Amending some regulations on VAT refund

The new government decree clearly stipulates some cases where export enterprises are eligible for tax refunds and others where they are not.

The Government has just issued Decree No. 146/2017/ND-CP amending and supplementing a number of articles of Decree No. 100/2016/ND-CP dated July 1, 2016 and Decree No. 12/2015/ND-CP dated February 12, 2015.

Specifically, business establishments that have exported goods and services in a month (for monthly declaration) or quarter (for quarterly declaration) are eligible for tax refunds, including the following cases.

Imported goods are then exported to duty-free zones. In addition, imported goods are then exported abroad, with an input VAT amount of 300 million VND or more that has not been deducted, and are eligible for monthly or quarterly VAT refunds.

Tax refund also applies in cases where the input VAT amount not yet deducted in a month or quarter is less than 300 million VND, it will be deducted in the following month or quarter.

New decree regulates tax refunds for export enterprises.

Enterprises are also entitled to VAT refunds in cases where they have both exported goods and services and domestically consumed goods and services. If, after offsetting against the tax payable, the remaining undeducted input VAT on exported goods and services is 300 million VND or more, the business is entitled to a tax refund.

Business establishments must separately account for input VAT used for the production and trading of exported goods and services. In cases where separate accounting is not possible, the input VAT amount shall be determined based on the ratio between the revenue of exported goods and services and the total revenue of goods and services of VAT declaration periods calculated from the tax declaration period following the previous tax refund period to the current tax refund request period.

The new Decree also stipulates that business establishments are not entitled to VAT refunds in the following cases: Imported goods are then exported, but the exported goods are not exported at the customs operation area according to the provisions of the law on customs. In addition, exported goods are not exported at the customs operation area according to the provisions of the law on customs.

Tax authorities shall carry out pre-refund and post-inspection for taxpayers producing export goods who have not been prosecuted for smuggling, illegal cross-border transportation of goods, tax evasion, tax fraud, or commercial fraud for two consecutive years. Taxpayers are not high-risk subjects according to the provisions of the Law on Tax Administration and its implementing guidelines.