Circular No. 150/2013/TT-BTC guiding the establishment, management, and implementation of value-added tax refund fund

CIRCULAR

Guidelines on the establishment, management, and implementation of tax refunds from the Value Added Tax Refund Fund

from the Value Added Tax Refund Fund

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Based on the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006; the Law Amending and Supplementing Certain Provisions of the Law on Tax Administration No. 21/2012/QH12 dated November 20, 2012, and related guiding documents;

Based on the Law on Value Added Tax No. 13/2008/QH12 dated June 3, 2008; the Law Amending and Supplementing Certain Provisions of the Law on Value Added Tax No. 31/2013/QH13 dated June 19, 2013, and related guiding documents;

Based on the State Budget Law No. 01/2002/QH11 dated December 16, 2002, and related guiding documents;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Legal Department, the Director of the State Budget Department, the Director General of the General Department of Taxation, and the Director General of the National Treasury;

The Minister of Finance issues this Circular to provide guidelines on the establishment, management, and implementation of tax refunds from the Value Added Tax Refund Fund.

Section I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular stipulates the establishment, management of the Value Added Tax Refund Fund (hereinafter referred to as the Refund Fund) and the implementation of Value Added Tax refunds for eligible recipients as prescribed by law.

Article 2. Applicability

The General Department of Taxation, the State Budget Department, the National Treasury, the Provincial Tax Departments (hereinafter collectively referred to as the Tax Departments), and the Provincial National Treasury within their respective functions and duties assigned and as provided in this Circular shall be responsible for preparing budgets, managing, and implementing tax refunds from the Refund Fund for eligible recipients based on decisions made by competent authorities.

Article 3. Principles for Establishing and Managing the Refund Fund

The Refund Fund is established and formed from Value Added Tax revenues collected on imported goods. The Refund Fund shall open an account for centralized management at the National Treasury, with the Director General of the General Department of Taxation being the account holder by delegation of the Minister of Finance.

PART II

SPECIFIC PROVISIONS

Article 4. Budget for the Refund Fund

1. The budget for the Refund Fund (hereinafter referred to as the Refund Fund budget) is prepared together with the annual state budget according to the provisions of the State Budget Law and related guiding documents.

2. During the implementation process, if there is an excess of Value Added Tax refunds over the budget, the State Budget Department shall take the lead in coordinating with the General Department of Taxation to report to the Minister of Finance for consideration and resolution in accordance with the law.

Article 5. Management of the Budget for the Refund Fund

1. Based on the approved Refund Fund budget, the State Budget Department shall notify the General Department of Taxation to manage and monitor expenditures from the Refund Fund at the National Treasury.

2. Based on the approved Refund Fund budget, the estimated expenditure for Value Added Tax refunds, the previous quarter's and year's collection and refund of Value Added Tax in provinces and centrally-administered municipalities, the General Department of Taxation shall allocate and notify the annual limit for using the Refund Fund (divided by quarters) to the Tax Departments and provincial National Treasury agencies. Based on the previous quarter's and year's Value Added Tax refunds implemented by the General Department of Taxation, the General Department of Taxation shall determine and allocate the limit for using the Refund Fund to implement Value Added Tax refunds within its responsibilities; notify the National Treasury of the usage limits for the Tax Departments and the General Department of Taxation.

The allocation and notification of the usage limit for the Refund Fund as stipulated above shall be carried out concurrently with the assignment of the annual revenue budget.

3. Monthly, quarterly, semi-annually, and annually, the Tax Departments shall coordinate with the National Treasury at the same level to compile and report on the implementation of the usage limit for the Refund Fund and the results of Value Added Tax refund expenditures to the General Department of Taxation for consolidation and reporting to the Minister of Finance, who will forward them to relevant units for coordinated management.

The General Department of Taxation shall be responsible for guiding the Reporting Form; the time for reporting on the implementation of the usage limit for the Refund Fund and the results of Value Added Tax refund expenditures.

Article 6. Implementation of Tax Refunds

1. The examination and decision on tax refunds shall be carried out in accordance with the Value Added Tax Law, the Tax Administration Law, and guiding documents for their implementation.

