Circular No. 99/2016/TT-BTC dated June 29, 2016 of the Ministry of Finance guiding administration of value-added tax refund

CIRCULAR

Guiding the management of value-added tax refund[1]

Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration; November 20, 2012 Law No. 21/2012/QH13 Amending and Supplementing a Number of Articles of the Law on Tax Administration; and November 26, 2014 Law Amending and Supplementing a Number of Articles of the Laws on Taxes; and their guiding documents;

Pursuant to June 3, 2008 Law No. 13/2008/QH12 on Value-Added Tax; June 19, 2013 Law No. 31/2013/QH13 Amending and Supplementing a Number of Articles of the Law on Value-Added Tax; April 6, 2016 Law No. 106/2016/QH13 Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, the Law on Excise Tax and the Law on Tax Administration; and their guiding documents;

Pursuant to June 25, 2015 Law No. 83/2015/QH13 on the State Budget and its guiding documents;

Pursuant to the Government’s Decree No. 215/2013/ND-CP of December 23, 2013, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the General Director of Taxation.

The Minister of Finance promulgates the Circular guiding the management of value-added tax refund.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Circular guides the management of value-added tax (VAT) refund for taxpayers managed by tax offices in accordance with the Law on the State Budget, the Law on Value-Added Tax, the Law on Tax Administration, and their guiding documents, covering the receipt and settlement of VAT refund requests, examination and inspection of VAT refund; management of estimated funds for VAT refund; and responsibilities of related agencies, organizations and individuals in VAT refund management.

2. Tax refund for goods brought along foreigners and overseas Vietnamese on exit must comply with the guidance in the Ministry of Finance’s Circular No. 72/2014/TT-BTC of May 30, 2014.

3. The refund of mistakenly paid or overpaid VAT amounts must comply with Article 47 of Law No. 78/2006/QH11 on Tax Administration, which was amended and supplemented in Clause 13, Article 1 of Law No. 21/2012/QH13 Amending and Supplementing a Number of Articles of the Law on Tax Administration, and guiding documents.

Article 2. Subjects of application

1. Taxpayers eligible for VAT refund as prescribed in the Law on Value-Added Tax.

2. Tax administration agencies, including:

a/ The General Department of Taxation, Tax Departments, Tax Branches;

b/ The General Department of Customs, Customs Departments, Customs Branches.

3. The State Budget Department - the Ministry of Finance.

4. The State Treasury, provincial- and district-level State Treasury offices.

5. Other state agencies, organizations and individuals engaged in the VAT refund management.

Article 3. Principles of VAT refund management

1. A taxpayer falling into a case eligible for VAT refund as prescribed in the Law on Value-Added Tax shall determine its/his/her creditable or refundable VAT amount, fill in a tax refund request and make and send a tax refund dossier to its/his/her managing tax office.

2. The VAT refund must comply with law and follow the order and procedures prescribed in Article 59 of November 29, 2006 Law No. 78/2006/QH11 on Tax Administration (below referred to as Tax Administration Law No. 78/2006/QH11) and Clause 18, Article 1 of November 20, 2012 Law No. 21/2012/QH13 Amending and Supplementing a Number of Articles of the Law on Tax Administration (below referred to as Tax Administration Law No. 21/2012/QH13) and their guiding documents.

3. To apply risk management principles in the settlement of VAT refund requests as prescribed in Clause 1, Article 1 of  Tax Administration Law No. 21/2012/QH13; Clause 2, Article 1 of April 6, 2016 Law No. 106/2016/QH13 Amending and Supplementing a Number of Articles of the Law on Value-Added Tax, the Law on Excise Tax and the Law on Tax Administration (below referred to as Law No. 106/2016/QH13) and guiding documents.

4. Tax offices shall apply information technology in accordance with the law on e-transactions to the receipt and settlement of tax refund requests and management of  VAT refund and connect and exchange information with related agencies in the settlement of tax refund requests of taxpayers.

Article 4. Funds for VAT refund

1. Funds for VAT refund shall be allocated in the annual state budget estimates decided by the National Assembly.

2. The General Director of Taxation shall manage funds for VAT refund and administer the payment of VAT refunds within the state budget estimates approved by competent authorities.

3. Tax Department Directors shall manage and use funds for VAT refund to pay refunds to taxpayers according to their competence and take responsibility for the issuance of tax refund decisions in accordance with law.

Article 5. Databases and application of information technology in VAT refund management

1. The VAT refund database is a system of data and information on taxpayers eligible for tax refund and a component of the tax sector’s tax administration database system. The building of the VAT refund database as well as the collection, processing, use, sharing, preservation and keeping of confidentiality of the database’s information must comply with current regulations.

2. Tax offices shall apply information technology in VAT refund management, covering the receipt and processing of tax refund dossiers, notification of results of processing of tax refund dossiers, and exchange of information with related agencies in the course of settlement of tax refund requests.

Article 6. Application of risk management in VAT refund management

1. The assessment of risks in the VAT refund management must comply with Clause 1, Article 1 of Tax Administration Law No. 21/2012/QH13 and the Ministry of Finance’s Circular No. 204/2015/TT-BTC of December 21, 2015, on risk management in tax administration (below referred to as Circular No. 204/2015/TT-BTC).

