Decision No. 1632/1998/QD-BTC On the issuance of regulations on the establishment, management, and use of the value-added tax refund fund

Pursuant to …;

Regarding the issuance of regulations on the establishment, management, and use

of the value-added tax refund fund

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THE MINISTER OF FINANCE

Pursuant to the Law on Value Added Tax, Government Decree No. 28/1998/NĐ-CP dated May 11, 1998 detailing the implementation of the Law on Value Added Tax;

Pursuant to the Government's Decree No. 178/CP dated October 28, 1994 on tasks, powers, and organizational structure of the Ministry of Finance;

To unify the budget management regarding the collection and refund of value-added tax; At the proposal of the Director General of the General Department of Taxation, the Director General of the State Treasury, and the Director of the Budget Department of the Ministry of Finance;

DECISION:

Article 1: The regulations on the establishment, management, and use of the value-added tax refund fund are hereby promulgated together with this Decision.

Article 2: This Decision shall take effect from January 1, 1999.

Article 3: The Director General of the General Department of Taxation, the Director General of the State Treasury, the Director of the Budget Department of the Ministry of Finance, and the Head of the Office of the Ministry of Finance are responsible for organizing the guidance for the implementation of this Decision.

REGULATIONS

Establishment, management, and use of the value-added tax refund fund

(Issued together with Decision No. 1632/1998/QĐ-BTC dated November 17, 1998)

of the Minister of Finance)

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Chapter 1:

GENERAL PROVISIONS

Article 1: Establish a centralized value-added tax refund fund at the Central State Treasury to implement the refund of value-added tax for the subjects specified in Article 16 of the Law on Value Added Tax; Article 15 of Government Decree No. 28/1998/NĐ-CP dated May 11, 1998, and the guiding documents of the Ministry of Finance.

The value-added tax refund fund shall open an account at the Central State Treasury authorized by the Minister of Finance to the Director General of the General Department of Taxation as the account holder.

Article 2: Sources forming the value-added tax refund fund are deducted from the revenue of value-added tax on imported goods; the deduction rate is decided by the Minister of Finance based on the proposals of the Director General of the General Department of Taxation and the Director of the Budget Department of the Ministry of Finance.

Article 3: The tax authority, the Budget Department of the Ministry of Finance, and the State Treasury shall perform the establishment of the value-added tax refund fund and the refund of value-added tax to the eligible recipients according to the provisions of this regulation.

Chapter 2:

SPECIFIC PROVISIONS

Article 4: Budget estimate for revenue and refund of value-added tax:

1/ Each year, the tax authority is responsible for forecasting the amount of value-added tax to be refunded in the year for the eligible recipients according to the provisions of Point 1 of Clause 1 of this regulation through the following procedures:

- The Tax Revenue Office forecasts the amount of value-added tax to be refunded for the eligible recipients directly managed by the Tax Revenue Office, then aggregates and sends it to the Tax Bureau.

- The Tax Bureau forecasts the amount of value-added tax to be refunded for the eligible recipients directly managed by the Tax Bureau, and simultaneously aggregates the total amount of value-added tax to be refunded for the eligible recipients within its jurisdiction, sending it to the General Department of Taxation.

- The General Department of Taxation is responsible for aggregating the total amount of value-added tax to be refunded for the eligible recipients nationwide, sending it to the Budget Department of the Ministry of Finance for inclusion in the state budget revenue forecast submitted to the Minister of Finance.

2/ Based on the budget estimate for revenue of value-added tax on imported goods and the forecasted amount of value-added tax to be refunded, the General Department of Taxation and the Budget Department of the Ministry of Finance forecast the amount to be set aside for the next year's value-added tax refund fund from the revenue of value-added tax on imported goods, to be submitted to the Minister of Finance for decision. During the implementation process, if the value-added tax refund fund is insufficient to cover the actual refunds, the Budget Department of the Ministry of Finance is responsible for reporting to the Minister of Finance to promptly supplement the source of refunds for the eligible recipients.

Article 5: Setting up the value-added tax refund fund

Based on the rate of setting up the value-added tax refund fund decided by the Minister of Finance, on a monthly basis, upon the proposal of the Director General of the General Department of Taxation, the Budget Department of the Ministry of Finance will handle the temporary advance from the state budget into the account of the value-added tax refund fund of the General Department of Taxation at the Central State Treasury.

Article 6: Implementing the refund of value-added tax for production and business establishments:

1/ After receiving the refund application documents from the eligible recipients, the tax authority shall carry out the following:

a- For the taxpayers directly managed by the Tax Revenue Office, if they are eligible for a refund under the prescribed regime, the Tax Revenue Office is responsible for checking the documents and confirming the amount of tax to be refunded to the Tax Bureau for review and issuance of the refund decision for these entities.

b- For the eligible recipients directly managed by the Tax Bureau, the Tax Bureau is responsible for reviewing the documents and issuing the refund decision for these entities.

c- For certain special cases and for the State-owned corporations established pursuant to Directive 90/TTg dated March 7, 1994, and Directive 91/TTg dated March 7, 1994 of the Prime Minister, if the refund is centralized at the corporation's office, the Tax Bureau is responsible for inspecting, reviewing, and confirming the amount of tax to be refunded for each unit, reporting to the General Department of Taxation, and the Minister of Finance authorizing the Director General of the General Department of Taxation to issue the refund decision for these entities.

