VAT Refund for Foreigners: Promoting Tourism and Exporting Goods

The Prime Minister decided to make a pilot implementation of VAT refunds for foreigners purchasing goods in Vietnam when they leave the country via Noi Bai or Tan Son Nhat international airports, which helps raise purchasing opportunity for foreigners in the Vietnam market.

 

Based on the regulation, VAT refunds are available to foreigners and Vietnamese residents abroad who have passports or immigration documents issued by foreign authorities, except flight crew members in accordance with the Aviation Law. Pilot implementation is applied only at Noi Bai and Tan Son Nhat international airports in the period from 1July 2012 to 30June 2014.

 

VAT refunded goods must meet conditions, accordingly they must be subject to VAT, unused and approved to be brought into planes under regulations of aviation securities and insurance, and not listed in the banned or limited export goods, with receipt and refund tax declaration issued within 30 days from the date of departure, value of goods indicated in receipt and tax refund declaration bought in the same place and same day (including cumulative purchased goods in the same day and same shop) must be at least VND two million.

 

The amount of VAT refund for foreigners is 85 percent of total amount of VAT on goods eligible for reimbursement, brought by foreigners when leaving Vietnam at the two international airports. Reimbursement currency is VND. To receive reimbursement in any other currency, the amount will be exchanged in commercial banks in accordance with the law.

 

 Agencies responsible for implementation are the Customs Department in Noi Bai and Tan Son Nhat international airports. Each airport has two counters to check receipts and VAT refund declarations - one outside the security area and the other inside the security area. The implementation unit is commercial banks authorised by the Ministry of Finance (BIDV and Vietinbank at Tan Son Nhat international airport, and Vietcombank and Maritime Bank at Noi Bai international airport). Each airport has two VAT refund counters of the two commercial banks in the security area.

 

According to Mr Hoang Viet Cuong, deputy Director of General Customs Department, the pilot implementation of VAT refund for foreigners when leaving Vietnam is suitable with international regulations and conditions of Vietnam. The VAT refund for foreigners will motivate increased purchasing by foreigners, developing tourism and goods export, introducing Vietnamese culture and fulfilling VAT policies.

 

Additionally, Mr Cuong also noted that the coordination between state authorities in implementing VAT refunds at Noi Bai and Tay Son Nhat international airports for foreigners will build up practical experience also useful for export and import activities in the future.

 

Answering the question of whether reimbursing VAT in VND may cause difficulty for departing foreigners, Mr Pham Quang Dung, deputy general director of Vietcombank stated that currency exchange will follow the currencies management regulation of the State Bank of Vietnam. Vietcombank also programmed software to ensure convenience for foreigners wishing to exchange their refund to any currency allowed by the Foreign Currency Management Department without losing more time.

 

Reportedly, after the pilot period, the Ministry of Finance will consider expanding the subjects, as well as the scope of application at air, sea and road international border points.