2. Risk management in the VAT refund management

a/ VAT refund dossiers shall be classified into 2 categories, including dossiers entitled to tax refund prior to inspection and dossiers subject to inspection prior to tax refund as prescribed in Clause 1, Article 1 of Tax Administration Law No. 21/2012/QH13 and Clause 3, Article 1 of Law No. 106/2016/QH13. Tax offices shall conduct inspection before paying tax refunds for high-risk tax refund dossiers.

b/ The formulation of post-VAT refund inspection and examination plans must comply with Clause 18, Article 1 of Tax Administration Law No. 21/2012/QH13, Clause 4, Article 41 of Decree No. 83/2013/ND-CP; post-VAT refund inspection shall be carried out according to the risk management principles within 10 years after tax refund decisions are issued.

Article 7. Application of customs measures to a number of cases of high tax risks

1. Customs offices shall provide information on customs declarations and other relevant information to tax offices via the e-portal of the General Department Customs according to the Regulation on information exchange and coordination between customs offices and tax offices. Customs offices shall take responsibility for information on imported and exported goods in customs declarations as prescribed in the laws on customs and tax administration.

In case a taxpayer’s customs declaration does not exist in the customs sector’s database, the tax office shall request in writing the concerned customs office to provide the declaration so as to have grounds for refunding VAT to the taxpayer.

2. On the basis of risk analysis and assessment results and VAT refund management requirements or if detecting signs of violation of the tax and customs laws through inspection, tax offices shall provide information on taxpayers’ violation to customs offices for the latter to conduct customs inspection and supervision in accordance with regulations.

On the 20^th day of the month following every quarter or whenever necessary, the General Department of Taxation shall request in writing the General Department of Customs apply streamlining criteria so as to inspect and supervise imported and exported goods with high tax risks. A written request must clearly state criteria for identifying and methods of inspecting and supervising imported and exported goods; commodity items; areas and sectors of import and export activities in conformity with the Customs Law.     

The General Department of Customs shall start applying streamlining criteria and inspection and supervision methods to imported and exported goods within 5 (five) working days after receiving a written request from the General Department of Taxation. In case of not applying these criteria and methods or if encountering any problems, the General Department of Customs shall send its opinions to the General Department of Taxation within the above-said time limit, clearly stating the reason for non-application or delayed application.

Article 8. Application of tax refund management methods to a number of cases of high tax risks

1. In case a tax office, through tax examination or inspection, detects that a taxpayer has purchased goods or services from another taxpayer (goods or service supplier) that commits tax evasion or tax fraud, the tax office shall incorporate the goods or service supplier into its examination and inspection plan or request the tax office managing the goods or service supplier to supplement its examination and inspection plan and conduct the examination and inspection of the goods or service supplier or provide information on observance of the tax law by the goods or service supplier so as to have grounds for tax refund.

2. In case a taxpayer has a payment transaction involving an organization or individual with suspicious transactions indicated in the warning list of the banking supervisory agency or in case a tax office, through tax examination or inspection, detects that a taxpayer’s via-bank payment document is incomplete or improperly made:

a/ The tax office shall request in writing the concerned credit institution or payment intermediary service provider to provide information (including account statements) of the payer (transferor) and beneficiary named in the document (or individuals related to the beneficiary) so as to have grounds for VAT refund;

b/ The tax office shall request in writing the concerned border-gate customs office to provide information on the amount of cash (in a foreign currency or Vietnam dong) brought into Vietnam via the border gate; the border-gate customs office shall reply to such request with 5 (five) working days after receiving it for the tax office to have grounds for refund of VAT for goods exported via land border gates in accordance with regulations.

3. In case a tax office, through tax examination or inspection, detects that a taxpayer shows signs of tax evasion or tax fraud as prescribed by the tax law and signs of crime, the tax office shall transfer the dossier to a public security agency for handling in accordance with the Criminal Procedure Code.

4. Past the time limit for tax examination and inspection, if the tax office receives no reply or verification results from related agencies prescribed in this Article:

a/ In case the dossier is subject to inspection prior to tax refund and the tax office determines that the refundable tax amount differs from the tax amount requested to be refunded:

- If the requested amount is larger than the refundable amount, the taxpayer shall be refunded an amount equal to the refundable amount.

- If the requested amount is smaller than the refundable amount, the taxpayer shall be refunded an amount equal to the requested amount.

In case the tax office can determine that a tax amount is refundable, it shall refund such amount immediately to the taxpayer without having to wait until the whole dossier is examined and verified; for tax amounts which need further examination and verification, the tax office shall request the taxpayer to give explanation or supplement the dossier and refund such tax amounts when all prescribed conditions are satisfied.

b/ In case the tax office conducts post-tax refund examination or inspection, it shall complete the examination or inspection within the prescribed time limit. Pending related agencies’ replies on, and results of verification of, a refunded tax amount, the tax office shall clearly state in the examination record or inspection conclusion that grounds for conclusion on the refundability of the tax amount remain insufficient. After receiving replies and verification results from related agencies, if the tax office determines that the refunded tax amount is non-refundable, it shall issue a decision to recover the refunded tax amount and sanction the taxpayer in accordance with law.

Article 9. Responsibilities of tax offices in the receipt and processing of VAT refund dossiers

1. The tax office directly managing a taxpayer shall receive the VAT refund dossier of such taxpayer.

2. The taxpayer’s tax refund dossier shall be processed by the Tax Department, which shall classify the dossier, determine the taxpayer’s refundable VAT amount and tax debts, fines and late-payment interests to be offset against the refundable VAT amount; propose the refund, appraise the tax refund dossier, issue a tax refund decision, and pay the refund to the taxpayer, except the case prescribed in Clause 3 of this Article.