2/ Within five days of receiving the refund decision, the State Treasury shall complete the refund process for the eligible recipients.

- For the eligible recipients whose refund is decided by the Minister of Finance, the General Department of Taxation shall prepare a payment authorization attached to the refund decision to withdraw funds from the refund fund and send it to the Central State Treasury to execute the refund for the entity.

- For the eligible recipients whose refund is decided by the Tax Bureau Director (including those directly managed by the Tax Bureau and those directly managed by the Tax Revenue Office), the Tax Bureau shall prepare the refund decision attached to the payment authorization and send it to the provincial or municipal State Treasury to handle the refund for these entities from the non-resident account for value-added tax refunds. Simultaneously, they are responsible for handling the settlement with the value-added tax refund fund account opened at the Central State Treasury.

3/ In case the balance of the value-added tax refund fund is exhausted, the Central State Treasury is responsible for temporarily advancing the treasury balance to execute the refund for the eligible recipients according to the provisions of Clause 2, Article 6 of this Regulation, and simultaneously notify the Budget Department of the Ministry of Finance for settlement of the temporarily advanced amount.

Chapter 3:

RESPONSIBILITIES OF THE AUTHORITIES IN THE REFUND OF VALUE ADDED TAX

Article 7: The tax authorities at all levels are responsible for:

1/ The General Department of Taxation is responsible for:

a- Forecasting the amount of value-added tax to be refunded in the year.

b- Based on the estimated total VAT refund for the year, coordinate with the State Budget Department to determine the monthly, quarterly rates for establishing the VAT refund account, and estimate the VAT refunds due to each province and city, to be sent to the State Treasury as the basis for implementation.

c- Implement VAT refunds for entities entitled to VAT refunds as stipulated in point c, Clause 1, Article 6 of this Regulation.

d- Guide and inspect VAT refund activities of the Tax Departments.

đ- Manage the VAT refund fund opened at the Central State Treasury.

Report on the situation of VAT refunds to eligible entities every ten days.

Monthly prepare reports on the amount of VAT refunds made to eligible entities (with confirmation from the State Treasury) to be reported to the Ministry and forwarded to the State Budget Department.

Settle the VAT refund fund, prepare settlement reports in accordance with prescribed regulations.

2/ The Tax Departments and local Tax Branches shall have the responsibility to:

a- Develop estimates of the VAT refunds due in their respective areas and report to higher-level tax authorities as prescribed.

b- Conduct inspections and issue decisions (for Tax Departments) or recommend Tax Departments to issue decisions (for Tax Branches) regarding the payment of VAT refunds to eligible entities as prescribed by Law, and bear responsibility before the General Department of Taxation for VAT refund decisions in their respective areas.

c- Provide detailed reports every ten days on VAT refunds to eligible entities to the General Department of Taxation.

d- Monthly prepare detailed accounting reports on VAT refunds to eligible entities in their respective areas (with confirmation from the State Treasury), to be reported to higher-level tax authorities as prescribed.

Article 8: The State Budget Department shall be responsible for:

a- Based on the estimated VAT refund expenditure and the import VAT revenue budget, coordinate with the General Department of Taxation to determine the rate for establishing the VAT refund fund from import VAT revenues.

b- Make provisional payments to the VAT refund fund account to ensure timely funding for units.

c- Monthly coordinate with the General Department of Taxation and the Central State Treasury to adjust downward the import VAT revenue (corresponding to provisional payments into the VAT refund fund) and reduce provisional expenditures from the budget into the VAT refund fund. Bear responsibility for the source to implement VAT refunds according to the decision of the Minister of Finance.

Article 9: The State Treasury shall have the responsibility to:

a- Open a VAT refund account in accordance with Article 2 of this Regulation.

b- Guide provincial and municipal State Treasuries to open current accounts for processing VAT refunds to eligible entities within their respective provinces and cities, following the guidance of the Central State Treasury.

c- Process VAT refunds to eligible entities according to the decision of the Minister of Finance or the Director of Provincial and Municipal Tax Departments in accordance with the time frame specified in Clause 2, Article 6 of this Regulation.

d- Confirm the amount of VAT actually refunded to eligible entities in each province and city.

Chapter 4:

IMPLEMENTATION

Article 10:

Heads of Tax Authorities, State Treasuries, and the State Budget Department shall be responsible for guiding and organizing the implementation in accordance with the provisions of this Regulation.

During implementation, if there are any difficulties, they should be reported to the Ministry of Finance for timely review and adjustment.