CONDITIONS AND PROCEDURES

FOR VALUE-ADDED TAX REFUNDS ACCORDING TO VIETNAM’S REGULATIONS

The value-added tax (VAT) refund is an administrative tax procedure designed to seek reimbursement from tax authorities for the value-added tax associated with the acquisition of goods and services for production and business operations, which had been previously paid by the taxpayer on behalf of the purchaser.

CASES AND CONDITIONS FOR VAT REFUNDS

1. Taxpayers who pay VAT using the tax deduction method are eligible for a refund if the input VAT has not been fully deducted in the current month or quarter and can be carried forward to subsequent periods.
2. Taxpayers who have registered for VAT payment using the deduction method and are engaged in new investment projects during the initial investment phase with unclaimed input VAT on goods and services purchased for investment and the remaining VAT exceeding three hundred million VND are entitled to a value-added tax refund.
3. Taxpayers who, within a given month or quarter, engage in the export of goods or services and possess unclaimed input VAT exceeding three hundred million Vietnamese Dong are eligible for a monthly or quarterly value-added tax refund. This excludes cases involving imported goods for export or exported goods without exportation conducted at the customs area following customs law provisions.
4. Taxpayers who pay VAT using the tax deduction method qualify for a value-added tax refund when undergoing changes in ownership, company transformation, mergers, consolidations, divisions, split-ups, dissolution, bankruptcy, or termination of operations, provided there is either an excess of paid VAT or unclaimed input VAT.
5. Foreigners or Vietnamese citizens residing abroad, holding passports or immigration documents issued by foreign authorities, are eligible for a VAT refund on goods purchased in Vietnam and transported with them upon departure.
6. Programs and projects funded through non-refundable official development assistance (ODA), non-refundable aid, or humanitarian aid: The program/project owner or the main contractor, as designated by the foreign donor, may request a refund of the VAT paid for goods and services procured in Vietnam for the program/project. Organizations in Vietnam using non-refundable aid or humanitarian aid funds from foreign organizations or individuals to acquire goods and services for non-refundable aid or humanitarian aid programs/projects in Vietnam are also eligible for a VAT refund on such goods and services.
7. Entities entitled to diplomatic privileges and immunities, as per the laws governing diplomatic privileges and immunities when procuring goods and services in Vietnam for use, are eligible for a refund of the VAT stated on the VAT invoice or payment document indicating the payment inclusive of VAT.

VALUE-ADDED TAX REFUND APPLICATION

In compliance with the law on value-added tax, in addition to the request for the reimbursement of state budget contributions using Form No. 01, the following specified documents are requisite when applying for VAT refunds:

A. Cases of VAT refunds pertaining to investment projects:

1. A copy of the Investment Registration Certificate, Investment Certificate, or Investment License, where the issuance of an Investment Registration Certificate is mandated;
2. For projects involving construction structures: A copy of the Land Use Right Certificate, Land Allocation Decision, or Land Lease Agreement conferred by the competent authority; construction permit;
3. A copy of the Charter Capital Contribution Documentation;
4. A copy of the business license applicable to conditional business lines and sectors; Certificate of eligibility for business and investment in conditional business and investment lines and sectors; Documents from the competent state authority permitting business and investment in conditional business and investment lines and sectors as stipulated by regulations;
5. A schedule of invoices and supporting documents for purchased goods and services using Form No. 01-1/HT;
6. Decision on the Establishment of the Project Management Unit, Decision on the Assignment of Investment Project Management by the investment project owner, Organizational and Operational Regulations of the investment project branch or Investment Project Management Unit.

B. Cases of VAT refunds pertaining to exported goods and services:

1. A schedule of invoices and supporting documents for purchased goods and services using Form No. 01-1/HT, issued with Appendix I to this Decree, except for taxpayers who have already submitted electronic invoices to the tax authority;
2. A list of cleared customs declarations using Form No. 01-2/HT, issued with Appendix I to this Decree for cleared exported goods in compliance with customs law provisions.

Tax refunds shall be made before inspections for taxpayers involved in producing exported goods, provided they have maintained compliance with tax and customs legislation for two consecutive years and those without exposure to high risks, as defined by the Tax Management Law.

C. Cases of VAT refunds for programs or projects funded through non-refundable official development assistance (ODA):

1. Cases where non-refundable ODA is directly managed and executed by the program or project owner;
2. Cases where non-refundable ODA is directly managed and executed by the sponsor.

D. Cases of VAT refunds for goods and services domestically purchased using non-refundable aid outside official development assistance:

1. A copy of the Decision approving program and project documents, and non-project aid, and program, project, non-project documents as stipulated by regulations;
2. A request for confirmation of eligible non-business capital expenditure and request for investment capital payment for investment expenditure by the project owner, as stipulated by regulations;
3. A schedule of invoices and supporting documents for purchased goods and services using Form No. 01-1/HT.

E. Cases of VAT refunds for goods and services domestically purchased using international emergency relief aid for disaster assistance and recovery efforts in Vietnam:

1. A copy of the Decision to receive emergency relief aid (in cases of international emergency relief aid) or the Decision on the policy to receive international emergency relief aid for disaster assistance and recovery efforts, accompanied by international emergency relief aid documents for disaster assistance and recovery efforts.
2. A schedule of invoices and supporting documents for purchased goods and services using Form No. 01-1/HT.

F. Cases of VAT refunds for diplomatic privileges and immunities:

1. A schedule of VAT on purchased goods and services for use by diplomatic missions, using Form No. 01-3a/HT, confirmed by the Directorate of State Protocol under the Ministry of Foreign Affairs, on the applicability of diplomatic privileges and immunities for tax refund eligibility;
2. A schedule of diplomatic personnel qualified for VAT refunds using Form No. 01-3b/HT.

G. Cases of VAT refunds for commercial banks acting as agents for VAT refunds to foreigners upon departure:

1. A schedule of supporting documents on VAT refunds for foreigners upon departure, using Form No. 01-4/HT;
2. Cases of VAT refunds pursuant to the decision of the competent authority, as stipulated by law: Decision from the competent authority.

In practice, the tax refund process entails numerous intricate provisions and procedures. Foremost, taxpayers must ensure the proper maintenance and presentation of all tax reports, accounting records, financial statements, relevant invoices and supporting documents encompassing the entire investment, establishment, and operation of their enterprises in strict adherence to regulations. Additionally, they should be ready to furnish information for the verification and substantiation of tax obligations.

Notably, it is critical to satisfy conditions for input value-added tax recognition and subsequent deduction or refund, including the existence of invoices for value-added tax on the purchase of goods or services or tax payment documents for value-added tax at the importation stage; availability of non-cash payment documents for purchased goods or services, except for individually purchased goods or services valued below twenty million Vietnamese Dong; execution of contracts with foreign entities regarding the sale or processing of goods and the provision of services; and maintenance of sales invoices for goods or services, non-cash payment documents, and customs declarations for exported goods.

Read more relevant content value-added tax refunds

• Cases and conditions for value-added tax refunds according to vietnam’s regulations
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