3. In case the taxpayer is managed by a Tax Branch under the Tax Department of Hanoi, Ho Chi Minh City, Binh Duong or Dong Nai province, such Tax Branch shall classify the taxpayer’s tax refund dossier, determine the taxpayer’s refundable VAT amount and tax debts, fines and late-payment interests to be offset against the refundable VAT amount, and propose the tax amount to be refunded before forwarding the dossier to the Tax Department for the latter to appraise the dossier, issue a tax refund decision and pay the refund to the taxpayer.

Chapter II

VAT REFUND PROCESS

Article 10. Making and sending tax refund dossiers

1. A VAT refund dossier must comprise:

- A written request for refund of a state budget revenue (form No. 01/DNHT issued together with the Ministry of Finance’s Circular No. 156/2013/TT-BTC of November 6, 2013, guiding the Tax Administration Law (below referred to as Circular No. 156/2013/TT-BTC).

- Other documents as prescribed in Articles 50 thru 56 (except Article 53) of Circular No. 156/2013/TT-BTC.

2.  A taxpayer that is an enterprise or organization and meets all conditions on VAT credit and refund as prescribed by the laws on VAT and tax administration shall make and send a VAT refund dossier to its managing tax office.

In case a branch or dependent unit specified in Clause 1, Article 45 of Enterprise Law No. 68/2014/QH13, which is not an accounting unit subject to financial statement formulation under Clause 4, Article 3 of Accounting Law No. 88/2015/QH13, requests VAT refund, its VAT refund dossier must also comprise a written authorization of the head office in accordance with the law on authorization.

3. Taxpayers may send tax refund e-dossiers or submit directly or send by post paper dossiers to tax offices, specifically:

a/ Taxpayers may send tax refund e-dossiers via the General Department of Taxation’s e-portal from the time the tax offices accept electronic tax refund transactions as prescribed in the Ministry of Finance’s Circular No. 110/2015/TT-BTC of July 28, 2015, guiding e-transactions in the field of taxation (below referred to as Circular No. 110/2015/TT-BTC).

b/ Taxpayers may directly submit or send by post paper dossiers to their managing tax offices.

4. In case a taxpayer has sent a tax refund dossier to a tax office but later submits a request for cancellation of its/his/her tax refund request, the taxpayer may make an additional declaration so as to have the requested tax amount credited against the VAT declaration of the tax declaration period following the period when the taxpayer submits the request for cancellation of the tax refund request, provided that all conditions for VAT credit are met.

Article 11. Receipt of tax refund dossiers

1. Receipt of an electronic tax refund dossier

a/ The General Department of Taxation’s e-portal shall receive the dossier automatically.

b/ The tax administration application system shall automatically record the dossier and forward it to a tax office for processing as prescribed in Clauses 2 and 3, Article 9 of this Circular; and at same time, send a notice of certification of submission of an electronic tax refund dossier (made according to form No. 01/TB-TDT issued together with Circular No. 110/2015/TT-BTC) to the taxpayer and its/his/her managing tax office via the General Department of Taxation’s e-portal.

2. Receipt of a paper tax refund dossier

a/ In case the dossier is submitted directly at a tax office:

The “single-window” section of the tax office managing the taxpayer shall receive the dossier and check its completeness in accordance with regulations. In case the dossier is incomplete, the “single-window” section shall notify and guide the taxpayer to complete the dossier. In case the dossier is complete, the “single-window” section shall record the receipt of the dossier to the tax administration application system.

b/ In case the dossier is sent by post:

The administrative and clerical section of the tax office managing the taxpayer shall receive the taxpayer’s tax refund dossier and record the receipt of the dossier in the correspondence logbook according to regulations and then forward the dossier to the “single-window” section for processing as prescribed at Point a of this Clause.

c/ The Tax Branch which receives the dossier shall send the dossier to the Tax Department responsible for processing it as prescribed in Clause 2, Article 9 of this Circular right on the working day when it receives the dossier or by the subsequent working day at the latest.

d/ In case the dossier shall be processed by a Tax Branch as prescribed in Clause 3, Article 9 of this Circular: the “single-window” section shall forward the dossier to the Tax Branch’s tax refund request settlement section right on the working day when it receives the dossier or by the subsequent working day at the latest.

3. Time of receipt of a tax refund dossier

a/ In case the dossier is an electronic dossier: it is the date stated in the notice of certification of submission of an electronic tax refund dossier as prescribed at Point b, Clause 1 of this Article.

b/ In case the dossier is submitted directly or sent by post to a tax office: it is the date of dossier submission determined under the guidance at Points b and c, Clause 1, Article 58 of Circular No. 156/2013/TT-BTC.

Article 12. Classification of tax refund dossiers

1. Tax offices shall classify VAT refund dossiers in accordance with Clauses 1 and 18, Article 1 of Tax Administration Law No. 21/2012/QH13; and Clause 3, Article 1 of Law No. 106/2016/QH13, specifically:

a/ A dossier subject to inspection prior to tax refund is a dossier falling into one of the following cases:

- Tax refund in accordance with a treaty to which the Socialist Republic of Vietnam is a contracting party, except cases of tax refund for foreign carriers in accordance with agreements on avoidance of double taxation.

- The taxpayer requests tax refund for the first time.

In case the taxpayer has once submitted a tax refund dossier to a tax administration agency but its/his/her dossier is ineligible for tax refund, its/his/her subsequent tax refund request shall still be regarded as first-time tax refund request.

- The taxpayer requests tax refund within 2 (two) years after it/he/she is sanctioned by a tax administration agency for tax evasion or tax fraud.

