Decision No. 05/2012/QD-TTg dated January 19, 2012 of the Prime Minister on pilot value-added tax refund for goods purchased in Vietnam by foreigners and brought upon departure through Noi Bai international airport or Tan Son Nhat international airport

THE PRIME MINISTER

Decision No. 05/2012/QD-TTg of January 19, 2012, on pilot value-added tax refund for goods purchased in Vietnam by foreigners and brought upon departure through Noi Bai international airport or Tan Son Nhat international airport

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 3, 2008 Law on Value Added Tax;

Pursuant to the November 29, 2006 Law on Tax Administration;

At the proposal of the Minister of Finance,

DECIDES:

Article 1. Scope of regulation

This Decision provides subjects, places, procedures and duration of the pilot value-added tax refund for goods purchased in Vietnam by foreigners and brought upon departure through Noi Bai international airport or Tan Son Nhat international airport.

Article 2. Subjects of application

This Decision applies to foreigners who purchase goods in Vietnam and bring them upon departure through Noi Bai international airport or Tan Son Nhat international airport (below collectively referred to as foreigners); customs offices and tax agencies; customs and tax officers; business establishments and commercial banks selected to participate in the pilot value-added tax refund; and other agencies, organizations and individuals participating in the pilot value-added tax refund under this Decision.

Article 3. Foreigners and goods eligible for tax refund

1. Foreigners eligible for value-added tax refund under this Decision are those who:

a/ Have passports not granted by competent Vietnamese state agencies;

b/ Are not crew members of flights leaving Vietnam to foreign countries.

2. Goods eligible for value-added tax refund under this Decision must fully satisfy the following conditions:

a/ Being subject to value-added tax, unused and allowed to be taken on aircraft under aviation security and safety regulations;

b/ Being not on the list of goods banned or restricted from export;

c/ Having invoice cum tax refund declarations issued within 30 days prior to departure;

d/ The value of goods recorded in invoices cum tax refund declarations purchased at 01 (a) store in 01 (a) day (including the value summed up from many invoices in 01 (a) day at 01 (a) store) is at least VND 02 (two) million.

Article 4. Conditions and the selection of business establishments and commercial banks to participate in the pilot value-added tax refund

1. Conditions and the selection of business establishments to participate in the pilot value-added tax refund

a/ To participate in the implementation of this Decision, business establishments must fully satisfy the following conditions:

- Being established and operating under Vietnamese laws; trading in goods items eligible for tax refund specified in Clause 2, Article 3 of this Decision; and having business locations in Hanoi, Ho Chi Minh City or the centers of handicraft villages being the destinations of tourist tours;

- Observing regulations on accounting, invoices and documents; and declaring and paying value-added tax by the credit method.

b/ Business establishments fully satisfying the conditions stated at Point a of this Clause shall register with the Ministry of Finance so as to be considered and selected to participate in the implementation of this Decision.

2. Commercial banks established and operating under the Law on Credit Institutions shall be selected by the Ministry of Finance in coordination with the State Bank of Vietnam as tax refund agents to participate in the implementation of this Decision.

Article 5. Places of goods inspection and invoice-cum-tax refund declaration examination and places of value-added tax refund

1. Places of goods inspection and invoice-cum-tax declaration examination are located in the areas for carrying out check-in procedures in Noi Bai international airport and Tan Son Nhat international airport and must satisfy the following conditions:

a/ Having sufficient areas for arranging and inspecting goods and examining invoices cum tax refund declarations;

b/ Having separate counters (or kiosks) satisfying safety and order requirements.

2. Places of value-added tax refund are located in the isolated areas in Noi Bai international airport and Tan Son Nhat international airport with separate counters (or kiosks) and must satisfy the conditions for the management of money and accounting documents under law.

Article 6. Invoice cum tax refund declaration; dossiers and procedures for goods inspection and invoice-cum-tax refund declaration examination; and dossiers and procedures for tax refund

1. Invoices cum tax refund declarations shall be specified by the Ministry of Finance.

Upon selling goods to foreigners, business establishments selected to participate in the implementation of this Decision shall fully write compulsory contents on invoices cum tax refund declarations under the Ministry of Finance’s regulations and hand them to the buyers.

2. Dossiers and procedures for invoice-cum-tax refund declaration examination:

a/ Upon purchasing goods of business establishments defined in Clause 1, Article 4 of this Decision, foreigners shall produce their passports (original) for receiving the invoices cum tax refund declarations of goods they will bring upon departure;

Foreigners shall fully write compulsory contents on invoices cum tax refund declarations under the Ministry of Finance’s regulations.

b/ Before checking in their baggage and getting boarding passes, foreigners shall produce to customs offices in the places defined in Clause 2, Article 5 of this Decision:

- Passport (original);

- Invoice cum tax refund declaration (original) defined at Point c, Clause 2, Article 3 of this Decision;

- Goods actually brought upon departure for which tax refund is requested.

c/ After examining dossiers and inspecting goods stated at Point b of this Clause, a customs officer shall sign and append a mark “inspected” on the invoices cum tax refund declarations, then return them to foreigners.

