What are the guidelines of Vietnam General Department of Taxation on VAT refund for exported goods and services?
What are the cases of tax refund in Vietnam?
According to the provisions of Article 13 of the Law on Value-Added Tax 2008 (amended by Clause 3, Article 1 of the Law amendments to some Articles of the Law on Value-added tax, the Law on special excise duty, and the Law on Tax administration 2016), this content is as follows: :
Cases of tax refund
1. When the input VAT of a business establishment that uses the deduction method is not completely deducted in the month or in the quarter, it shall be deducted in the next period; if the input VAT is not completely deducted after at least 12 months or 4 quarters from the month or the quarter in which the undeducted VAT arises, the business establishment shall receive a tax refund.
When a business establishment that uses the deduction method has a new project of investment, the VAT on goods and services purchased during the investment is not deducted, and the remaining tax is 300 million VND or higher, the establishment shall receive a tax refund.
2. When the undeducted VAT on exported goods and services of a business establishment reaches 300 million VND in the month or the quarter, the establishment shall receive a VAT refund by the month or quarter.
3. 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.
4. 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.
5. Refund of VAT for programs/projects using non-refundable ODA, non-refundable aid, or humanitarian aid:
a) 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;
b) 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.
6. 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.
7. The business establishments that receives 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.”
Thus, business establishments will be refunded value added tax when falling into the cases specified above.
What are the guidelines of Vietnam General Department of Taxation on VAT refund for exported goods and services?
Are the goods that are imported and subsequently exported to other countries subject to tax refund in Vietnam?
According to the provisions of Clause 4, Article 18 of Circular 219/2013/TT-BTC (amended by Article 2 of Circular 25/2018/TT-BTC) on this issue as follows:
Cases of VAT refund
...
4. Refund of tax on exported goods/services
a) In a month (in case of monthly declaration) or quarter (in case of quarterly declaration), if the input VAT on exported goods/services (including goods that are imported and subsequently exported to non-tariff areas and the goods that are imported and subsequently exported to other countries) of a business establishment remains at least 300 million dong after being offset against, it shall be refunded by month or quarter. If such input VAT is less than 300 million dong, it shall be offset against in the next month/quarter.
In a month/quarter, if a business establishment has both exported goods/services and goods/services sold domestically, input VAT on purchases used for manufacturing of exported goods/services shall be separately recorded. Otherwise, input VAT shall be determined according to the ratio of revenue from exported goods/services to total revenue from goods/services accrued from the tax period succeeding the period in which tax is refunded to the current period in which tax refund is claimed.
If the input VAT on exported goods and services (including the input VAT separately recorded and the input VAT determined through the aforementioned ratio) remains at least 300 million dong after having been deducted from VAT on goods and services sold domestically, the business establishment shall receive a refund of VAT on exported goods and services. The refunded amount of VAT on exported goods and services shall not exceed the revenue from such exported goods and services multiplied by (x) 10%.
Certain cases of eligibility for tax refund upon exportation: The business establishment that has goods exported through entrustment; the business establishment that processes exports for foreign principals on a contract basis; the business establishment that has goods and materials exported for overseas construction works; and the business establishment whose exports are delivered to other domestic entities as requested by the importers.
b) VAT will not be refunded if the goods are imported and then exported outside a customs controlled area in accordance with regulations of law on customs or the goods are exported outside the customs control area in accordance with regulations of law on customs.
c) The tax authority shall grant a refund before inspection if the taxpayer who is a manufacturer of exports has not incurred any penalty for smuggling, illegal cross-border transport of goods, tax evasion, tax fraud, trade fraud for two consecutive years or the taxpayer does not pose a high risk according to the Law on Tax Administration and its instructional documents.”
Accordingly, goods that are imported and subsequently exported to non-tariff areas and the goods that are imported and subsequently exported to other countries of a business establishment remains at least 300 million dong after being offset against, it shall be refunded by month or quarter.
If such input VAT is less than 300 million dong, it shall be offset against in the next month/quarter.
However, VAT will not be refunded if the goods are imported and then exported outside a customs-controlled area in accordance with regulations of law on customs or the goods are exported outside the customs control area in accordance with regulations of law on customs.
What are the guidelines of Vietnam General Department of Taxation on VAT refund for exported goods and services?
According to the guidance in Official Dispatch 3372/CTHN-TTHT of 2023, this content is guided as follows:
In case a business establishment in a month (for the case of monthly declaration) or a quarter (for the case of a quarterly declaration) has exported goods and services whose input value-added tax amount has not yet been deducted. deducted from VND 300 million or more, they will be refunded value-added tax on a monthly or quarterly basis; In case the input value-added tax amount that has not yet been deducted is less than VND 300 million in a month or quarter, it will be deducted in the next month or quarter according to the provisions of Clause 2, Article 1 of Decree 49/2022/ND-CP dated July 29, 2022 of the Government. Goods and services for export to be eligible for tax credit or input VAT refund must satisfy the conditions and procedures prescribed in Article 16 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Government. The financial.
Thus, in the case of a business establishment in a month (for the case of monthly declaration), a quarter (for the case of a quarterly declaration) has exported goods and services with a value-added tax amount. If the input has not yet been deducted from 300 million VND or more, the value-added tax will be refunded on a monthly or quarterly basis;
In case the input value-added tax amount that has not yet been deducted is less than VND 300 million in a month or quarter, it will be deducted in the next month or quarter according to the provisions of Clause 2, Article 1 of Decree 49/2022/ND-CP.
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