Circular No. 94/2010/TT-BTC dated June 30, 2010 of the Ministry of Finance guiding value-added tax refund for exported goods

THE MINISTRY OF FINANCE

Circular No. 94/2010/TT-BTC of June 30, 2010, guiding value-added tax refund for exported goods

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;

In furtherance of the Prime Minister’s directing opinions in Official Letter No. 2600/TTg-KTTH of December 30, 2009, on accelerating export and controlling trade deficit;

The Ministry of Finance guides the refund of input VAT for actually exported goods as follows:

Article 1. Temporary VAT refund for actually exported goods without via-bank payment documents

1. Eligible for temporary VAT refund under this Circular are export producers and traders having actually exported goods pending via-bank payment by foreign parties under export contracts, except the following cases which are subject to inspection prior to VAT refund:

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

- Taxpayers that request VAT refund for the first time, except export producers and processors with production establishments based in localities where VAT refund is effected that are eligible for temporary VAT refund;

- Taxpayers that have committed tax evasion or tax fraud within 2 (two) years before the time of request 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 handling of violations of tax laws and enforcement of tax-related administrative decisions;

- Taxpayers that merge, consolidate, divide, split, dissolve, go bankrupt, transform their ownership or terminate business operations; and state enterprises that are assigned, sold, contracted or leased which, upon carrying out 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 tax offices’ notices, taxpayers fail to explain or supplement VAT refund dossiers at the request of tax offices or fail to prove the accuracy of declared VAT amounts.

2. The VAT amount to be temporarily refunded for actually exported goods without via-bank payment documents is equal to 90% (ninety per cent) of the input VAT amount to be refunded under taxpayers’ dossiers of request.

Example 1: Company A has signed an export contract and actually exported goods but the deadline for via-bank payment by the foreign party under the export contract has not yet expired. If the input VAT of exported goods is VND 100 million, Company A will be temporarily refunded 90% of this input VAT amount which is VND 90 million.

- In case deferred payment or installment payment is made for exported goods and this mode of payment is explicitly indicated in the export contract, if the payment deadline has not yet expired and via-bank payment documents are unavailable or the foreign party has made payment or advanced payment, the taxpayer shall be refunded the whole input VAT amount 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 a number of articles of the VAT Law, and the Government’s Decree No. 123/2008/ND-CP of December 8, 2008, which details and guides a number of articles of the VAT Law.

Example 2: Company C has signed an export contract which clearly indicates the mode of deferred payment and the payment schedule. Goods have been actually exported but the deadline for via-bank payment by the foreign party under the export contract has not yet expired. If the input VAT of exported goods is VND 100 million, Company C will be refunded 100% of this input VAT amount. When the payment deadline indicated in the export contract expires, Company C must produce via-bank payment documents as prescribed.

- In case a taxpayer has actually exported goods and the foreign party has made via-bank payment under the export contract for part of the actually exported goods, if the taxpayer files a dossier of request for temporary refund of input VAT for exported goods (including the paid volume of exported goods and the unpaid volume of exported goods) and all conditions for VAT credit and refund are satisfied, input VAT shall be refunded as follows: the whole input VAT amount for the volume of goods for which via-bank payment documents are available will be refunded. For the remaining volume of goods for which via-bank payment documents are unavailable because the payment deadline indicated in the export contract has not yet expired, 90% of the input VAT will be temporarily refunded. Upon the expiration of the payment deadline indicated in the export contract, if the taxpayer submits sufficient via-bank payment documents, the remaining 10% will be refunded.

Example 3: Company A has signed an export contract and actually exported goods. The input VAT amount of exported goods is VND 100 million. Company A has received from the foreign party via-bank payment for 80% of the value of the actually exported goods while the deadline for payment of the remaining value of the exported goods has not yet expired. If Company A files a dossier of request for temporary VAT refund for exported goods, VAT shall be refunded as follows:

+ Company A will be refunded VND 80 million (for exported goods with sufficient via-bank payment documents) and temporarily refunded VND 18 million (VND 20 million x 90%). The remaining amount of VND 2 million (10%) will be refunded after all via-bank payment documents are submitted as prescribed.

+ In the same case, if the company files a tax refund dossier after the expiration of the payment deadline indicated in the export contract and payment documents for the remaining 20% of the exported goods value are still unavailable, the company will be refunded VND 80 million for the value of exported goods for which payment documents are available. For the value of goods for which payment documents are unavailable, input VAT will not be refunded.

3. In addition to entities eligible for, and levels of, temporary VAT refund for exported goods mentioned above, in order to promptly refund VAT to taxpayers filing VAT refund dossiers in other cases (including refund prior to inspection and inspection prior to refund), in the course of examining VAT refund dossiers, if tax offices determine that conditions for tax refund are fully met, they may effect the temporary VAT refund before completing the verification of the whole dossiers. In case VAT amounts need to be inspected and verified and taxpayers are required to explain and supplement VAT refund dossiers, tax offices shall refund VAT when having sufficient grounds.

Article 2. VAT refund for exported goods in some other cases

1. In case of entrusted export, the entrusted party shall keep added-value invoices on the sale of exported goods (the second original) issued by the entrusting party according to regulations. After receiving payment for exported goods from the foreign customer, the entrusted party shall make via-bank payment (as for cases of direct export) to the entrusting party.

In case the entrusted party exports goods of the same category which are purchased from different goods owners for delivery to different customers at different prices, the entrusted party shall make a written certification of the quantity of actually exported goods, enclosed with a detailed statement of goods names, quantity, unit prices and export turnover and copies of customs declarations, export contracts and via-bank payment documents, for sending to the entrusting party.

2. In case a taxpayer has signed an export contract on the sale of goods to a foreign customer and has completed export procedures, then the taxpayer and its foreign party agree to adjust goods sale prices, if the taxpayer has made a contract annex or a document modifying the contract according to current law and adjusted added-value invoices and export turnover based on adjusted sale prices and these exported goods satisfy all conditions for input VAT credit, the whole input VAT amount of exported goods may be declared for credit and refund according to regulations.

3. In case the natural weight or volume of exported goods increases or decreases during transportation due to their physical and chemical properties (according to the results of independent assessment of the exporter and the importer), the taxpayer may declare and credit the input VAT amount of the actual volume of exported goods if other prescribed conditions are fully met. In this case, export turnover shall be determined based on the sum of money actually paid via bank by the foreign party as agreed by the seller and the purchaser in the relevant export contract (contract annex or document modifying the contract, if any). The to-be-refunded VAT amount shall be calculated on the whole value of goods actually exported.

Actually exported goods defined in Clauses 1, 2 and 3 of this Circular for which via-bank payment documents are not yet available, are entitled to VAT refund under this Circular.

4. For exported goods returned by foreign customers, input VAT will not be refunded. In case in which the tax amount refunded by a tax office is larger than the to-be-refunded tax amount, the tax office shall recover the tax amount ineligible for refund corresponding to the value of exported goods which are returned. The recovered tax amount shall be managed under the tax office’s decision. If the taxpayer sells these returned goods later, he/she shall declare and pay tax and are entitled to tax credit and refund according to regulations.

Article 3. 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 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 a number of articles of the Tax Administration Law. Particularly, the request for refund from the state budget, in case of temporary VAT refund, shall be made according to form No. 01/DNHT attached to this Circular (not printed herein).

A taxpayer requesting temporary VAT refund without via-bank payment documents for exported goods shall commit to producing a list of via-bank payment documents within 5 (five) days after receiving payment for exported goods. The date of receiving payment for exported goods is the date of payment indicated in the export contract. In case in which the export contract does not state the deadline for via-bank payment, the date of payment shall be determined based on the mode of payment indicated in the export contract.

