07 cases eligible for VAT refund in Vietnam in 2023? What are the tax refund procedures?
07 cases eligible for VAT refund in Vietnam in 2023?
The cases eligible for VAT refund in Vietnam are specified in Article 13 of the 2008 Law on Value Added Tax in Vietnam (amended and supplemented by Clause 7, Article 1 of the 2013 Law on Amendments to Law on Value Added Tax in Vietnam, and Clause 3, of Article 1 of the 2016 Law on Amendments to Tax Laws), including:
Firstly, a business establishment that pays VAT using credit-invoice method may offset input VAT that remains after deduction in the month or the quarter against VAT incurred in the next period.
Where a business establishment has registered to pay VAT using credit-invoice method has a new investment project which is still in its investment stage, VAT on goods/services purchased serving the investment has not been deducted, and the remaining tax is at least VND 300 million, VAT shall be refunded.
The VAT that has not been deducted shall not be refunded and instead be carried forward to the next period in the following cases:
- The investment project does not have adequate charter capital as registered; engages in conditional business lines while the corresponding conditions have not been fully satisfied as prescribed by the Law on Investment or the fulfillment of such conditions is not maintained throughout its operation;
- The project is a natural resource extraction project or mineral extraction project licensed from July 01, 2016 or a manufacturing project where the total value of natural resources or minerals plus energy costs makes up at least 51% of the product price.
Secondly, a business establishment whose exported goods/services incur an input VAT of at least VND 300 million which has not been deducted in the month or quarter shall receive VAT refund for that month or quarter, unless such goods are imported for exportation or exports are not exported within a customs controlled area as prescribed by the Law on Customs.
Inspection after refund shall apply to any manufacturer of exports that does not violate regulations of law on taxation or customs for two consecutive years; any taxpayer that is not considered high-risk as prescribed by the Law on Tax administration.
Thirdly, the business establishment that uses the deduction method shall receive a refund of the surplus VAT or the VAT that is not completely deducted when the ownership is change, or when the enterprise is converted, merged, amalgamated, divided, dissolved, bankrupt, or shut down.
Fourthly, foreigners and Vietnamese people residing abroad who have passports or entry papers issued by foreign competent authorities shall receive refunds of tax on goods purchased in Vietnam and brought abroad.
Fifthly, refund of VAT for programs/projects using non-refundable ODA, non-refundable aid, or humanitarian aid:
- The leader of the program/project or the main contractor, the organization appointed by the foreign sponsor to manage the program/project shall receive a refund of VAT on the goods and services purchased in Vietnam to serve the program/project;
- The organizations in Vietnam that use non-refundable aid or humanitarian aid provided by foreign organizations and individuals to purchases goods and services to serve the program/project shall receive a refund of the tax on such goods and services.
Sixthly, a subject eligible for diplomatic immunity who purchases goods and services in Vietnam shall receive a refund of the VAT on the VAT invoice or the receipt that indicates the VAT-inclusive price.
Seventhly, the business establishments that receive the decisions on VAT refunds from competent authorities, and the cases of VAT refunds according to the International Agreements to which the Socialist Republic of Vietnam is a signatory.
07 cases eligible for VAT refund in Vietnam in 2023? What are the tax refund procedures?
What are the regulations on the application for VAT refund in Vietnam?
According to the provisions of Article 28 of Circular No. 80/2021/TT-BTC, the application for VAT refund in Vietnam includes:
An application for VAT refund according to VAT laws (except refund of VAT under international treaties; refund of input VAT that remains after deduction upon transfer of ownership, conversion of enterprises, consolidation, merger, full division, partial division, bankruptcy and shutdown of enterprises specified in Article 30 and Article 31 of this Circular) shall contain:
- The application form No. 01/HT in Appendix I hereof.
- Documents that are relevant to the case. To be specific:
+ Refund of VAT on an investment project:
++ Copy of the Certificate of Investment Registration or Investment Certificate or Investment License in case the Certificate of Investment Registration is mandatory;
++ If the project has a construction work: Copy of the Land Use Right (LUR) Certificate, land allocation decision or land lease contract of a competent authority; the construction license;
++ Copy of the charter capital contribution certificate;
++ Regarding investment projects of business establishments having conditional business lines in the investment stage that have been granted licenses for conditional business lines by competent state agencies according to regulations of laws on investment and specialized laws under regulations in Clause 3 Article 1 of Government’s Decree No. 49/2022/ND-CP dated July 29, 2022: Copy of one of the licenses, certificates, or written confirmation or approval for these conditional business lines;
++ A list of invoices and documentary evidence for purchases according to Form No. 01-1/HT in Appendix I hereof, unless the taxpayer has sent electronic invoices to the tax authority;
++ The decision on establishment of the Project Management Board, the project owner's decision on assignment of project management tasks, regulations on organizational structure and operation of the branch or Project Management Board (if tax refund is applied by the branch or Project Management Board).