In case the taxpayer requests tax refund for several times within 2 (two) years after being sanctioned for tax evasion or tax fraud and at the first time it/he/she requests tax refund, the tax office, after examining its/his/her tax refund dossier, can neither find errors leading to a decrease in the payable tax amount or an increase in the refundable tax amount as prescribed in Clause 33, Article 1 of Tax Administration Law No. 21/2012/QH13 nor detect tax evasion or tax fraud as prescribed in Article 108 of the Tax Administration Law and Clause 34, Article 1 of  Tax Administration Law No. 21/2012/QH13, from the second time onwards, the taxpayer’s tax refund dossiers shall no longer be subject to inspection prior to tax refund. Upon the taxpayer’s subsequent requests, in case the tax office detects that the taxpayer wrongly declares the tax refund dossier or commits tax evasion or tax fraud as prescribed in Clauses 33 and 34, Article 1 of Tax Administration Law No. 21/2012/QH13 and Article 108 of Tax Administration Law No. 78/2006/QH11, the taxpayer’s refund dossiers shall still be subject to inspection prior to tax refund for 2 (two) years after it/he/she is sanctioned for tax evasion or tax fraud.

- The taxpayer who produces or trades in exported goods requests tax refund within 2 (two) years after being sanctioned by state management agencies for smuggling, illegal cross-border transportation of goods or trade fraud.

The tax office shall base itself on the related state management agency’s decision on sanctioning the act of smuggling, illegal cross-border transportation of goods or trade fraud available in the tax refund management database at the time of evaluation to classify whether the tax refund dossier is subject to inspection prior to tax refund. The time limit of 2 (two) years shall be counted from the date a competent state agency issues a decision on sanctioning the act of smuggling, illegal cross-border transportation of goods or trade fraud.

- The taxpayer is an enterprise having undergone merger, consolidation, splitting, dissolution, bankruptcy, ownership transformation or operation termination; or a state enterprise which is assigned, sold, contracted or leased;

- The taxpayer bears a high risk as prescribed by the Law on Tax Administration. High-risk taxpayers are taxpayers that are evaluated and graded as taxpayers with high or very high risks and taxpayers that have been operating for less than 12 months as guided in Circular No. 204/2015/TT-BTC.

- Past the time limit stated in the tax office’s notice, the taxpayer still fails to give explanation or add information and documents as required in such notice or has given explanation or has added information and documents but still cannot prove that the tax amount it/he/she has declared is correct.

b/ Tax refund dossiers entitled to tax refund prior to inspection are dossiers other than those specified at Point a of this Clause.

2. In case a tax refund dossier is classified as being subject to inspection prior to tax refund, the tax office shall send to the taxpayer a notice of change of the classification of the dossier into inspection prior to tax refund (made according to form No. 01/HT-TB issued together with Circular No. 156/2013/TT-BTC) within 6 (six) working days after receiving the complete dossier as prescribed at Point a, Clause 3, Article 58 of Circular No.156/2013/TT-BTC. In case the taxpayer carries out tax refund procedures by electronic mode, the notice shall be sent to the taxpayer via the General Department of Taxation’s e-portal.

Article 13. Determination of refundable VAT amounts of taxpayers

1. For a tax refund dossier which is entitled to tax refund prior to inspection

The tax office shall base itself on the taxpayer’s tax refund dossier and information on the taxpayer which is managed by tax administration agencies at the VAT refund database to check the eligibility for tax refund, specifically:

a/ If the taxpayer’s tax refund dossier is ineligible for tax refund as prescribed in the Law on Value-Added Tax and the Law on Tax Administration, within 3 (three) working days after receiving the complete dossier, the tax office shall issue and send to the taxpayer a notice of ineligibility for tax refund (made according to form No. 02/HT-TB issued together with Circular No. 156/2013/TT-BTC). In case the taxpayer carries out tax refund procedures by electronic mode, the notice shall be sent to the taxpayer via the General Department of Taxation’s e-portal.

b/ If the taxpayer’s tax refund dossier is eligible for tax refund, the tax office shall compare the VAT amount requested to be refunded stated in the tax refund dossier with the taxpayer’s tax declaration dossier. To be refundable, a tax amount must have been declared in accordance with the Law on Tax Administration and guiding documents and meet all conditions for tax credit and tax refund prescribed in Clauses 6 and 7, Article 1 of June 19, 2013 Law No. 31/2013/QH13 on Value-Added Tax (below referred to as Value-Added Tax Law No. 31/2013/QH13) and guiding documents.

c/ If the tax office has not yet obtained sufficient information to determine whether the taxpayer’s tax refund dossier is eligible for tax refund, within 3 (three) working days after receiving the taxpayer’s tax refund dossier, it shall send to the taxpayer a request for explanation or addition of information and documents (made according to form No. 01/KTTT issued together with Circular No. 156/2013/TT-BTC) as prescribed in Clause 2, Article 60 of Circular No. 156/2013/TT-BTC. In case the taxpayer carries out the tax refund procedures by electronic mode, the notice shall be sent to the taxpayer via the General Department of Taxation’s e-portal. Within 10 (ten) working days after the tax office sends the request, the taxpayer shall send its/his/her explanations or additional information and documents as requested. Past the above time limit, the tax office shall change the classification of the dossier into inspection prior to tax refund.

- In case information relating to the determination of the refundable VAT amount is managed by a state agency which has a regulation on information exchange and coordination with tax offices, the tax office may not request the taxpayer to give explanation or add information and documents.

