Removing obstacles in value added tax refund

There are still businesses that have not received tax refunds.

Implementing the direction of the Government, the Prime Minister, and the Minister of Finance on accelerating the settlement of value-added tax (VAT) refund dossiers, in recent times, Nghe An Tax Department has coordinated with other sectors to accelerate the progress of tax refund settlement; strengthen control of VAT refund work to ensure strict tax refunds in accordance with the provisions of law. From January 1 to November 8, 2023, Nghe An Provincial Tax Department has received 110 tax refund dossiers with an amount of VND 573 billion; currently, 110 dossiers have been refunded with an amount of VND 544 billion.

However, Nghe An currently has 2 units that have not received tax refunds from last year. Specifically, Trung Hung Development Investment Joint Stock Company in Vinh City, specializes in purchasing cassava starch, then exporting it to the Chinese market. The tax refund period is from November, December 2020 to March 2021 with an amount of 18 billion VND, but from that time until now, this company has not received a tax refund.

Previously, on August 24, 2022, the Nghe An Provincial Tax Department explained that the reason why this company had not received a tax refund was because: "The tax amount 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, which is still pending verification by the Police 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".

A representative of Trung Hung Investment and Development Joint Stock Company said that the Company has sent a petition to the Nghe An Tax Department with the following content: "After the investigation agency confirmed that our unit has no signs of violating the law, currently the unit's procedural records are complete, there is a sales contract, and full warehouse receipts, but the tax has not been refunded yet."

Another company that has not received a tax refund is Thanh Thanh Dat Company Limited in Vinh City, a unit specializing in trading MDF industrial wood products and wood chips in 10 provinces and cities across the country, exporting a large amount of these products every year. From 2021 to now, the amount of late VAT refund of this company is 120 billion VND at 10 tax departments across the country, including Nghe An Tax Department.

Because it is beyond the local level, the company's tax refund dossier is currently being assessed. Faced with the above difficulties, Thanh Thanh Dat Company Limited has submitted a joint petition with the Vietnam Timber and Forest Products Association regarding the difficulties in resolving export VAT refund dossiers for wood and wood products, but this unit is still waiting...

Many problems and shortcomings

VAT refund work has been facing difficulties, arising certain problems and shortcomings. Specifically, some regulations are not unified and clear; invoice verification and coordination in verifying invoices in practice still have many shortcomings, low efficiency, leading to tax refund time being extended in many cases. This has partly affected the financial resources of enterprises.

Besides, there are still shortcomings in tracing and verifying the origin of products, for example, enterprises exporting cassava starch and wood chips in Nghe An, according to regulations, must verify to the cassava growing households or forest planting households in each hamlet and village.

Meanwhile, Nghe An is a large area, an export shipment of a business is purchased from many forest growers in many different localities, so it is somewhat impossible to verify as prescribed. In some cases, companies located in Nghe An buy goods and raw materials in other provinces and cities, the tax authority must create a verification form to ask the Tax Departments in other provinces to verify, these Tax Departments then direct the local tax branches under their authority to continue verifying, causing delays, the verification procedure is very manual!

In cases where there are signs of suspected violations, the authorities must be involved. In order to effectively carry out tax refund work, in recent times, Nghe An authorities have been implementing solutions such as: Strictly controlling signs of tax evasion, value-added tax refund fraud, coordinating with tax management authorities, especially customs and market management agencies to verify the origin of goods, grasp and exchange information on fraudulent tricks for exported and imported goods with signs of tax evasion..., ensuring tax refunds are made to the right subjects, in accordance with the policies and laws of the State.

Mr. Nguyen Dinh Duc - Director of Nghe An Tax Department said: Recently, tax authorities nationwide have discovered some suspicious signs in VAT refund dossiers of some enterprises exporting cassava starch to China such as enterprises that are no longer operating or have disappeared; payment documents via banks do not have the correct name of the buyer; cross-border bank transfers do not comply with regulations on payment conditions for tax refunds...

For the above 2 units, the tax authority has coordinated with relevant agencies to verify and clarify some contents as requested by the General Department of Taxation of Vietnam regarding the origin of goods, transportation, etc. According to the procedure, the tax sector is currently continuing to coordinate to determine whether the business's sales contract is invalid or not.

Recently, the National Assembly Standing Committee's monitoring delegation worked with many tax departments across the country and businesses. The results showed that: VAT refund settlement in 2022 and especially in the first 6 months of 2023 was slower than in previous years, with the number of refund cases settled reaching 79%.

Specifically, while the number of pre-inspection records increased compared to previous years (25%), the number of pending records - being processed and not yet refunded was 1,839 records, accounting for 17%. Industries with delayed tax refunds include: wood and wood products industry, the rate of resolved refund records is 85%; cassava starch industry is 45%; rubber industry is 62%; electrical and electronic components industry is 59% (lower than the normal level of over 90%). Notably, the amount of money collected after inspection only accounts for an insignificant small percentage...

The Ministry of Finance said: By the end of October 31, 2023, the tax authority had issued 15,025 decisions corresponding to the refunded tax of VND 112,873 billion, equal to 70.5% of the estimated implementation reported to the National Assembly (VND 160,000 billion), equal to 91% of the same period in 2022.

Specifically: Refunds for exports are 13,606 decisions with a total refund amount of VND 93,546 billion, accounting for 82.9% of the total refunded amount, equal to 84% compared to the same period in 2022; Refunds for investment projects are 761 decisions with a total refund amount of VND 18,875 billion, accounting for 16.7% of the total refunded amount, equal to 154% compared to the same period in 2022; Refunds for other cases such as dissolution, termination of operations, ODA projects, diplomatic immunity... are 658 decisions with a total refund amount of VND 452 billion.

The General Department of Taxation also conducted post-refund inspections and audits of 5,535 files, with the amount of tax discovered and recovered for refund being VND 190.6 billion, and administrative penalties being VND 64.7 billion. The amount of Value Added Tax (VAT) refunds paid to the state budget as of October 31, 2023 was VND 915 billion.

The National Assembly's Finance and Budget Committee is proposing that the Government direct the Ministry of Finance to study and complete related documents, especially the proposed amendments to the Law on Tax Administration and the Law on Value Added Tax, focusing on directing that before December 31, 2023, the remaining refund requests of a number of export industries that are facing difficulties must be resolved and handled...