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VALUE-ADDED TAX REFUNDS IN VIETNAM


Below is the procedures for refundable VAT on exported goods/services in Vietnam

1. Objects eligible for VAT refund for exported goods and services in Vietnam

According to the provisions of Article 18 of Circular 219/2013/TT-BTC, the recipient of refund in some cases:

§ If the export is entrusted, the business establishment having the goods exported under entrustment is the recipient of refund;

§ If processed goods is forwarded, the business establishment that signs the export processing contract with the foreign party is the recipient of refund;

§ If goods are export to execute an overseas construction, the exporter is the recipient of refund;

§ The establishment that has the domestic exports is the recipient of refund.

2. Cases of refundable VAT and input VAT for exported goods/services in Vietnam

Case of refundable VAT on exported goods/services

According to Point b, Clause 12, Article 1 of Circular 26/2015/TT-BTC amending Clause 4, Article 18 of Circular 219/2013/TT-BTC, case of refundable VAT on exported goods/services include:

- In the month (if tax is declared monthly) or in the quarter (if tax is declared quarterly), if input VAT on exported goods and services that remains after deduction is 300 million VND or above, such input VAT shall be refunded by month or by quarter;

If the aforementioned input VAT in the month or quarter is below 300 million VND, it shall be offset against tax incurred in the next month or quarter.

Where a taxpayer both exports and domestically sells goods/services in the month/quarter, such taxpayer may receive a refund of VAT on exported goods/services if the input VAT that remains after being offset against VAT on goods/services sold domestically is 300 million VND or above.

Refundable VAT on exported goods/services

Refundable VAT on exported goods/services is calculated as follows:

Input VAT that remains after deduction in the tax period

+

Output VAT on goods and services sold domestically

_

Total input VAT deducted in the tax period (including input VAT on goods and services serving export and domestic business incurred in the tax period and the input VAT transferred from the previous tax period.


Input VAT on exported goods/services

+

Input VAT that remains after deduction in the tax period

x

Total revenue from export in the tax period


Total revenue from sale of taxable goods/services, revenue exempt from tax declaration (including revenue from export) in the tax period

x100%

If input VAT on exported goods/services that remains after deduction is below 300 million VND, the taxpayer must transfer it to the next tax period instead of claiming a refund.

If input VAT on exported goods/services that remains after deduction is 300 million VND or above, the taxpayer may claim a refund.

3. Application for refundable VAT on exported goods/services

According to Article 16 of Circular 219/2013/TT-BTC (amended by Circular 119/2014/TT-BTC), VAT refund dossiers for exported goods and services must contain the following documents:

(1) Request for refund of state budget revenues, made according to Form No. 01/HT

Form No. 01/HT:

(2) Foreign trade contract

- The contract to sell, process goods, or provide services for foreign organizations and individuals.

- If the exported is entrusted, the compulsory documents are the entrustment contract and the note of entrustment contract finalization or a debt comparison note between the entrusting party and the entrusted party.

(3) The approved customs declaration made according to Form No. 01-2/HT

Form No. 01-2/HT:

- For exported goods, customs procedures have been completed according to the guidance of the Ministry of Finance on customs procedures; customs inspection and supervision; export tax, import tax, and tax administration for imported and exported goods.

- For business establishments that export software products in the form of documents, records, and hard-packed databases in order to receive input VAT credit or refund, business establishments must ensure the following procedures: about the customs declaration for ordinary goods.

- The customs declaration is not needed in the following cases:

+ The software and export exported via electronic means. The taxpayer must follow the procedure for certifying that the buyer has received the exported services or software via electronic means in accordance with the laws on electronic commerce.

+ The construction or installation executed overseas or in free trade zones.

+ Supply of electricity, water, stationery, and goods serving every day life of export processing company, including food and consumables (including personal protective equipment).

(4) Proof of payment via bank

§ Is a document of payment through the bank of the importing party.

§ In case of late payment, there must be an agreement stated in the export contract. By the deadline for payment, the business establishment must have a bank payment voucher.

§ In case of entrustment for export, there must be proof of payment via bank of the foreign side to the entrusting party and the entrusting party must pay the amount of exported goods through the bank to the entrusting party.

§ In case the foreign party makes direct payment to the export entrusting party, the entrusting party must have a bank payment document and the above payment must be specified in the contract.

(5) Commercial invoice.

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