspections post-refund as specified in Sections 1, 2, 3 of Chapter XIII of the Tax Administration Law 2019 and other audit and inspection regulations.

- Based on post-refund audit results at the taxpayer's office, if unsatisfactory tax refund amounts are discovered, the tax authority issues a Decision on the recovery of the tax refund according to form No. 03/QD-THH attached to Appendix I of this Circular to reclaim the refunded tax from the taxpayer, impose penalties for violations, and calculate late payment interest (if any) as per the regulations.