3. Dossier and procedures for tax refund:

a/ Before boarding on their flights to leave Vietnam, foreigners shall produce to commercial banks selected as tax refund agents in the places defined in Clause 2, Article 5 of this Decision the following papers:

- Passport (original);

- Boarding pass of their flight (original);

- The invoice cum tax refund declaration (original) with the mark “inspected” by the customs office.

b/ After examining the papers stated at Point a of this Clause, the commercial bank selected as a tax refund agent shall keep the invoice cum tax refund declaration and carry out procedures to refund tax to foreigners.

Article 7. Refundable tax amounts, service charge; payment and finalization of refundable tax amounts

1. Determination of tax amounts to be refunded to foreigners:

Tax amount to be refunded to a foreigner = The total refundable value-added tax amount minus (-) service charge for tax refund, in which:

a/ The total refundable value-added tax amount is the value-added amount written on the invoice cum tax refund declaration of goods actually brought upon departure, and examined and certified by the customs office;

b/ Service charge for tax refund is determined under Clause 2 of this Article.

2. Service charge for tax refund must not exceed 15% of the total refundable value-added tax amount and be collected by the commercial bank selected as a tax refund agent for covering tax refund expenses.

The Ministry of Finance shall specify service charge rates and other tax refund expenses stated in this Clause.

3. Payment and finalization of refunded tax amounts and collected service charge.

a/ Commercial banks selected as tax refund agents shall pay to foreigners refunded tax amounts from their own capital;

b/ Tax amounts are refunded in cash. The tax refund currency is Vietnam dong. In case foreigners request to receive refunded tax amounts in a foreign currency, the exchange rate between Vietnam dong and the foreign currency is that announced by the commercial bank selected as a tax refund agent at the time of paying refunded tax amounts;

c/ The Ministry of Finance shall specify the payment and finalization of refunded tax amounts and collected service charge with the state budget by commercial banks selected as tax refund agents.

Article 8. Pilot implementation duration

The pilot implementation of value-added tax refund under this Decision lasts from July 1, 2012, through June 30, 2014.

Article 9. Violation handling

1. Organizations and individuals that make false declarations leading to an increase in refundable tax amounts or commit tax evasion or fraud shall, depending on the severity of their violations, be handled according to the tax administration law.

2. Organizations or individuals causing losses to refunded tax amounts of foreigners under this Decision shall pay compensation for the losses and be handled under law, depending on the severity of their violations.

Article 10. Implementation responsibilities

1. The Ministry of Finance shall:

a/ Guide the implementation of this Decision;

b/ Assume the prime responsibility for, and coordinate with the Ministry of Culture, Sports and Tourism, the Ministry of Industry and Trade and the State Bank of Vietnam, and related agencies and localities in, selecting business establishments and commercial banks as tax refund agents under Article 4 of this Decision;

c/ Assume the prime responsibility for, and coordinate with related ministries and localities in, implementing this Decision; annually review the pilot implementation; and, in the second quarter of 2014, summarize the pilot implementation and propose the official implementation of value-added tax refund for goods purchased in Vietnam by foreigners and brought upon departure.

2. The Ministry of Transport shall:

a/ Assume the prime responsibility for, and coordinate with the Ministry of Finance and the State Bank of Vietnam in, directing the Northern Airports Corporation and Southern Airports Corporation in arranging places, areas and counters (or kiosks) for goods inspection, invoice-cum-tax refund declaration examination, and places of tax refund at Tan Son Nhat international airport and Noi Bai international airport under Article 5 of this Decision;

b/ Coordinate with the Ministry of Finance in organizing the implementation of this Decision.

3. The Ministry of Industry and Trade, the Ministry of Culture, Sports and Tourism, the Ministry of Information and Communications, the Ministry of Foreign Affairs, the Vietnam Chamber of Commerce and Industry, Ha Noi People’s Committee and Ho Chi Minh City People’s Committee shall:

a/ Study and collect information on enterprises, type of goods bought in Vietnam by foreigners and brought upon departure, and coordinate with the Ministry of Finance in selecting business establishments to participate in the implementation of this Decision;

b/  Disseminate and popularize the value-added tax refund policy under this Decision;

c/ Coordinate with the Ministry of Finance in organizing the implementation of this Decision.

4. The State Bank of Vietnam shall coordinate with the Ministry of Finance in selecting commercial banks as tax refund agents and organizing the implementation of this Decision.

Article 11.

1. This Decision takes effect on July 1, 2012.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decision.-

Prime Minister
NGUYEN TAN DUNG