Clarifying VAT Refund Criteria

GDT said many local taxation bureaus encountered obstacles in VAT refunds to businesses. Therefore, to support local tax agencies to carry out and manage VAT refunds, GDT proposed five criteria for determining prioritised tax refunds. Firstly, businesses directly manufacture exports or outsource exports (including computer software, built in export processing zones) with export revenue accounting for over 50 percent of total VAT-incurred revenue of the preceding year or current year. Secondly, criteria for determining key national projects will be based on the Law on Investment of 2014, Resolutions of the National Assembly and Decrees of the Government on key national projects. Thirdly, criteria for determining new important local investment projects are introduced by the Provincial/Municipal People’s Committees.

 

GDT proposed supplementing two more criteria for determining prioritised tax refunds: one, tax refund for those enjoying diplomatic immunity; and two, tax refund for foreigners buying duty-free goods before exiting. After refunding prioritised entities, if there is taxes in surplus, tax authorities will refund foreign contractors at the time of carrying out dissolution procedures; bankrupt companies undergoing complete inspection by tax authorities and State agencies; non-refundable ODA and humanitarian aid projects serving State-approved national target programmes; and commercial exporting companies operating at border gates/seaports exporting key local products.