Classification of tax refund application under Circular 80/2021/TT-BTC in Vietnam

Classification of tax refund application under Circular 80/2021/TT-BTC in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of tax refund in Vietnam

According to Article 70 of the Law on Tax Administration 2019, cases of tax refund include:

- Tax authorities shall refund tax in the cases specified by tax laws.

- Tax authorities shall refund overpaid amounts in accordance with Clause 1 Article 60 of the Law on Tax Administration 2019.

+ If the tax, late payment interest or fine paid by a taxpayer is greater than the amount payable, the overpaid amount may be offset against the outstanding tax, late payment interest or fine;

Or against the tax, late payment interest or fine payable next time, or may be refunded if the taxpayer no longer has outstanding tax, late payment interest or fine.

+ In case the taxpayer wishes to have the overpaid amount be offset against the outstanding tax, late payment interest or fine, late payment interest shall not be charged over the period from the date on which the overpaid amount is paid to the day on which these amounts are offset by the tax authority.

2. Classification of tax refund application under Circular 80/2021/TT-BTC in Vietnam

Classification of tax refund application in Vietnam according to Article 33 of Circular 80/2021/TT-BTC as follows:

(1) A tax refund application shall be subject to inspection before refund in one of the following cases:

- The taxpayer submits the application for tax refund according to tax laws for the first time. In case the taxpayer's first tax refund application is not granted, the next tax refund application is still considered the first application. Specific cases:

+ Tax refund according to VAT laws including:

++ Refund of VAT on goods and services purchased for the investment project;

++ Refund of VAT on goods and services purchased for production, sale of goods and services for exports.

++ Refund of VAT on program/project funded by ODA grant;

++ Refund of VAT on domestic goods and services purchased with non-ODA grant aid from foreign organizations.

+ First refund of excise tax.

+ First tax refund under separate contracts or agreements with organizations and individuals in Vietnam according to Double Taxation Agreements and other International Agreement to which the Socialist Republic of Vietnam is a signatory.

- The application for tax refund is submitted within 02 years from the day on which the taxpayer's was penalized for tax evasion;

In case the taxpayer submits multiple tax refund applications in 02 years, when the taxpayer submits the first application after being penalized for tax evasion, if the tax authority determines that the taxpayer does not understate tax payable or overstate refundable tax according to Article 142 of the Law on Tax Administration 2019;

Or does not commit tax evasion according to Article 143 of the Law on Tax Administration 2019, the next tax refund applications of the taxpayer will not be subject to inspection before refund.

In case the taxpayer declares tax incorrectly in the next tax refund application according to Article 142 or Article 143 of the Law on Tax Administration 2019, these applications will be subject to inspection before refund for 02 years from the day on which penalties for tax evasion are imposed.

- The tax refund application is submitted upon transfer (for state-owned enterprises), dissolution, bankruptcy, shutdown, sale of the organization or enterprise;

In case the taxpayer mentioned in this Point has to finalize tax for shutdown and has determined refundable tax, the tax authority shall consider refunding tax according to the inspection result instead of classifying the application as being subject to inspection before refund.

- The tax refund application poses high tax risks according to regulations on risk management in tax administration;

- The tax refund application is eligible for tax refund before inspection but the taxpayer fails to provide explanation or supplement the tax refund application before the deadline specified in writing by the tax authority, or the explanation or supplementary documents are not able to prove that the declared tax is correct;

- The application for refund of VAT on exports or imports that are not paid for via a bank or credit institution as prescribed by law.

(2) Tax refund applications that are not in the case specified in (1) shall be eligible for refund before inspection.

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