Circular No. 94/2010/TT-BTC guiding the implementation of value-added tax refunds for exported goods

CIRCULAR

Guidelines for Value Added Tax Refunds on Exported Goods

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Pursuant to the provisions of the Law on Value Added Tax (VAT) No. 13/2008/QH12 dated June 3, 2008, and other legal documents regulating and guiding the implementation of the VAT Law;

Pursuant to the Law on Tax Administration No. 78/2006/QH11 dated November 29, 2006, and other legal documents regulating and guiding the implementation of the Tax Administration Law;

Pursuant to Point 1(c) of Section III of Resolution No. 30/2008/NQ-CP dated December 11, 2008 of the Government on urgent measures to prevent economic decline, maintain economic growth, and ensure social welfare;

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

To implement the directives of the Prime Minister in Circular No. 2600/TTg-KTTH dated December 30, 2009 regarding the promotion of exports and control of trade deficits;

The Ministry of Finance hereby provides guidelines for the temporary refund of VAT input tax on exported goods as follows:

Article 1. Temporary refund of VAT on exported goods that have not yet been paid through banks

1. The subjects eligible for the temporary refund of VAT under this Circular are organizations engaged in production and business of exported goods which have actual exported goods still within the period without foreign payment through banks according to export contracts, except for the following cases requiring pre-refund inspection:

- Refunds pursuant to international treaties to which the Socialist Republic of Vietnam is a party, where such treaties require pre-refund inspection;

- First-time taxpayers requesting a refund, except when taxpayers producing or processing exported goods with production bases in the locality where the refund is made are temporarily refunded VAT;

- Taxpayers who have committed tax evasion or fraud within two years prior to the date of the refund request. Tax evasion and fraud are defined at the level specified in Article 14 of Decree No. 98/2007/NĐ-CP dated June 7, 2007 of the Government on handling violations of tax laws and enforcing administrative decisions on taxes;

- Taxpayers undergoing mergers, consolidations, divisions, dissolution, bankruptcy, changes in ownership form of business establishments, cessation of business operations; transferring, selling, leasing state-owned enterprises, when settling taxes at the time of merger, consolidation... with unpaid VAT input tax or excess VAT paid;

- After the deadline notified in writing by the tax authority, taxpayers fail to provide explanations or supplementary refund documents as required by the tax authority or cannot prove the accuracy of the declared tax amount.

2. The temporary refund amount of VAT for exported goods that have not yet been paid through banks shall be 90% (ninety percent) of the VAT input tax refundable for exported goods based on the refund application submitted by the taxpayer.

Example 1: Company A has an export contract, has actually exported goods, is still within the period without foreign payment through banks according to the export contract, the VAT input tax of exported goods is 100 million VND, then Company A is entitled to a temporary refund of 90% of the VAT input tax of the actually exported goods, equivalent to 90 million VND.

In the case of exported goods being paid under deferred payment terms or installment payments clearly stated in the export contract during the period before the payment due date, or if there is no bank payment receipt or advance payment from abroad, the taxpayer is entitled to a full refund of the VAT input tax according to the guidance at Point 1.3(c.3) of Section III Part B of Circular No., 129/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance guiding the implementation of certain provisions of the VAT Law and guiding the implementation of Decree No. 123/2008/NĐ-CP dated December 8, 2008 of the Government detailing and guiding the implementation of certain provisions of the VAT Law.        Example 2: Company C has an export contract, the export contract clearly states deferred payment terms and deadlines, the goods have been actually exported, is still within the period without foreign payment through banks according to the export contract, the VAT input tax of exported goods is 100 million VND, then Company C is entitled to a temporary refund of 100% of the VAT input tax of the actually exported goods, equivalent to 100 million VND. Upon reaching the payment deadline stated in the export contract, Company C must present the bank payment receipt as prescribed.

In the case where the taxpayer has actually exported goods, has received foreign payment through banks according to the export contract for part of the value of the actually exported goods, if the taxpayer has a refund application for VAT input tax on exported goods (including both the value of exported goods already paid and the value of exported goods not yet paid), if they meet the conditions for tax deduction and refund, they will be refunded VAT input tax as follows: The portion of goods with bank payment receipts is fully refunded; The remaining portion of goods without bank payment receipts due to not yet reaching the payment deadline according to the export contract is temporarily refunded 90%, upon reaching the payment deadline according to the export contract, the taxpayer presents sufficient bank payment receipts to receive an additional 10% of the unrefunded VAT.

