If you purchase expensive products during your travel in Vietnam, it is very easy to get a VAT refund if you follow these instructions. A pilot program was implemented in 2012 at Noi Bai and Tan Son Nhat International airports which allowed foreigners to receive VAT refunds in Vietnam. As of early March 2015, the VAT refund to foreigners program has expanded to seven additional exit terminals.
Below is the personal VAT refund process, & then the one for corporate
What are the New airports & ports accepting VAT refunds?
– Cam Ranh International Airport
– Da Nang International Airport and Da Nang port in central Da Nang City
– Nha Trang seaport in coastal Khanh Hoa Province
– Khanh Hoi International seaport in HCMC
– Phu Quoc International Airport.
– Ben Dam Con Dao Seaport
**VAT refunds in Vietnam are only applicable to goods brought along by foreigners when they exit. For the seaports, a refund is only available if the ships go directly abroad from the ports. Keep in mind these ship voyages only occur 3 to 4 times a year.
Foreigners are entitled to obtain a refund that accounts for 85 percent of VAT on eligible goods that were purchased at VAT refund shops during their travel in Vietnam. The remaining 15 percent will be counted as service fees. In other words, this is an opportunity for foreigners to get back some of that hard-earned cash by buying goods at shops that offer VAT refunds. Note that VAT refund currency is Vietnamese Dong (VND).
What are the goods you buy that are eligible?
1. The purchased goods must be subject to VAT, unused, and allowed on aircraft.
2. The purchased goods must not appear on the list of export prohibitions or restrictions.
3. The purchased goods must have invoices and VAT refund declarations issued within 30 days of departure.
4. The purchased goods must be bought from a single shop in one-day duration and must be valued at least VND 2.000.000 (185 USD)
What is the procedure to get the VAT refund?
1. When at the payment counter, make sure you tell the staff that you want to receive your tax refund. Make sure you have your passport with you when you visit the store.
Then they will issue you an original tax refund receipt. Keep all receipts for products sold with Amazon and any other company. Also, keep the seller’s tax document.
2. When you leave for the airport, remember to pack the purchased goods, your passport, the invoice, and the VAT declaration form in separate containers for easy retrieval during an inspection at the airport.
The airport security staff will inspect your carry-on items, so you should be prepared to show them.
3. Upon arriving at the airport, head over to the VAT refund customs inspection office to present all the items mentioned above.
4. Once you complete your declaration form, they’ll collect your boarding pass for your flight. You will then go to the Tax Refund desk where you will receive your refund.
They’ll refund your money in Vietnam Dong, so you’ll need to go to a currency exchange counter. At Noi Bai International Airport, there are two maritime banks as well as a Vietcom Bank and a BIDV exchange.
What is the Regime for Corporate VAT Refunds in Vietnam?
If you are a business owner you can apply for VAT Refunds for certain circumstances (but not limited to these).
- adopt the credit method for VAT declaration and the project is a manufacturing/selling the output goods/services subject to VAT;
- is undergoing an investment phase and has commenced its operation;
- all goods and services purchased for investment purposes must have accumulated input VAT of 300 million dongs or above in order for the purchaser to apply for a VAT refund.
The procedure for VAT refund is not straightforward. Some businesses will experience difficulties with the VAT refund procedure. The Potential risk of a new business? Check out this overview!
What Application for Corporate VAT Refunds in Vietnam?
- all enterprises are advised to take into consideration these common issues related to grants, charter capital, and doing business in certain conditional business areas.
- If the registered investment period is shorter than the actual completion time, the incurred VAT will be carried forward instead of being refunded;
- investment projects are not qualified for the conditional business lines required by relevant laws/regulations or do not have the required licenses or sub-licenses issued by relevant departments;
- Insufficient contribution to the registered capital, or failure to prove up on completed capital contribution either in cash or an asset.
What Corporate Refunds qualify under the Investment Phase?
Local tax authorities may ask how to generate revenue from selling samples during the investment phase. In some cases, the tax officer will try to cut off the VAT refund period incurring testing revenue, and reducing the total refund amount once the tax audit has taken place.
What Input VAT from Purchases?
It is common that the refund/credit input VAT due may not comply with the legal regulations in terms of supporting documents for input purchases and fail the requirements for non-cash payments for purchases. Some incomplete payments for purchased goods and services are used for investment projects, which would be a reason for failing the non-cash payment requirements.
This could happen in different situations, but when you’re working for an enterprise that deals with investments you need to record the input VAT of goods and services you purchase to use for investment purposes.
What are the Common VAT Refund Errors?
Here are some common errors in the VAT refund application include:
- enterprises not blocking the VAT refund requested amount before officially getting into the business operation;
- not registering the bank account receiving the refund amount or e-tax payment, which is regulated by laws.
- non-compliance with VAT declaration forms; or
- making multiple, uncoordinated changes to the tax return for no good reason.
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