What are the cases of VAT refund in Vietnam? What are the conditions for VAT refund?
What are the cases of VAT refund in Vietnam?
Pursuant to the provisions of Article 13 of the 2008 Law on Value-Added Tax (amended by Clause 7, Article 1 of the 2013 Law on Amendments to the Law on Value-Added Tax; amended by Clause 3, Article 1 of the 2016 Law on Amendments to some articles of the Law on Value-Added Tax, the Law on special excise duty and the Law on Tax Administration) stipulating the cases of VAT refund as follows:
(1) 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 carriedforward 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 manufacture project where the total value of natural resources or minerals plus energy costs makes up at least 51% of the product price.
(2) 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.
(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:
- 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.
(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.
What are the cases of VAT refund in Vietnam? What are the conditions for VAT refund?
What are the conditions for VAT refund in Vietnam?
As for the regulations on conditions for value-added tax refund, Article 19 of Circular 219/2013/TT-BTC stipulates that:
- To be eligible for tax refund according to Points 1, 2, 3, 4, 5 Article 18 of Circular 219/2013/TT-BTC, the taxpayer must pay tax using credit-invoice method, be issued with a Certificate of Business registration or investment license or practice certificate, or a decision on establishment issued by a competent authority, have a legal seal, keep accounting records in accordance with accounting laws, and have deposit accounts at banks according to the taxpayer’s TIN, specifically:
Organizations and business establishments eligible for value-added tax refund must meet the following conditions for value-added tax refund:
+ Pay tax by deduction method
+ Having been granted an enterprise registration certificate or an investment license or an establishment decision of a competent authority
+ Having a seal in accordance with the law
+ Make and keep accounting books and accounting vouchers according to the provisions of law on accounting
+ Having a deposit account at a bank according to the business establishment's tax identification number
- Business establishments that have declared a request for tax refund on the VAT declaration are not allowed to transfer the input tax amount requested for tax refund to the deductible tax amount of the following month.
Which agency has the power to decide tax refund in Vietnam?
Pursuant to Article 76 of the 2019 Law on Tax Administration of Vietnam stipulating 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.
- The Minister of Finance shall provide for tax refund procedures.
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