- In case the taxpayer has given explanation or has added information and documents but still cannot prove that the tax amount it/he/she declares is correct or past the time limit set by the tax office but the taxpayer still fails to give explanation or supplement its/his/her tax refund dossier as prescribed in Clause 2, Article 58 of Circular No. 156/2013/TT-BTC: the head of the tax office shall approve the change of the classification of the taxpayer’s dossier from “tax refund prior to inspection” to “inspection prior to tax refund” and, at the same time, send a notice of change of the classification of the dossier into inspection prior to tax refund (made according to form No. 01/HT-TB issued together with Circular No. 156/2013/TT-BTC) to the taxpayer within 6 (six) working days after receiving such dossier as prescribed at Point a, Clause 3, Article 58 of Circular No. 156/2013/TT-BTC.

d/ The period of time from the date the tax office issues a request for explanation or supplementation to the date the tax office receives the written explanation or additional documents from the taxpayer shall not be counted into the time limit for tax refund dossier processing.

2. In case the tax refund dossier is subject to inspection prior to tax refund

a/ The tax office shall conduct examination or inspection at the taxpayer’s head office in accordance with Articles 78, 79 and 80 of the Tax Administration Law No.  78/2006/QH11, its guiding documents and the tax sector’s tax examination and inspection processes. Based on tax examination or inspection results, the tax office shall determine the taxpayer’s refundable tax amount. To be refundable, a tax amount must have been declared in accordance with the Law on Tax Administration and guiding documents and meet the conditions for tax credit and refund prescribed in Clauses 6 and 7, Article 1 of Value-Added Tax Law No. 31/2013/QH13 and guiding documents.

b/ In the course of tax examination and inspection, the tax office shall apply the measures specified in Articles 7 and 8 of this Circular so as to have grounds for determining the taxpayer’s refundable VAT amount.

3. In the course of settling a tax refund request, if the tax office, through tax examination or inspection, detects that the taxpayer shows sign of violation and then transfers the dossier to an investigating body or if the taxpayer’s account books and documents relating to the tax amount requested to be refunded is seized by a competent state agency, the tax office shall inform the taxpayer of its/his/her dossier’s ineligibility for tax refund. The tax office shall settle the tax refund request after receiving the results or opinions of the concerned public security agency or competent agency or receiving a complete dossier as prescribed.

Article 14. Determination of tax debts, late-payment interests and fines to be offset against refundable VAT amounts

1. Tax offices shall determine taxpayers’ tax amounts, late-payment interests, fines and other amounts owed to the state budget (below referred to as tax debts) so as to offset them against taxpayers’ refundable VAT amounts.  

2. A taxpayer’s tax debts (excluding tax debts for which write-off procedures are being carried out and tax debts which are permitted to be repaid in installments as prescribed in Articles 32 and 39 of the Government’s Decree No. 83/2013/ND-CP of July 22, 2013, detailing a number of articles of the Law on Tax Administration and the Law Amending and Supplementing a Number of Articles of the Law on Tax Administration) which shall be offset against the taxpayer’s refundable tax amount include:

a/ Tax debts managed by the tax sector on the tax administration application system;

b/ Tax debts (excluding customs charges and fees) according to information provided by customs offices in accordance with the Regulation on information exchange and coordination between customs offices and tax offices;

c/ Tax debts owed to the state budget as stated in written requests of competent agencies and organizations in accordance with law.

3. In case the refundable tax amount of a taxpayer being the head office of an enterprise, after being offset against its tax debt in accordance with Clause 2 of this Article, remains positive but one of the taxpayer’s dependent cost-accounting branches has a tax debt which has become overdue for more than 90 days and is managed by a tax office on the tax administration application system, the tax office shall further offset such tax debt against the remainder of the taxpayer’s refundable tax amount. In case many dependent cost-accounting branches of the taxpayer have tax debts, these tax debts shall be offset against the remainder of the taxpayer’s refundable tax amount with priority given to the debt which has become overdue for the longest time period.

In case a dependent cost-accounting branch has a refundable tax amount, such amount shall be offset against its head office’s tax debt which has become overdue for more than 90 days.

4. The tax office directly managing a taxpayer shall take responsibility for information on the taxpayer’s tax debts on the tax administration application system; agencies and organizations which request the offsetting of tax debts owed to the state budget shall take responsibility for the data they provide to the tax office.

5. In case a taxpayer requests in writing a tax office to set aside its/his/her refundable tax amount to repay a tax debt owed to the state budget for another taxpayer, the tax office shall determine and offset the taxpayer’s refundable tax amount (the remainder left after offsetting against its/his/her own tax debt according to Clauses 2, and 3 of this Article) against the tax debt of the other taxpayer.

6. After receiving a decision on tax-refund-cum-offsetting against the state budget revenue as prescribed in this Article, if the taxpayer has any questions about the tax debt already offset against the refundable tax amount, the tax office managing the taxpayer and the customs office or agency or organization that has requested the offsetting shall answer to the taxpayer’s questions.

In case the tax debt amount which has been offset against the refundable tax amount is higher than the actual tax debt amount, the difference shall be regarded as an overpaid amount. The tax office and customs office shall handle such amount in accordance with Clause 13, Article 1 of Law No. 21/2012/QH13 or the agency or organization having requested the offsetting shall handle such amount in accordance with relevant laws.

Article 15. Tax refund proposals

1. A tax office shall, based on the result of determination of a taxpayer’s refundable VAT amount, non-refundable VAT amount, to-be-offset tax debt and to-be-refunded VAT amount, make a tax refund proposal and a tax refund decision (or a decision on tax refund-cum-offsetting against the state budget revenue) or a notice of non-eligibility for tax refund (if any).