+ Refund of VAT on exported goods and services:
++ A list of invoices and documentary evidence for purchases according to Form No. 01-1/HT in Appendix I hereof, unless the taxpayer has sent electronic invoices to the tax authority;
++ A list of customs declarations that are granted customs clearance according to Form No. 01-2/HT in Appendix I hereof (for exports granted customs clearance in accordance with customs laws).
+ Refund of VAT on a program/project funded by ODA grant:
++ In case the ODA grant is under direct management of the donor:
In case the donor appoints the donor's representative office or an organization to manage, execute the program/project (except the case specified in Point c.2.3 of this Clause) but this is not mentioned in any of the documents specified in Point c.1.1 of this Clause, the following documents shall also be included:
Copies of documents proving that the donor appoints the donor's representative office or an organization to manage, execute the program/project;
Copies of documents issued by competent authorities about establishment of the donor's representative office or the organization appointed by the donor.
++ In case the application for tax refund is prepared by the main contractor, in addition to the documents specified in Point c.2.1, there shall be copies of the contract between the donor and the main contractor or the contract summary bearing the donor's confirmation of the contract between the donor and the main contractor, including the following information: contract number, contract conclusion date, contract duration, scope of contract, value of contract, method of payment, VAT-exclusive contractual prices.
The taxpayer only has to include the documents specified in Points c.1.1, c.2.2, c.2.3 of this Clause in the first tax refund application or in the supplementary application.
+ Refund of VAT on domestic goods and services purchased with non-ODA grant aid
++ Copy of the decision to approve the program/project documents, the non-project assistance and the program/project/non-project grant aid documents according to Point a Clause 2 Article 24 of the Government’s Decree No. 80/2020/ND-CP dated 08/7/2020;
++ The written request for public service expenditure validation and reimbursement of the project owner according to (when receiving grant aid classified as state budget revenue) according to Point b Clause 2 Article 25 of the Government’s Decree No. 80/2020/ND-CP dated 08/7/2020 and Point a Clause 10 Article 10 of the Government’s Decree No. 11/2020/ND-CP dated 20/01/2020.
++ A list of invoices and documentary evidence for purchases according to Form No. 01-1/HT in Appendix I hereof, unless the taxpayer has sent electronic invoices to the tax authority.
The taxpayer only has to include the documents specified in Point d.1 of this Clause in the first tax refund application or in the supplementary application.
+ Refund of VAT on domestic goods and services purchased with international emergency aid for natural disaster recovery in Vietnam:
++ Copy of the decision to receive emergency aid or decision to receive receiving international emergency aid for natural disaster recovery and according to Clauses 6, 7, 8 Article 3 of the Government’s Decree No. 50/2020/ND-CP dated 20/4/2020.
++ A list of invoices and documentary evidence for purchases according to Form No. 01-1/HT in Appendix I hereof, unless the taxpayer has sent electronic invoices to the tax authority.
The taxpayer only has to include the documents specified in Point dd.1 of this Clause in the first tax refund application or in the supplementary application.
+ Tax refund due to diplomatic immunity:
++ The list of VAT on goods and services purchased for the diplomatic mission according to Form No. 01-3a/HT in Appendix I hereof which is certified by Directorate of State Protocol – the Ministry of Foreign Affairs that the expenses are eligible for tax refund due to diplomatic immunity.
++ List of foreign service officers who are eligible for VAT refund according to Form No. 01-3b/HT in Appendix I hereof.
+ Tax refund for commercial banks that are VAT refund agents for outbound passengers
The list of VAT refund documents for outbound passengers according to Form No. 01-4/HT in Appendix I hereof.
+ VAT refund under decision of a competent authority: The decision issued by the competent authority.
Which goods and services are subject to value added tax?
Pursuant to Article 2 of Circular No. 219/2013/TT-BTC stipulating as follows:
Taxable goods and services
Goods and services subject to VAT (hereinafter referred to as taxable goods and services) are those used for production, trading, and consumption in Vietnam (including those purchased from overseas organizations and individuals), except for the goods and services in Article 4 of this Circular.
Thus, goods and services used for production, trading, and consumption in Vietnam, except for the goods and services in Article 4 of Circular No. 219/2013/TT-BTC, shall be subject to VAT.
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