Latest regulations on disgorgement of tax refund in Vietnam

Latest regulations on disgorgement of tax refund in Vietnam (Internet image)

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

1. The latest regulations on disgorgement of tax refund in Vietnam

Regulations on disgorgement of tax refund in Vietnam according to Article 40 of Circular 80/2021/TT-BTC are as follows:

- In case the tax authority or a competent authority, through inspection, discovers that tax is refunded against the regulations, the taxpayer shall return the excess refund and pay late payment interest thereon in accordance with Article 59 of the Law on Tax Administration and Article 21 of Circular 80/2021/TT-BTC for the period from the day on which State Treasury refunds tax;

Or offsets refundable tax against other state budget revenues under the refund disgorgement decision (Form No. 03/QD-THH in Appendix I attached to Circular 80/2021/TT-BTC), decision or document of the competent authority.

- If the taxpayer that discovers the unconformable refund themselves shall submit supplementary documents according to Article 47 of the Law on Tax Administration and Article 7 of Decree 126/2020/ND-CP;

Return the excess refund and pay late payment interest in accordance with Article 59 of the Law on Tax Administration and Article 21 of Circular 80/2021/TT-BTC for the period from the day on which State Treasury refunds tax or offsets refundable tax against other state budget revenues.

- In case the taxpayer has received the refund of VAT on exports but the exports are returned by the seller, the taxpayer shall submit supplementary documents according to Article 47 of the Law on Tax Administration and Article 7 of Decree 126/2020/ND-CP;

Return the VAT refund on the returned goods and pay late payment interest in accordance with Article 59 of the Law on Tax Administration and Article 21 of Circular 80/2021/TT-BTC for the period from the day on which State Treasury refunds tax or offsets refundable tax against other state budget revenues.

- The taxpayer may declare deduction of the unconformable refund if conditions for VAT deduction are fully satisfied according to VAT laws from the tax period succeeding the period in which the error is found in the cases specified in Clause 2 of Article 40 of Circular 80/2021/TT-BTC on declare it in the tax declaration dossier of the tax period in which the decision on refund disgorgement is received, or the decision/document of the competent authority mentioned in Clause 1 of Article 40 of Circular 80/2021/TT-BTC.

2. Responsibilities of tax authorities for processing tax refund applications in Vietnam

Responsibilities of tax authorities for processing tax refund applications in Vietnam according to Article 27 of Circular 80/2021/TT-BTC are as follows:

- Cases of tax refund according to tax laws

+ VAT refund according to VAT laws.

+ Refund of excise tax according to excise tax laws on biological gasoline.

+ Tax refund according to Double Taxation Agreements and other International Agreements to which the Socialist Republic of Vietnam is a signatory.

- Responsibility for receiving and processing applications for tax refund according to tax laws

+ Provincial Departments of Taxation shall receive and process tax refund applications mentioned in Clause 1 of Article 27 of Circular 80/2021/TT-BTC (except the cases specified in Point b and Point c of this Clause) submitted by taxpayers under management of Departments of Taxation and sub-departments of taxation.

Heads of Departments of Taxation of Hanoi, Ho Chi Minh City, Binh Duong province, Dong Nai province may assign sub-department of taxation to receive and process VAT refund applications from taxpayers under direct management of sub-departments of taxation, including the following tasks:

++ Classify tax refund applications eligible for tax refund before inspection or subject to inspection before refund;

++ Determine refundable tax;

++ Determine tax debt, fine, late payment interest to be offset against refundable tax;

++ Draft tax refund decisions or decisions on tax refund and state budget revenue offsetting (hereinafter referred to as "tax refund decision") or notification of rejected applications (if any);

++ Then transfer all documents to the department of taxation for completion according to this circular.

+ The Department of Taxation where the taxpayer declares VAT on the investment project according to Point a Clause 1 Article 11 of Decree 126/2020/ND-CP shall receive and process applications for refund of tax on the investment project of the taxpayer.

+ Supervisory tax authorities shall receive and process applications for 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.

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