2. Tax offices shall check and update to the tax administration application system information relating to VAT declaration dossiers, tax refund dossiers, tax refund inspection records (if any), decisions on handling of tax-related violations detected through inspection and examination of tax law observance (if any), tax refund proposals, draft tax refund decisions (or decisions on tax refund-cum-offsetting against the state budget revenue), and notices of non-eligibility for tax refund (if any).

Article 16. Appraisal of tax refund dossiers

1. Tax offices shall appraise tax refund dossiers with regard to tax refund proposals, draft tax refund decisions (or decisions on tax refund-cum-offsetting against the state budget revenue) and notices of non-eligibility for tax refund (if any) before issuing tax refund decisions (or decisions on tax refund-cum-offsetting against the state budget revenue).

The time limit for completing the appraisal of a tax refund dossier is 1 (one) working day, for dossiers eligible for tax refund prior to inspection, or 3 (three) working days, for dossiers subject to inspection prior to tax refund, from the date of receiving a complete dossier of request for appraisal.

2. Tax Departments shall appraise tax refund procedures, tax refund dossiers, subjects and cases of eligibility for tax refund, competence to issue tax refund decisions and other related contents.

a/ If a tax office, through appraisal, detects that a tax refund dossier has unclear or incomplete contents, within the appraisal time limit, it shall work with sections engaged in the processing of the tax refund dossier so as to reach agreement on contents related to appraisal of the tax refund dossier; or may refuse to appraise the dossier if it is incomplete or has not yet been updated to the tax administration application system under Article 15 of this Circular.

b/ In case appraisal results show that the tax refund procedures, tax refund dossier, subject and case of eligibility for tax refund, and competence to issue the tax refund decision are conformable with regulations, the tax office shall update VAT refund appraisal results to the tax administration application system.

Article 17. Supervision of tax refund dossiers

1. Based on professional regulations on tax administration, tax refund process and VAT refund management database, the General Director of Taxation shall build a system for automatic supervision of VAT refund by tax offices suitable to each period of modernization of the tax administration system, ensuring completeness, accuracy and compliance with tax administration regulations.

2. The General Department of Taxation shall supervise tax refund dossiers on the tax administration application system in an automatic manner. In the course of supervision, if the tax administration application system determines that a tax refund dossier is unqualified for issuance of a tax refund decision or decision on tax refund-cum-offsetting against the state budget revenue, the tax administration application system shall automatically notify the Tax Department concerned of the reason and jobs to be proceeded with for the latter to perform such jobs or request the taxpayer to perform such jobs.

3. Supervision results shall be automatically updated to the tax administration application system.

Article 18. Issuance of tax refund decisions

1. Based on results of the appraisal and supervision of a tax refund dossier under Articles 16 and 17 of this Circular, the Director of the Tax Department shall consider the issuance of a tax refund decision (according to form No. 01/QD-HT) or a decision on tax-refund-cum-offsetting against the state budget revenue (form No. 02/QD-HT) or a decision on non-eligibility for tax refund (form No. 02/HT-TB provided in Circular No. 156/2013/TT-BTC). The Tax Department Director shall take responsibility for his/her tax refund decision in accordance with law.

2. The time limit for issuance of a tax refund decision or a decision tax-refund-cum-offsetting against the state budget revenue is 6 (six) working days, for dossiers entitled to tax refund prior to inspection, or 40 (forty) days, for dossiers subject to inspection prior to tax refund, counting from the date of receiving a complete tax refund dossier from the taxpayer.

3. The tax refund decision shall be sent to the taxpayer and related agencies and organization. In case the taxpayer carries out the tax refund procedures by electronic mode, the tax refund decision or decision on tax-refund-cum-offsetting against the state budget revenue shall be sent via the General Department of Taxation’s e-portal under Article 28 of Circular No. 110/2015/TT-BTC.

Article 19. Payment of tax refunds to taxpayers

1. Based on a tax refund decision or decision on tax refund-cum-offsetting against the state budget revenue, the Tax Department shall make an order of refund of a state budget revenue or an order of refund-cum-offsetting against the state budget revenue according to the form issued together with the Ministry of Finance’s Circular No. 08/2013/TT-BTC of January 10, 2013, providing state accounting instructions applicable to the budget management and treasury operation information system (which was amended and supplemented in Decision No. 759/QD-BTC of April 16, 2013, correcting Circular No. 08/2013/TT-BTC) and send it to the provincial-level State Treasury office, enclosed with the tax refund decision or the decision on tax refund-cum-offsetting against the state budget revenue.

In case the taxpayer wishes to have its/his/her refundable tax amount offset against the tax debt of another taxpayer under Clauses 3 and 5, Article 14 of this Circular, the tax office shall make an order of refund-cum-offsetting against the state budget revenue, clearly stating the name and tax identification number of the taxpayer whose debt will be offset against, which will serve as a basis for the State Treasury office to account the collected state budget revenue.

2. The provincial-level State Treasury office shall receive the tax refund decision and the order of refund of a state budget revenue (or decision on tax refund-cum-offsetting against the state budget revenue and the order of refund-cum-offsetting against the state budget revenue) sent by the Tax Department and:

a/ Compare the tax refund decision and the order of refund of a state budget revenue (or decision on tax refund-cum-offsetting against the state budget revenue and the order of refund-cum-offsetting against the state budget revenue) so as to ensure consistency of information relating to the money amount, name of the taxpayer eligible to receive the refunded tax amount, bank address, account and bank information; and information for accounting of the state budget revenue.

b/ Examine the lawfulness of the order of refund of a state budget revenue/order of refund-cum-offsetting against the state budget revenue so as to ensure consistency with seal and signature specimens (or examine whether digital signatures are successfully certified by the State Treasury’s information system).

c/ Pay the refund to the taxpayer within 3 (three) working days after receiving the order of refund of a state budget revenue/order of refund-cum-offsetting against the state budget revenue from the tax office.