Example 3: Company A has an export contract, has actually exported goods, the VAT input tax of exported goods is 100 million VND. After receiving foreign payment through banks according to the export contract corresponding to 80% of the value of the actually exported goods, the remaining value of goods has not reached the payment deadline. Company A has a refund application for exported goods, then it will be refunded as follows:

+ Company A receives a refund of 80 million VND (for the portion of exported goods with sufficient bank payment receipts); is temporarily refunded 18 million VND (20 million x 90%), receives an additional 2 million VND (remaining 10%) when presenting sufficient bank payment receipts as prescribed.

Company A shall be refunded eighty million VND (for exported goods that have all necessary payment documents); provisionally refunded eighteen million VND (ninety percent of twenty million VND), and shall be refunded an additional two million VND (the remaining ten percent) when all required payment documents through the bank are available as prescribed.

In cases where the payment deadline under the export contract has been reached, but the company only establishes a tax refund application for the 80% of goods that have complete payment documents, and there are no payment documents for the remaining 20%, the company will be refunded VND 80 million for the exported goods with complete payment documents; the remaining goods without payment documents as required will not yet be refunded.

3. Besides the objects and provisional VAT refund rates for exported goods mentioned above, to promptly process tax refunds for taxpayers who have applications for tax refunds belonging to other categories and situations (including advance refunds followed by post-refund audits and pre-audits followed by post-audit refunds), during the tax refund application review process, if the tax authority determines that certain taxes meet the conditions for refund, they shall temporarily refund those taxes without waiting for a full audit of the entire application; for taxes requiring verification and additional information from the taxpayer, the refund will be processed once sufficient evidence is provided.

Article 2. Refunds of VAT on Exported Goods in Certain Situations:

1. In cases of entrusted exports, the party accepting the entrustment must retain the second copy of the VAT invoice issued by the entrusting party according to regulations. After receiving payment from foreign customers for the entrusted exported goods, the accepting party must make bank transfers to the entrusting party, similar to regular export transactions.

If the party accepting the entrustment exports the same type of goods in separate shipments for different principals and delivers them to various foreign buyers at different prices, the accepting party must confirm the actual quantity of exported goods along with a detailed list of items, quantities, unit prices, and revenue from the exported goods, and must send copies of the customs declaration, export contract, and bank payment documents to the entrusting party (with signatures and stamps from the sending entity).

2. If a taxpayer has an export contract selling goods to a foreign customer, completes the export procedures, and subsequently reaches an agreement with the foreign party to adjust the sales price; if the taxpayer has a supplementary contract or a contract amendment document in compliance with current laws and adjusts the VAT invoice and export revenue according to the adjusted sales price, and if the exported goods meet the conditions for VAT input tax deduction, then the entire VAT input tax of the exported goods can be deducted and refunded according to regulations.

3. In cases where the weight or volume of exported goods changes naturally during transportation due to their physical and chemical properties (as confirmed independently by both the exporter and importer), the taxpayer may declare and deduct VAT input tax for the actual exported quantity if other conditions are met as stipulated. In this case, the revenue from exporting goods is determined based on the actual amount paid by the foreign party through the bank, consistent with the agreement between the buyer and seller in the export contract (supplementary contract or contract amendment, if applicable). The VAT refund amount is calculated based on the total value of the actually exported goods.

For goods actually exported as specified in Clauses 1, 2, and 3 of this Article that do not have bank payment documents, VAT refunds will be temporarily processed according to this Circular.

4. VAT input tax on returned exported goods by foreign customers cannot be refunded. If the tax authority has already refunded more than the eligible amount, the excess refund corresponding to the value of the returned exported goods must be recovered. The recovery of the refund will be handled according to the decision of the tax authority. If the taxpayer subsequently resells the returned goods, they must declare and pay taxes, and be eligible for deductions and refunds according to regulations.

Article 3. Tax Refund Documents

1. The Value Added Tax (VAT) refund documents shall be implemented in accordance with the guidance provided in Point 2, Section I, Part G of Circular No. 60/2007/TT-BTC dated June 14, 2007, issued by the Ministry of Finance to provide detailed guidance on the implementation of certain provisions of the Law on Tax Administration and to guide the implementation of Decree No. 85/2007/NĐ-CP dated May 25, 2007, issued by the Government detailing the implementation of certain provisions of the Law on Tax Administration; however, for the case of temporarily refunding VAT, the Application Form for Refunding State Budget Revenue (Form No. 01/ĐNHT) attached to this Circular shall be used.

In cases where taxpayers request a temporary refund before having export payment vouchers from banks, the taxpayer must commit to submitting the Export Payment Voucher Summary within no more than five (5) days from the date of receiving payment for exported goods. The date of payment received by the enterprise is the date recorded in the export contract; if the export contract does not clearly state the deadline for foreign customers to make bank payments, the payment method specified in the export contract will be used to determine the date.

