Circular No. 04/2009/TT-BTC dated January 13, 2009 of the Ministry of Finance on refund of Value Added Tax pursuant to Resolution 30/2008/NQ-CP of the Government dated 11 December 2008

THE MINISTRY OF FINANCE

Circular No. 04/2009/TT-BTC of January 13, 2009, guiding value-added tax refund under the Government’s Resolution No. 30/2008/NQ-CP of December 11, 2008

Pursuant to June 3, 2008 Value-Added Tax (VAT) Law No. 13/2008/QH12, and guiding legal documents;

Pursuant to November 29, 2006 Tax Administration Law No. 78/2006/QH11, and guiding legal documents;

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

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

The Ministry of Finance guides temporary refund of input VAT for actually exported goods without via-bank payment documents as follows:

I. SUBJECTS ENTITLED TO AND LEVELS OF TEMPORARY VAT REFUND

1. Subjects entitled to temporary VAT refund under this Circular include producers and traders of exported goods (below collectively referred to as enterprises) that have actually exported goods for which foreign partners have not yet made via-bank payment under export contracts, except cases subject to inspection prior to VAT refund below:

- VAT refund under treaties to which the Socialist Republic of Vietnam is a contracting party and which require inspection prior to VAT refund;

- Enterprises which apply for VAT refund for the first time, except export producers and processors with production establishments based in localities where VAT refund is applied and entitled to temporary VAT refund;

- Enterprises which have committed acts of tax evasion or tax fraud within 2 years before the time of application for VAT refund. Acts of tax evasion or tax fraud are specified in Article 14 of the Government’s Decree No. 98/2007/ND-CP of June 7, 2007, on the sanctioning of tax-related law violations and compelled compliance with tax-related administrative decisions;

- Enterprises undergoing merger, consolidation, division, split, dissolution, bankruptcy, ownership transformation or operation termination; and state enterprises subject to assignment, sale, contracting or lease which, upon VAT finalization at the time of merger, consolidation, etc., have an input VAT amount not yet fully credited or have an overpaid VAT amount;

- Upon the expiration of the time limit indicated in the tax agency’s written notice, a VAT payer fails to explain or supplement the VAT refund dossier at the request of the tax agency or fails to prove the truthfulness of the declared VAT amount.

2. The VAT amount to be temporarily refunded for actually exported goods without via-bank payment documents equals 90% (ninety per cent) of the input VAT amount to be refunded under the VAT refund application dossier.

For exported goods under export contracts (indicating the deferred payment method and deferred payment time limit) which are not accompanied with via-bank payment documents, the whole input VAT amount will be refunded under Point 1.3 (c.3), Section III, Part B of the Finance Ministry’s Circular No. 129/2008/TT-BTC of December 26, 2008, guiding the implementation of a number of articles of the VAT Law and guiding the implementation of the Government’s Decree No. 123/2008/ND-CP of December 8, 2008, which details and guides the implementation of a number of articles of the VAT Law.

3. Apart from the above entities entitled to and levels of temporary VAT refund for exported goods, in order to promptly refund VAT for enterprises filing VAT refund application dossiers in other cases (including refund prior to inspection and inspection prior to refund), in the course of examining VAT refund dossiers, tax agencies shall temporarily refund the VAT amounts eligible for refund before completion of inspection and verification. For VAT amounts which are subject to inspection and verification or which enterprises are required to explain and supplement VAT refund dossiers, tax agencies shall refund VAT when having sufficient grounds. The time limit for inspection and VAT refund must not exceed the time limit prescribed by law.

II. VAT REFUND DOSSIERS

1. VAT refund dossiers are guided at Point 2, Section I, Part G of the Finance Ministry’s Circular No. 60/2007/TT-BTC of June 14, 2007, detailing the implementation of a number of articles of the Tax Administration Law and guiding the implementation of the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, which details the implementation of a number of articles of the Tax Administration Law.

An enterprise applying for temporary VAT refund without via-bank payment documents for exported goods shall indicate in its VAT refund application dossier’s written request for refund of the state budget revenue (form No. 05/DNHT to the Finance Ministry’s Circular No. 128/2008/TT-BTC of December 24, 2008, guiding the collection and management of state budget revenues via the State Treasury) as follows: “Enterprise commits to produce a list of via-bank payment documents for exported goods within 5 (five) days after it receives payment for the exported goods.”

2. For the 10% (ten per cent) VAT amount not yet refunded under a VAT refund dossier, an enterprise is not required to send the VAT refund dossier already sent to the tax agency, which sees no modification or supplementation, upon temporary VAT refund. The enterprise shall additionally send to the tax agency:

- A written request for VAT refund, indicating the temporarily refunded 90% VAT amount under Decision No... dated... of the director of the provincial-level Tax Department; and the remaining (10%) VAT amount requested to be refunded;

- A list of via-bank payment documents (under Point 2.1, Section I, Part G of above Circular No. 60/2007/TT-BTC).

3. Enterprises shall take responsibility before law for the validity, lawfulness and accuracy of VAT refund application dossiers, documents, invoices and other relevant documents sent to tax agencies.

III. VAT REFUND

1. Tax agencies shall receive and examine enterprises’ VAT refund application dossiers and consider refunding VAT under regulations. For an enterprise’s dossier of application for temporary VAT refund which is eligible for temporary VAT refund prior to inspection, the tax agency shall issue a decision to temporarily refund VAT to the enterprise, indicating the temporarily refunded VAT amount under the enterprise’s application dossier.

2. Tax agencies shall make dossiers for separately monitoring cases eligible for temporary VAT refund.

The tax agency shall refund the 10% VAT amount not yet refunded under a VAT refund dossier when an enterprise so requests in writing and produces all documents specified at Point 2, Section II of this Circular.

3. Time limit for VAT refund

- For dossiers of VAT refund for exported goods without via-bank payment documents, the time limit for temporary VAT refund (90%) is 7 (seven) working days from the date of receipt of an enterprise’s complete VAT refund application dossier; for the remaining 10% VAT amount eligible for refund, such time limit is 4 (four) working days from the date the tax agency receives an enterprise’s written request for refund of the remaining 10%.

- For other cases eligible for temporary VAT refund based on the results of examination of VAT refund dossiers:

+ For VAT refund dossiers eligible for refund prior to inspection, the time limit for VAT refund is 8 (eight) working days from the date of receipt of an enterprise’s complete dossier of VAT refund application.

+ For VAT refund dossiers subject to inspection prior to refund: Within 5 (five) working days from the date of receipt of an enterprise’s complete VAT refund dossier, the tax agency shall inspect the VAT amount requested by the enterprise to be refunded. The procedures and time for tax refund inspection at enterprises’ headquarters comply with the Tax Administration Law and current guiding documents. The total time limit for inspection, verification and issuance of a VAT refund decision in all cases is 30 (thirty) working days from the date of receipt of an enterprise’s complete VAT refund dossier.

In the process of examining VAT refund dossiers, the tax agency shall issue a decision to immediately refund the VAT amount eligible for refund; or notify the enterprise concerned of a VAT amount subject to inspection, verification, explanation or dossier supplementation.

4. Inspection, and handling of violations

For enterprises entitled to VAT refund prior to inspection, tax agencies shall conduct inspection at at least 50% (fifty per cent) of these enterprises in a year in accordance with the tax administration law and the guidance of the General Department of Taxation. Inspection will be conducted at the remaining 50% of enterprises in the subsequent year. Based on inspection results, if detecting violations, tax agencies shall recover the temporarily refunded VAT amounts and, at the same time, handle tax-related law violations under the Finance Ministry’s Circular No. 61/2007/TT-BTC of June 14, 2007, guiding the handling of tax-related law violations.

IV. ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 45 days from the date of its signing and applies to VAT refund dossiers from January 1, 2009.

The General Department of Taxation shall direct and guide provincial-level Tax Departments in implementing this Circular.

Agencies, units and business establishments should report any difficulties or problems arising in the course of implementation to the Ministry of Finance for guidance and timely settlement.

For the Minister of Finance
Vice Minister
DO HOANG ANH TUAN