Vietnam’s Value-Added Tax (VAT) system plays a crucial role in business operations, especially for foreign investors, exporters, and domestic enterprises. While businesses are accustomed to paying VAT on goods and services, understanding the VAT refund process is equally important to maximize financial efficiency and ensure compliance with local tax laws.

This comprehensive guide outlines essential details on VAT refunds in Vietnam, eligibility criteria, documentation requirements, and strategies to streamline the refund process.

1. Understanding VAT in Vietnam

Value-Added Tax (VAT) is an indirect tax applied to the sale of goods and services in Vietnam. It is levied at various stages of the supply chain, with the ultimate burden resting on the end consumer. Businesses collect VAT from customers and remit it to the tax authorities.

VAT Rates in Vietnam

• 10% (Standard Rate): Applies to most goods and services.
• 5% (Reduced Rate): Applied to essential goods such as healthcare, education, and clean water.
• 0% (Export Rate): Applied to exported goods and services, international transportation, and services provided to foreign entities.

2. What is a VAT Refund?

A VAT refund is a mechanism that allows businesses to reclaim excess input VAT paid during the purchase of goods or services. This commonly applies when a company’s input VAT exceeds its output VAT.

Who Qualifies for a VAT Refund?

Businesses may be eligible for a VAT refund if they meet one of the following conditions: ✅ Exporters: Businesses with exported goods/services where the input VAT exceeds the output VAT. ✅ Newly Established Businesses: Companies investing in fixed assets or incurring high input costs before generating sales. ✅ Projects in the Investment Phase: Large-scale investment projects may qualify for VAT refunds before revenue generation. ✅ Businesses with Zero-Rated Sales: Companies providing services or selling goods subject to 0% VAT. ✅ Foreign Individuals and Organizations: Eligible for refunds on VAT paid for goods purchased in Vietnam before exiting the country.

3. Key Conditions for VAT Refund Eligibility

To qualify for a VAT refund in Vietnam, businesses must meet the following conditions:

✅ VAT Registration: The business must be registered for VAT and have a valid tax code.
✅ Proper Invoicing: All transactions must be supported by compliant VAT invoices.
✅ Electronic Invoicing Compliance: VAT invoices must be issued via the government’s e-invoicing system.
✅ Accurate Financial Records: Businesses must maintain proper accounting records, including detailed input and output VAT records.
✅ Minimum Refund Threshold: The refundable VAT amount must exceed 300 million VND (approximately $12,000) for a quarterly claim.

4. Common Scenarios for VAT Refunds

A. VAT Refund for Exporters

Export businesses commonly qualify for VAT refunds when:

• Input VAT on purchased materials, services, and production costs exceeds the output VAT collected from export sales.
• Businesses must provide export invoices, customs declarations, and bank payment receipts.

B. VAT Refund for New Businesses (Investment Phase)

• Newly established companies investing in machinery, equipment, and infrastructure before generating revenue may qualify for a VAT refund.
• Documentation such as invoices for fixed asset purchases and proof of investment capital is required.

C. VAT Refund for Foreign Travelers

Foreign tourists departing from international airports in Vietnam may request a VAT refund on eligible purchases. The following conditions apply:

• Items must be purchased at designated VAT refund shops.
• Each invoice must have a minimum value of 2 million VND (approximately $85).
• Refunds are processed at designated VAT refund counters at major airports.

5. Step-by-Step Process for Claiming a VAT Refund

Step 1: Prepare Required Documentation

Gather essential documents, including:

• VAT invoices
• Customs declarations (for export-related refunds)
• Payment receipts via bank transfer
• Investment registration certificate (for new businesses in the investment phase)
• Supporting accounting records and tax filings

Step 2: Submit a VAT Refund Application

• Log in to the General Department of Taxation (GDT) e-portal.
• Complete and submit Form 01/GTGT (VAT Refund Form).
• Attach scanned copies of required documents.

Step 3: Tax Authority Review

• The tax authority will conduct a comprehensive review to verify the accuracy and completeness of submitted documents.
• For refund requests exceeding 300 million VND, a physical inspection of accounting records may be required.

Step 4: Refund Approval

• Upon approval, the tax authority will issue a VAT refund decision.
• Refunds are typically processed within 40 business days for complex cases and 15 business days for straightforward claims.

6. Common Reasons for VAT Refund Delays or Rejections

Understanding potential issues can help businesses avoid refund delays or rejections. Common issues include:

❌ Incomplete Documentation: Missing invoices, payment receipts, or customs declarations.
❌ Non-Compliant VAT Invoices: Invoices that fail to meet Vietnam’s e-invoicing standards.
❌ Inadequate Record Keeping: Failure to maintain proper accounting records.
❌ Late Submission: VAT refund claims must be filed within 6 months from the end of the relevant tax period.

✅ Solution: Establish a clear internal accounting process and engage a professional tax consultant to ensure proper documentation and accurate filings.

7. Tips for Streamlining the VAT Refund Process

✅ Maintain Organized Records: Digitize and archive all VAT invoices, receipts, and customs declarations.
✅ Use E-Invoicing Software: Automate invoice creation and ensure compliance with Vietnamese regulations.
✅ Track Deadlines: Mark key tax deadlines to avoid late submissions.
✅ Seek Professional Assistance: Partner with tax experts for guidance on complex refund cases or investment phase claims.

8. How Green NRJ Can Help You

At Green NRJ, we specialize in helping businesses efficiently manage VAT refund applications. Our services include:

✅ Document Preparation & Submission
✅ Compliance Check for Invoices and Tax Records
✅ Coordination with Tax Authorities
✅ Advisory on Maximizing VAT Refunds for Exporters and New Businesses

Our experienced team ensures you recover VAT quickly while minimizing compliance risks.

9. Conclusion

Successfully claiming a VAT refund in Vietnam requires understanding eligibility criteria, maintaining accurate records, and following the correct application process. By implementing effective strategies and seeking professional guidance, businesses can maximize their refunds and improve cash flow.

For expert support with VAT refunds in Vietnam, contact Green NRJ today for personalized assistance and seamless tax management.

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