2. For the ten percent (10%) of VAT that has not yet been refunded according to the tax refund documents, the taxpayer does not need to resubmit the tax refund documents already submitted to the tax authority unless there are adjustments or supplements to the previously submitted documents; the taxpayer only needs to submit additional documents to the tax authority:

- The Application Form for Refunding State Budget Revenue (Form No. 01/ĐNHT mentioned above).

- The Bank Payment Voucher Summary (as stipulated in Point 2.1, Section I, Part G of Circular No. 60/2007/TT-BTC mentioned above).

3. The taxpayer is responsible under the law for the legality, validity, and accuracy of the documents, invoices, and other relevant materials included in the tax refund application documents submitted to the tax authority.

Article 4. Procedures and Timeframe for Processing Tax Refunds

1. The tax authority is responsible for receiving, examining, and processing tax refund applications from taxpayers in accordance with regulations.

If a taxpayer's tax refund application includes both VAT input tax on exported goods without bank payment vouchers and VAT input tax on domestic sales, the tax authority will verify and determine whether the goods and services sold domestically have VAT input tax that has not been fully deducted and is eligible for refund. In such cases, the tax authority will process the refund accordingly. For exported goods without bank payment vouchers, the tax authority will separate the relevant data related to the VAT input tax on exported goods without bank payment vouchers to process a temporary refund of ninety percent (90%) of the VAT input tax on exported goods. If the taxpayer does not declare separately the VAT input tax on exported goods, the VAT input tax on exported goods will be determined based on the percentage of export revenue relative to total revenue declared for the tax refund period.

In cases where the application for a temporary VAT refund falls under the category of being temporarily refunded before inspection, the tax authority will check the completeness, correct procedures, and legality of the refund application to issue an order for refund (according to Form C1-04/NS or Form C1-05/NS issued along with Circular No. 128/2008/TT-BTC dated December 24, 2008, issued by the Ministry of Finance guiding the collection and management of State Budget Revenue through the National Treasury). In the refund order, the "Reason for Refund" field must clearly state the temporary refund of VAT for exported goods based on the taxpayer's refund application.

2. The tax authority will continue to refund the remaining ten percent (10%) of the VAT that has not yet been refunded when the taxpayer provides complete refund application documents in accordance with Clause 2 of Article 3 of this Circular.

3. Timeframe for Processing Tax Refunds:

- For applications for a temporary refund of ninety percent (90%) of VAT on exported goods without bank payment vouchers, which ensure completeness, correct procedures, and legality, the maximum processing time for a temporary refund is seven (7) working days from the date of receipt of all refund application documents from the taxpayer.

- For applications for the remaining ten percent (10%) of VAT on exported goods without bank payment vouchers, the maximum processing time for a refund is four (4) working days from the date of receipt of all refund application documents from the taxpayer. In cases managed by the Tax Office, the tax authority will instruct the taxpayer to send the application for the remaining ten percent (10%) refund directly to the Tax Department for processing (not to the Tax Office). If the application is complete with bank payment vouchers as required, the Tax Department will immediately refund the remaining ten percent (10%) of the tax within the specified timeframe; if it is necessary to verify the bank payment vouchers, the Tax Department will notify the Tax Office to conduct the verification.  - For other cases eligible for temporary refunds based on the results of the tax refund document review:

+ For tax refund documents eligible for pre-refund and post-inspection, the maximum processing time for a temporary refund is eight (8) working days from the date of receipt of all refund application documents from the taxpayer.

+ For tax refund documents eligible for pre-inspection and post-refund, within five (5) working days from the date of receipt of all refund documents from the taxpayer, the tax authority must organize the inspection of the tax amount requested for refund. The procedures and timeframe for inspecting and refunding taxes at the taxpayer's premises shall be carried out in accordance with the Law on Tax Administration and current implementing regulations and guidelines. The total time for inspection, verification, and issuing orders for refunds for each case shall not exceed thirty (30) working days from the date of receipt of all refund documents from the taxpayer.

During the review of tax refund documents for exported goods without bank payment vouchers, if the tax authority determines that the tax meets the conditions for refund, they will immediately issue an order for refund corresponding to the tax amount that meets the refund conditions; for tax amounts requiring further verification, explanation, or supplementary documentation, a notification must be sent to the taxpayer.

During the process of reviewing export tax refund files without bank payment documents, if the tax authority determines that the tax amount meets the conditions for refund, it shall immediately issue an order to refund the corresponding tax amount; for the tax amount requiring further verification, explanation, and supplementary documentation, a notification must be sent to the taxpayer.

Article 5. Inspection and Handling of Violations:

1. For enterprises that have been refunded taxes before inspection, tax authorities must organize post-refund inspections according to the provisions of tax management laws. Based on the results of the inspection, if fraud or tax evasion is discovered (including failure to make payments through banks and inability to provide bank payment receipts within the prescribed time limit), the tax authority shall recover the temporarily refunded VAT amount in violation, and handle the violation of tax law in accordance with the guidance provided in Circular No. 61/2007/TT-BTC dated June 14, 2007 of the Ministry of Finance on implementing the handling of violations of tax law.

2. In cases where the payment deadline has not yet arrived but both parties to the sale and purchase have agreed to adjust the payment period, and the taxpayer has already been resolved by the tax authority for a temporary refund of input VAT on goods actually exported, the taxpayer must immediately provide the relevant payment period adjustment agreement document to the tax authority within three days from the date of signing, serving as the basis for determining the deadline for presenting bank payment receipts as required.

3. When the payment deadline under the export contract arrives, if the taxpayer cannot present the bank payment receipt as stipulated in the export contract, in addition to being required to recover the corresponding temporarily refunded tax amount, the taxpayer will also be subject to penalties for false declarations leading to an increase in the tax refund amount as guided in Section III Part B of Circular No. 61/2007/TT-BTC mentioned above.

If the taxpayer is not paid by the foreign customer due to the customer's bankruptcy or inability to pay, the corresponding temporarily refunded VAT amount will be recovered, but no penalty will be imposed if the taxpayer can present a court document from the foreign country confirming the foreign customer's bankruptcy or a related document confirming the foreign party's inability to pay. The deadline for presenting such documents shall not exceed sixty (60) days from the payment deadline specified in the contract; if the taxpayer fails to present bank payment receipts or the aforementioned documents beyond this period, the tax authority will recover the temporarily refunded VAT amount for exported goods without bank payment receipts and impose penalties for false declarations as guided in Circular No. 61/2007/TT-BTC mentioned above.

If the export contract does not clearly specify the payment period, thirty (30) days after the taxpayer receives a temporary refund of ninety percent (90%) of the input VAT on exported goods during the period when payment has not been made through the bank as stipulated in the export contract, if the taxpayer has not presented the bank payment receipt, the tax authority shall issue a notice requiring the enterprise to report and explain (in Form No. 01/KTTT issued together with Circular No. 60/2007/TT-BTC mentioned above); if the taxpayer does not provide a satisfactory explanation, the tax authority shall conduct a post-refund inspection to clarify the reasons for the delay in presenting the bank payment receipt. If it is determined that the enterprise has committed an error and does not meet the conditions for refunding VAT on exported goods, the temporarily refunded VAT amount will be recovered and penalties for tax violations will be imposed according to the law.

If the taxpayer fails to present the bank payment receipt by the deadline for presenting such receipts, the tax authority shall recover the tax amount refunded for exported goods without bank payment receipts and impose penalties for violations of tax law. If the taxpayer subsequently receives payment from the foreign party and presents the bank payment receipt, they may declare deductions and refunds according to regulations. 

In cases where the tax authority resolves VAT refunds before inspection based on the examination and resolution of the refund application as documented in the file, the taxpayer is responsible for the truthfulness and accuracy of the file. If the taxpayer prepares the file incorrectly, leading to an erroneous tax refund by the tax authority, the taxpayer must bear responsibility for repaying the erroneously refunded tax amount; if this constitutes a serious violation, legal action will be taken.

Article 6. Provisional Refund Report

The direct tax administration authority responsible for the taxpayer shall be in charge of opening files to monitor and report on the situation of provisional refund of VAT for exported goods that have not yet been paid through foreign banks according to export contracts.

The General Department of Taxation shall be responsible for guiding tax authorities at all levels to implement monitoring and reporting on provisional refund of VAT as prescribed in this Circular.

Article 7. Implementation Organization

This Circular takes effect 45 days from the date of signature and replaces Circular No. 04/2009/TT-BTC dated January 13, 2009 of the Ministry of Finance guiding the implementation of VAT refund pursuant to Resolution No. 30/2008/NQ-CP dated December 11, 2008 of the Government.Contents not guided in this Circular shall be implemented in accordance with Circular No. 129/2008/TT-BTC dated December 26, 2008 of the Ministry of Finance guiding the implementation of certain provisions of the Law on Value Added Tax and guiding the implementation of Decree No. 123/2008/NĐ-CP dated December 8, 2008 of the Government detailing and guiding the implementation of certain provisions of the Law on Value Added Tax, provided they do not conflict with the guidance in this Circular.

For VAT refund files of exported goods without bank payment vouchers submitted by taxpayers to the tax authority before the effective date of this Circular, if the tax authority's examination and resolution of the refund occurs after the effective date of this Circular, such cases shall be handled in accordance with this Circular.

During the implementation process, if there are any difficulties, organizations and individuals are advised to reflect them to the Ministry of Finance for timely research and amendment./.