2. During the implementation process, the tax authority must control and reconcile tax refunds within the scope of the allocated Tax Refund Fund limit. In cases where the amount of tax refund exceeds the limit assigned to the locality, the Provincial Tax Department shall have the responsibility to report to the General Department of Taxation for review and resolution.

3. The General Department of Taxation shall take the lead and coordinate with the State Budget Department to pre-finance the Tax Refund Fund usage limit for the next quarter for tax authorities that are short of the limit. If the shortage occurs in the last quarter of the year, the adjustment of limits from surplus to deficit areas shall be made. In cases where the approved budget for the Tax Refund Fund is insufficient to cover VAT refunds, it shall be implemented according to the provisions of Clause 2, Article 4 of this Circular.

Article 7. Contents of Expenditure from the Tax Refund Fund

The Tax Refund Fund shall be used to refund VAT to taxpayers who are entitled to VAT refunds under the Value Added Tax Law and implementing guidelines.

In cases where taxpayers are refunded excess VAT paid according to Clause 13, Article 1 of the Law Amending and Supplementing Certain Provisions of the Tax Administration Law, the central government budget and local government budget shall be correspondingly reduced according to the previous revenue-sharing ratio without using funds from the Tax Refund Fund.

Article 8. Procedures for Implementing Tax Refunds

1. In cases where the tax refund is implemented by the General Department of Taxation

Upon receipt of the Decision on VAT Refund or the Decision on VAT Refund and Offset of State Budget Revenue sent by the General Department of Taxation along with the accompanying documents as stipulated in Clause 2, Article 9 of this Circular, the State Treasury shall be responsible for receiving the documents, conducting expenditure control, and processing the VAT refund for the recipient within the announced Tax Refund Fund usage limit.

2. In cases where the tax refund is implemented by the Provincial Tax Department

Upon receipt of the Decision on VAT Refund or the Decision on VAT Refund and Offset of State Budget Revenue and accompanying documents as stipulated in Clause 2, Article 9 of this Circular sent by the Provincial Tax Department, the Provincial State Treasury shall be responsible for receiving the documents, conducting expenditure control, and processing the VAT refund for the recipient within the announced Tax Refund Fund usage limit.

3. In cases where the refund amount exceeds the limit, the State Treasury shall notify the corresponding tax authority to implement according to the provisions of Clauses 2 and 3 of Article 6 of this Circular.

4. By no later than the 15th day of each month, quarter, half-year, or year, the Provincial State Treasury shall be responsible for compiling the situation of VAT refund expenditures at the local level and submitting them to the Provincial Tax Department for consolidation and reporting to the General Department of Taxation as stipulated in Clause 3, Article 5 of this Circular; simultaneously sending to the State Treasury for monitoring and reconciliation.

Article 9. Control of VAT Refund Disbursements at State Treasury Agencies

1. The State Treasury Agency receiving the Decision on VAT Refund and accompanying documents shall be responsible for:

a) Checking the completeness and compliance with legal provisions (such as authority to decide; validity) of the documents requesting the State Treasury Agency to disburse the VAT refund;

b) Comparing the refund amount with the allocated VAT Refund Fund limit, controlling the implementation of VAT refunds by tax authorities;

c) Implementing VAT refunds within the announced limit by the tax authority.

2. Documents requesting the State Treasury Agency to disburse VAT refunds (collectively referred to as documents) include:

a) Decision on VAT Refund or Decision on VAT Refund and Offset of State Budget Revenue;

b) Order to return state budget revenue;

c) Tax authority's notification document on VAT refund scope (if any);

d) Other relevant documents related to VAT refunds.

3. Process of Controlling VAT Refund Disbursements

The State Treasury Agency bases on the VAT Refund Decision and accompanying documents sent by the tax authority to classify and control as follows:

a) For cases where refunds are made before inspection:

- If, upon inspection, it is determined that the documents are complete and comply with legal provisions, the State Treasury Agency will implement VAT refunds for the beneficiaries within the announced limit by the tax authority.

- If, upon inspection, it is determined that the documents are incomplete, the State Treasury Agency must request the tax authority to provide additional documents.

- If, upon inspection, signs of non-compliance with legal provisions are discovered, the State Treasury Agency will suspend the refund process, while notifying the tax authority to transfer the documents to the pre-inspection, post-refund category and rectify any violations (if any).

b) For cases where inspections are conducted before refunds:

- If, upon inspection, it is determined that the documents are complete and comply with legal provisions, the State Treasury Agency will implement VAT refunds for the beneficiaries within the announced limit by the tax authority.

- If, upon inspection, it is determined that the documents are incomplete, the State Treasury Agency must request the tax authority to provide additional documents.

- If, upon inspection, signs of non-compliance with legal provisions are discovered, the State Treasury Agency will suspend the refund process, while notifying the tax authority to continue inspecting and clarifying and rectifying any consequences of violations (if any).

4. The State Treasury Agency monitors the implementation of VAT refund disbursements within the announced limit. In cases where the tax authority's request for VAT refund disbursement exceeds the limit, the State Treasury Agency will suspend payment, while notifying the same-level tax authority to promptly address the issue.

5. Monthly or quarterly, annually, the State Treasury Agency collaborates with the tax authority to conduct inspections and comparisons of documents and limits to identify instances of incorrect decisions on VAT refunds and disbursements, and to monitor the implementation of limits to promptly rectify any issues.

Article 10. Responsibilities of the General Department of Taxation

1. Cooperate with the State Budget Department to draft and submit to the Minister of Finance for approval the budget estimate for the VAT Refund Fund; supplement funds for the VAT Refund Fund according to Clause 2, Article 4 of this Circular.

2. Guide provincial tax offices in preparing projected VAT refund expenditures.

3. Allocate and announce the annual usage limit of the VAT Refund Fund to provincial tax offices and for VAT refund tasks under the responsibility of the General Department of Taxation.

4. Decide on advance allocation of the VAT Refund Fund limit within a provincial tax office, and adjust the limit between provincial tax offices when the annual refund expenditure exceeds the limit.

5. Monitor the usage of refund limits and the implementation of VAT refund expenditures in localities.

6. Collaborate with the State Treasury Agency during the process of controlling VAT refund disbursements and conducting periodic inspections and document comparisons at tax offices.

7. Monthly, quarterly, semi-annually, and annually, compile reports on the implementation of the VAT Refund Fund usage limit and results of VAT refund expenditures (with confirmation from the State Treasury Agency) to report to the Ministry of Finance, and send copies to the State Budget Department.

8. Compile evaluations of the implementation of the budget for the VAT Refund Fund and settle accounts with the state budget.

Article 11. Responsibilities of the State Treasury

1. Open a tax refund fund account in accordance with Article 3 of this Circular.

2. Monitor and control VAT refund expenditures in accordance with this Circular.

3. Implement VAT refunds for eligible recipients in accordance with the prescribed regulations.

4. Coordinate with tax authorities to conduct periodic inspections and verify documentation.

5. Confirm the amount of VAT actually refunded to eligible recipients in each province and city.

Article 12. Responsibilities of the National Budget Department

1. Coordinate with the General Department of Taxation to prepare the budget estimate for the tax refund fund, to be incorporated into the state budget annually.

2. Coordinate with the General Department of Taxation to manage the approved budget estimate for the tax refund fund; in cases where the budget estimate is insufficient, coordinate with the General Department of Taxation to submit to the Minister of Finance for consideration and resolution in accordance with the law.

Section III

IMPLEMENTATION

Article 13. Effective Date

1. This Circular takes effect from January 1, 2014.

2. Repeal Decision No. 1632/1998/QD-BTC dated November 17, 1998 on the issuance of the Regulation on the establishment, management, and use of the VAT refund fund and Decision No. 96/2002/QD-BTC dated June 18, 2002 on amending and supplementing certain points in the Regulation on the establishment, management, and use of the VAT refund fund issued according to Decision No. 1632/1998/QD-BTC dated November 17, 1998 of the Minister of Finance.

1. The Minister, Heads of Ministries equivalent to ministries, Heads of government agencies, Chairmen of provincial People's Committees under the central government, and related agencies, units, and individuals are responsible for implementing this Circular.

Heads of tax agencies, the State Treasury, the National Budget Department, and related organizations and individuals are responsible for guiding and implementing the contents of this Circular.

During the implementation process, if there are difficulties, organizations and individuals are requested to promptly reflect to the Ministry of Finance for research and resolution./.