3. The provincial-level State Treasury office shall transfer a sheet of the order of refund of a state budget revenue/order of refund-cum-offsetting against the state budget revenue to the tax office at the same level right on the date of accounting or the following working day as prescribed in Circular No. 08/2013/TT-BTC and relevant guiding documents.

In case the tax office and the State Treasury office has applied measures to exchange information on accounting of refunded tax amounts and state budget revenues accounting by electronic mode, regulations on e-transactions of the General Department of Taxation and the State Treasury shall apply.

Article 20. Publicization of information on settlement of tax refund requests

1. Taxpayers that carry our the tax refund procedures by electronic mode may search for information on the settlement of their tax refund requests by tax offices under Circular No. 119/2013/TT-BTC.

2. Tax offices shall publish on the General Department of Taxation’s e-portal information on:

- Time of receiving tax refund dossiers; time of receiving written explanations or additional information and documents from taxpayers.

- Time of issuing notices and decisions on settlement of tax refund requests.

Article 21. Post-tax refund examination and inspection of taxpayers

1. Tax offices shall formulate and implement post-tax refund examination and inspection plans under Clause 18, Article 1 of Tax Administration Law No. 21/2012/QH13.

2. Tax offices shall base themselves on risk evaluation results prescribed in Article 6 of this Circular to select dossiers which are eligible for tax refund prior to inspection but show signs of a high risk and include them in annual post-tax refund examination and inspection plans and conduct post-tax refund examination and inspection within the time limit prescribed in Clause 18, Article 1 of Tax Administration Law No. 21/2012/QH13.

3. If results of post-tax refund examination and inspection at a taxpayer’s head office show that the refund of a tax amount does not comply with regulations, the tax office shall issue a decision to recover the tax amount refunded to the taxpayer, sanction the taxpayer’s violation and calculate a late-payment interest in accordance with regulations.

Chapter III

MANAGEMENT OF FUNDS FOR VAT REFUND

Article 22. Estimation of funds for VAT refund

1. The estimation of funds for VAT refund must comply with the Law on Value-Added Tax, the Law on Tax Administration and the Law on the State Budget.

The process of, and forms for use in, the estimation of funds for VAT refund must comply with regulations of formulation of state budget estimates.

2. Tax Departments shall estimate funds for VAT refund for their provinces or centrally run cities. Based on the estimates of funds for VAT refund made by Tax Departments, the General Department of Taxation shall formulate the estimates of funds for VAT refund nationwide.

3. In the course of paying VAT refunds to taxpayers, if the total of to-be-refunded VAT amounts is higher than the estimated funds approved by competent authorities, the General Department of Taxation shall report such to the Minister of Finance in accordance with the Law on the State Budget.

Article 23. Management and administration of funds for VAT refund

1. The General Department of Taxation shall manage and administer funds for VAT refund and monthly and quarterly (by the 10^th of the first month of the subsequent quarter at the latest) summarize the money amount already spent for VAT refund and proceeds from recovery of refunded VAT amounts nationwide and determine the remainder of the estimated funds for VAT refund.

2. The General Department of Taxation shall provide information  and periodically report on the management and use of funds for VAT refund on the basis of the tax administration information system in a unified manner nationwide, and monthly and quarterly estimate the total of VAT amounts to be refunded nationwide so as to serve the monitoring and administration of the VAT refund work.

3. Annually estimated funds for VAT refund shall be managed and used in accordance with the Law on the State Budget.

Article 24. Accounting records of refunded VAT amounts at the State Treasury

1. Provincial-level State Treasury offices shall record and account refunded VAT amounts in accordance with current regulations on accounting of the state budget.

Monthly and annually, provincial-level State Treasury offices shall compare and certify accounting reports on refunded VAT amounts with tax offices at the same level in accordance with regulations.

2. Monthly and annually, right after closing accounting books, the State Treasury shall provide data on the payment of VAT refunds in each province or centrally run city and all around the country to the General Department of Taxation for the latter to monitor, compare and manage the estimated funds for VAT refund.

Article 25. Accounting of proceeds from recovery of refunded VAT amounts

1. Proceeds from recovery of refunded VAT amounts which have been paid in a budgetary year shall be accounted as an decrease in the funds for VAT refund of such budgetary year.

2. At the end of each working day or on the following working day, provincial-level State Treasury offices shall send a list of documents on recovery of refunded VAT amounts already accounted (in case of e-information exchange) or documents on recovery of refunded VAT amounts already accounted  (in case of exchange of paper documents) to tax offices at the same level for the latter to make domestic tax accounting. State Treasury offices shall compare and certify accounting reports on proceeds from recovery of refunded tax amounts for tax offices at the same level in accordance with regulations.

3. Monthly and annually, right after closing accounting books, State Treasury offices shall provide data on proceeds from recovery of refunded VAT amounts in each province or centrally run city and all around the country to the General Department of Taxation for the latter to monitor, compare and manage the estimated funds for VAT refund.

Article 26. Final accounts of funds for VAT refund

1. The General Department of Taxation shall make final accounts of funds for VAT refund based on the estimates approved by the National Assembly.

2. The General Director of Taxation shall organize the accounting of refunded VAT amounts at tax offices at various levels in accordance with regulations and guide Tax Departments to make final accounts of funds for VAT refund.

3. At the end of a budgetary year and after a period for budget revision, the General Department of Taxation shall make final accounts of funds for VAT refund with the certification of the State Treasury and the State Budget Department for summarization and finalization of the state budget accounts according to regulations.

Chapter IV

RESPONSIBILITIES OF STATE MANAGEMENT AGENCIES IN VAT REFUND MANAGEMENT

Article 27. Responsibilities of tax offices

1. To manage and conduct VAT refund in accordance with the Law on Value-Added Tax, the Law on Tax Administration, the Law on the State Budget, their guiding documents and this Circular.

2. To take the prime responsibility for the exchange of information and coordination with related agencies in the application of measures for VAT refund management.

3. To build a database and apply information technology so as to clear tax refund procedures by electronic mode, apply risk management in VAT refund, supervise VAT refund and support taxpayers in searching for information on the processing of VAT refund dossiers by tax offices on the General Department of Taxation’s e-portal.

4. To estimate funds for VAT refund, manage the estimated funds and pay VAT refunds within the approved estimates, make final accounts of funds for VAT refund and recovery of refunded VAT amounts so as to ensure that the state budget is spent in a safe and strict manner in accordance with law.

Article 28. Responsibilities of customs offices

1. To conduct customs examination and inspection of taxpayers’ imported and exported goods in accordance with the customs law.

2. To exchange information and coordinate with tax offices according to the Regulation on exchange of information and coordination between customs offices and tax offices.

Article 29. Responsibilities of the State Budget Department

1. To assume the prime responsibility for, and coordinate with the General Department of Taxation in, formulating and summarizing the estimates of funds for VAT refund and making final accounts of funds for VAT refund in accordance with the Law on the State Budget.

2. To coordinate with the General Department of Taxation in administering the execution of the estimates of funds for VAT refund approved by the National Assembly. In case the estimated funds are not enough to pay VAT refunds to taxpayers in accordance with the Law on Value-Added Tax and the Law on Tax Administration, to report such to a competent agency in accordance with the Law on the State Budget.

Article 30. Responsibilities of the State Treasury

1. To monitor and control documents on payment of VAT refunds and recovery of refunded VAT amounts according to this Circular.

2. To fully, accurately and promptly account refunded VAT amounts and proceeds from recovery of refunded VAT amounts in accordance with regulations.

3. To coordinate with tax offices in paying VAT refunds to taxpayers within the approved estimated funds for VAT refund.

4. To provide to tax offices data on refunded VAT amounts and proceeds from recovery of refunded VAT amounts in an accurate, timely and adequate manner, sum up funds actually paid for VAT refund and actual proceeds from recovery of refunded VAT amounts in accordance with regulations; monthly, quarterly and annually, compare and certify data with tax offices in accordance with regulations on state budget accounting.

5. To make final accounts of funds for VAT refunds in accordance with the Law on the State Budget.

Chapter V

ORGANIZATION OF IMPLEMENTATION

Article 31. Effect

1. This Circular takes effect on August 13, 2016.

2. From the effective date of this Circular, the following documents cease to be effective:

- The Ministry of Finance’s Circular No. 94/2010/TT-BTC of June 30, 2010, guiding VAT refund for exported goods;

- The Minister of Finance’s Decision No. 2404/QD-BTC of June 30, 2010, promulgating the Regulation on inspection of VAT refund applicable to cases eligible for tax refund prior to inspection;

- The Ministry of Finance’s Circular No. 150/2013/TT-BTC of June 29, 2013, guiding the formation, management and spending of the Fund for Value-Added Tax Refund.

3. Transitional provisions

a/ For dossiers of request for tax refund which are governed by this Circular, have been submitted to tax offices before the effective date of this Circular, meet all conditions for tax refund prescribed in the value-added tax law and the Law on Tax Administration and are being processed by tax offices in accordance with the Law on Tax Administration (tax offices have not yet issued tax refund decisions), provisions on settlement of tax refund claims which are in effect before this Circular takes effect shall apply.

b/ The whole balance of the accounts of estimated funds for VAT refund already allocated to Tax Departments (grade 4) at the time this Circular takes effect shall be recovered into the General Department of Taxation’s account of estimated funds for VAT refund (grade 1) for centralized management at the General Department of Taxation. The State Treasury shall guide in detail the payment of tax refunds and accounting of refunded tax amounts and proceeds from recovery of refunded tax amounts in accordance with this Circular.

4. Other contents not yet guided in this Circular must comply with the current tax laws.

5. In the course of implementation of this Circular, if relevant documents referred to this Circular are amended, supplemented or replaced, amending, supplementing or replacing documents shall apply.

Article 32. Implementation responsibility

1. The General Director of Taxation shall promulgate a tax refund process to be uniformly applied within the tax sector in accordance with the Law on Tax Administration, the Law on Value-Added Tax, the Law on E-Transactions, guiding documents and this Circular; direct, guide and inspect the implementation of such process at tax offices of various levels.

2. The General Department of Taxation shall build a database on  VAT refund, formulate a regulation on coordination and exchange of information with related agencies and apply information technology in communication with related agencies, organizations and individuals so as to manage VAT refund in accordance with this Circular.

3. Heads of tax offices, customs offices, state treasury offices, the State Budget Department and related organizations and individuals shall guide and implement this Circular.

In the course of implementation of this Circular, if meeting with any problems, organizations and individuals should promptly report them to the Ministry of Finance for study and settlement.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN