Delayed VAT refund for cassava starch exporting enterprises, what does the Tax Department say?

Processing cassava starch in Anh Son district. Photo: Van Truong

Business in trouble

Mr. Vo Thanh Tung - Director of Trung Hung Development Investment Joint Stock Company - Vinh City said: The unit specializes in purchasingtapioca starchin Nghe An, Quang Binh, Ha Tinh provinces, then exported to the Chinese market.

On July 14, 2022, the Company sent to the Nghe An Provincial Tax Department Official Dispatch No. 25/CV-TH regarding the processing of tax refund dossiers for the November 2020 tax refund period and the tax refund period from December 2020 to March 2021.

On August 24, 2022, Nghe An Provincial Tax Department issued Official Dispatch No. 5176 in response to the processing of tax refund dossiers. The Official Dispatch clearly stated: "The amount of tax that is not eligible for refund in Conclusion No. 7783/CT-TTKT2 dated December 22, 2021 of the Inspection Team under Decision No. 13/QD-CT dated January 5, 2021 is 18 billion VND and is still awaiting verification by the Public Security agency under the direction of the General Department of Taxation in Official Dispatch No. 2413/TCT-TTKT dated July 7, 2022 and Official Dispatch No. 607/CSKT dated July 16, 2022 of the Economic Police Department of Nghe An Public Security.

After receiving the results and verification opinions from the police, Nghe An Provincial Tax Department will continue to process tax refunds in accordance with regulations."

The company's delayed VAT refund since November/December 2020 has caused Trung Hung Development Investment Joint Stock Company to face many difficulties. The company has no operating capital and must mobilize capital to compensate for the unrefunded VAT, resulting in interest expenses. In addition, the company is also suffering losses due to exchange rate differences.

A representative of Viet An Investment Group Joint Stock Company - a company specializing in exporting cassava starch in Vinh City said: The value-added tax refund policy is a policy of great significance for farmers in particular and the agricultural sector in general. However, recently, the unit has been stuck with procedures for value-added tax (VAT) refunds for cassava starch products, currently the amount of late tax refunds from 2019 - 2020 is over 20 billion VND.

The investigation agency has confirmed that our unit has no signs of violating the law. Currently, the unit's procedural records are complete, with a sales contract and full warehouse receipts. But the tax authority has not yet allowedVAT refundthis product number

Transporting cassava starch at Nghia Dan cassava starch processing factory. Photo: Van Truong

Mr. Nguyen Viet Hung - Director of Asia Hoa Son Joint Stock Company, a unit specializing in the production and processing of cassava starch, dried cassava pulp and liquid sugar in Anh Son district, also said: The unit's cassava starch products are mainly exported to China. Of which, 70% are exported through border trade.

Every year, the unit purchases over 120,000 tons of raw cassava tubers for people. Currently, the company does not have any outstanding VAT refunds. However, if customers who purchase cassava starch from the company cannot export, we will also face indirect difficulties because we cannot sell the products.

In progressfocus on verification

According to a report by the Nghe An Tax Department, the tax authority recently found some suspicious signs in the VAT refund dossiers of some enterprises exporting cassava starch to China that did not meet the conditions for VAT refund.

According to verification from foreign tax authorities, through the coordination mechanism between tax authorities, it has been discovered that some enterprises importing cassava starch in China no longer exist or have fled or disappeared for a long time. Payment documents via banks do not have the correct name of the buyer, transfers via border banks do not comply with regulations on payment conditions for tax refunds...

In order to ensure that VAT refund management is in accordance with legal regulations and avoid loss of state budget, in early March 2022, the General Department of Taxation issued a document directing tax departments to inspect, review and compare businesses in the area that have declared transactions with businesses and organizations listed in verification documents from Chinese tax authorities to immediately implement professional measures.

Purchasing cassava raw materials. Photo: Document

However, in Nghe An, there are currently a number of units specializing in exporting cassava starch to China, all of which confirm that their documents and procedures are complete, but up to now, there are stilllate tax refundResponding to this issue, Mr. Nguyen Dinh Duc - Director of Nghe An Tax Department said: Nghe An Tax Department always creates favorable conditions for enterprises exporting cassava starch, however, there are still common problems nationwide regarding tax refunds.

The tax authority is coordinating with relevant authorities and investigation agencies to verify and clarify some additional contents as requested by the General Department of Taxation of Vietnam. Such as clarifying the origin of goods, transportation, etc. Enterprises need to share with tax authorities about the implementation of legal regulations. After the verification results are correct and the enterprise is eligible for a refund, the tax authority will refund in accordance with regulations./.