2. For the 10% (ten per cent) of VAT amount not yet refunded under a refund dossier, the taxpayer is not required to compile and re-send the VAT refund dossier already sent to the tax office if no modification or supplementation is made to the sent dossier. The taxpayer shall additionally send to the tax office:

- A written request for refund from the state budget (made according to form No. 01/DNHT);

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

3. Taxpayers shall take responsibility before law for the validity, lawfulness and accuracy of VAT refund dossiers as well as documents, invoices and other relevant documents sent to tax offices.

Article 4. Procedures and time limits for VAT refund

1. Tax offices shall receive and examine taxpayers’ VAT refund dossiers and refund VAT according to regulations.

In case a taxpayer files a VAT refund dossier for both input VAT of exported goods without via-bank payment documents and input VAT of domestically sold goods and services, the tax office shall refund VAT for domestically sold goods and services for which input VAT has not yet fully credited, if after examination it identifies that these goods and services are eligible for VAT refund. For exported goods without via-bank payment documents, the tax office shall separately handle data on input VAT of these goods for effecting the temporary refund of 90% of the input VAT amount. In case the taxpayer cannot separately declare input VAT of exported goods, this amount shall be determined based on the proportion of the export turnover to the total turnover of goods sold in the tax declaration and refund period.

For VAT refund dossiers falling into the case of refund prior to inspection, tax offices shall examine the completeness and validity of dossiers for use as grounds for issuing refund orders (made according to form No. C1-04/NS or C1-05/NS attached 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 state treasuries) to taxpayers. In the refund order’s “refund reasons” item, the phrase “temporary VAT refund for exported goods under the taxpayer’s request dossier” shall be written.

2. The tax office shall refund the remaining 10% VAT amount under a VAT refund dossier when the taxpayer submits a complete VAT refund dossier under Clause 2, Article 3 of this Circular.

3. Time limits 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 after the receipt of a complete and valid dossier;

- For dossiers of request for refund of the remaining 10% VAT amount for exported goods without via-bank payment documents, the time limit for VAT refund is 4 (four) working days after the receipt of a complete dossier. For taxpayers managed by provincial-level Tax Departments, tax offices shall guide them to send dossiers of request to provincial-level Tax Departments (not to district-level Tax Departments). If via-bank payment documents in the dossier are sufficient as prescribed, provincial-level Tax Departments shall refund the remaining 10% VAT amount within the above-stated time limit. In case via-bank payment documents need to be verified, provincial-level Tax Departments shall notify such to district-level Tax Departments for conducting verification.

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

+ For VAT refund dossiers falling in the case of refund prior to inspection, the time limit for VAT refund is 8 (eight) working days after receiving a complete dossier.

+ For VAT refund dossiers falling in the case of inspection prior to refund: Within 5 (five) working days after receiving a complete VAT refund dossier from a taxpayer, the tax office shall inspect the VAT amount requested for refund. The procedures and time for tax refund inspection at taxpayers’ headquarters comply with the Tax Administration Law and current guiding documents. In these cases, the total time limit for inspection, verification and issuance of a VAT refund decision is 30 (thirty) working days after receiving a complete VAT refund dossier.

In the course of inspecting dossiers of VAT refund for exported goods without via-bank payment documents, tax offices shall issue refund orders for VAT amounts eligible for refund. For VAT amounts which need to be verified or require explanation or supplementation of dossiers, they shall issue written notices to taxpayers.

Article 5. Inspection, and handling of violations

1. For taxpayers entitled to VAT refund prior to inspection, tax offices shall conduct post-tax refund inspection in accordance with the tax administration law. If detecting, through inspection, acts of tax fraud or evasion (including failure to make via-bank payment or to supply via-bank payment documents within the prescribed time limit), tax offices shall recover the temporarily refunded VAT amounts and, at the same time, handle these violations under the Finance Ministry’s Circular No. 61/2007/TT-BTC of June 14, 2007, guiding the handling of violations of tax laws.

2. In case the payment deadline is adjusted by the seller and purchaser before its expiration and the taxpayer has been temporarily refunded input VAT for actually exported goods, the taxpayer shall submit the document on the adjustment of the payment deadline to the tax office within 3 (three) days after the date of its signing for use as a basis for determining the deadline for submitting via-bank payment documents according to regulations.

3. Upon the expiration of the payment deadline indicated in the export contract, if the taxpayer still fails to submit via-bank payment documents, it shall, in addition to having the temporarily refunded VAT amount recovered, be sanctioned for making false declarations leading to an increase in the to-be-refunded VAT amount under the guidance in Section III, Part B of Circular No. 61/2007/TT-BTC.

In case a taxpayer receives no payment from the foreign customer as the latter has gone bankrupt or fallen into insolvency, the temporarily refunded VAT amount shall be recovered but the taxpayer will not be sanctioned if he/she can produce a written certification of the foreign customer’s bankruptcy issued by a foreign court or a document stating the reasons for the foreign customer’s insolvency. This document must be produced within 60 (sixty) days after the expiration of the payment deadline indicated in the export contract. Past the 60-day time limit, if the taxpayer still fails to produce via-bank payment documents or any of the above-said documents, the tax office shall recover the temporarily refunded VAT amount for exported goods without via-bank payment documents and sanction such false declaration under Circular No. 61/2007/TT-BTC.

4. In case the export contract does not indicate the payment deadline, if the taxpayer fails to submit via-bank payment documents within 30 (thirty) days after receiving the temporarily refunded 90% of the input VAT amount for actually exported goods for which via-bank payment has not yet been made under the export contract, the tax office shall issue a notice requesting the taxpayer to make an explanatory report (according to form No. 01/KTTT attached to Circular No. 61/2007/TT-BTC). If the taxpayer fails to give reasonable explanations, the tax office shall conduct post-VAT refund inspection to identify the reasons for late submission of via-bank payment documents. If determining that the taxpayer has committed violations and therefore does not satisfy conditions for VAT refund for exported goods, the tax office shall recover the temporarily refunded VAT amount and sanction the violation according to law.

5. Upon the expiration of the time limit for submission of via-bank payment documents, if a taxpayer still fails to produce these documents, the tax office shall recover the refunded VAT amount and sanction the tax-related violation. If the taxpayer later receives payment from the foreign party and is able to produce payment documents, the taxpayer shall make declarations for VAT credit and refund according to regulations.

6. Tax offices shall settle cases eligible for VAT refund prior to inspection based on dossiers. Taxpayers shall take responsibility for the truthfulness and accuracy of their dossiers. If taxpayers make inaccurate dossiers, leading to incorrect calculation of to-be-refunded VAT amounts by tax offices, they shall return the incorrectly refunded VAT amounts. If committing severe violations, they shall be handled according to law.

Article 6. Reporting on temporary VAT refund

Tax offices directly managing taxpayers shall open dossiers for monitoring and report and evaluate the temporary refund of VAT for actually exported goods pending via-bank payment by foreign parties under export contracts.

The General Department of Taxation shall guide tax offices of different levels to monitor and report the temporary VAT refund under this Circular.

Article 7. Organization of implementation

This Circular takes effect 45 days from the date of its signing and replaces the Finance Ministry’s Circular No. 04/2009/TT-BTC of January 13, 2009, guiding VAT refund under the Government’s Resolution No. 30/2008/NQ-CP of December 11, 2008. Matters not guided in this Circular comply with the Finance Ministry’s Circular No. 129/2008/TT-BTC of December 26, 2008, guiding a number of articles of the VAT Law and the Government’s Decree No. 123/2008/ND-CP of December 8, 2008, detailing and guiding a number of articles of the VAT Law, provided that they are not contrary to this Circular.

This Circular also applies to VAT refund dossiers of exported goods without via-bank payment documents which are sent by taxpayers to tax offices before the effective date of this Circular but the dossier handling deadline comes after the effective date of this Circular.

Any problems arising in the course of implementation should be reported to the Ministry of Finance for timely modification and supplementation.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN