Refunding VAT of imported goods and then exporting before and after February 1, 2018

Ministry of Finance issued Official Letter No. 5438 / BTC-CST dated 14/5/2019 o on Refunding VAT of imported goods and then exporting . The content follows:

The Ministry of Finance received Document No. 55472 / CT-TTHT dated 8 August 2018 of Hanoi Tax Department regarding the problems of Nagase Vietnam Co., Ltd. on value added tax refund (VAT) for imported goods before February 1, 2018, then export after February 1, 2018. In this regard, the Ministry of Finance has the following opinions:

– From July 1, 2016 to before February 1, 2018:

In Clause 6, Article 1 of Decree No. 100/2016 / ND-CP dated July 1, 2016 of the Government detailing and guiding the implementation of a number of articles of the Law amending and supplementing a number of articles of the VAT Law The Law on Special Consumption Tax and the Law on Tax Administration have the following provisions:

Business establishments shall not be entitled to a tax refund in the case of imported goods and then exported and exported goods do not export in the area of ​​customs operation in accordance with the Customs Law and other documents .”

– From February 1, 2018:

In Clause 2, Article 1 of Decree No. 146/2017 / ND-CP dated December 15, 2017 of the Government amending and supplementing a number of articles of Decree No. 100/2016 / ND-CP dated July 1, 2016 and Decree No. 12/2015 / ND-CP dated February 12, 2015 of the Government specifies:

In a month (in case of monthly declaration) or quarter (in case of quarterly declaration), if the input VAT on exported goods/services (including goods that are imported and subsequently exported to non-tariff areas and the goods that are imported and subsequently exported to other countries) of a business entity remains at least VND 300 million after being offset against, it shall be refunded by month or quarter. If such input VAT is less than VND 300 million, it shall be offset against in the next month/quarter. In case a business establishment has both exported goods/services and goods/services sold domestically and input VAT on exported goods/services that remains at least VND 300 million after being offset against tax payable, it shall be refunded. Input VAT on purchases used for manufacturing of exported goods/services shall be separately recorded. Otherwise, input VAT shall be determined according to the ratio of revenue from exported goods/services to total revenue from goods/services accrued from the tax period succeeding the period in which tax is refunded to the current period in which tax refund is claimed.

VAT will not be refunded if the goods are imported and then exported outside a customs controlled area in accordance with regulations of law on customs or the goods for are exported outside the customs control areas in accordance with regulations of law on customs.

Tax authorities shall grant a refund before inspection if the taxpayer who is a manufacturer of exports has not incurred any penalty for smuggling, illegal cross-border transport of goods, tax evasion, tax fraud, trade fraud for two consecutive years or the taxpayer does not pose a high risk according to the Law on Tax administration and its instructional documents.”

Based on the above provisions, from July 1, 2016 to  February 1, 2018, business establishments shall not be refunded tax for case of imported goods then exported.  From February 1, 2018, business establishments shall comply with the guidance in Clause 2, Article 1 of Decree No. 146/2017 / ND-CP.

 

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