Official Dispatch No. 13804/BTC-TCT dated September 30, 2016 of the Ministry of Finance on management of VAT refund in ending months of 2016

THEMINISTRY OF FINANCE

Official Dispatch No.13804/BTC-TCT dated September30, 2016of the Ministry of Finance on management of VAT refund in ending months of 2016

To:Departmentsof Taxationofcentral-affiliated citiesor provinces

Pursuant to Article 1 of the Law No.106/2016/QH13dated April 06, 2016 by the National Assembly on amendments to some articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration.

Pursuant toClause 1Article 1 of the Law on Tax AdministrationNo.21/2012/QH13dated November 20, 2012by the National Assembly on amendments to some articles of the Law on Tax Administration.

Pursuant tothe Government’sDecree No. 100/2016/ND-CP dated July 01, 2016 onelaboration and guidelines for some articles of the Law onamendments to some articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration.

Pursuant to theCircular No.130/2016/TT-BTCdated August 12, 2016 by Ministry of Finance guiding the implementation of theGovernment’s Decree No. 100/2016/ND-CP dated July 01, 2016 on elaboration and guidelines for some articles of the Law on amendments to some articles of the Law on Value-added Tax, the Law on Special Excise Duty, and the Law on Tax Administration.

Pursuant to theCircular No.204/2015/TT-BTCdated December 21, 2015 by Ministry of Finance providing for the application of risk management in tax administration.

Pursuant to the Circular No. 99/2016/TT-BTC datedJune 29, 2016by Ministry of Financeon management of value-added tax refund.

Ministry of Finance, based on the said grounds and for the purposes of ensuring the management of the value-added tax (VAT) refund in conformity with prevailing regulations and managing the budget for VAT refund in ending months of 2016 according to the estimate approved by the National Assembly, requests Directors of Departments of Taxation ofcentral-affiliated citiesor provinces to thoroughly grasp and perform the following duties:

1.Provide sufficient and timely guidance for all enterprises in the province under the management of theProvincial Department of Taxationand tax officers for new and important contents of the Law No.106/2016/QH13dated April 06, 2016, the Government’sDecree No. 100/2016/ND-CP dated July 01, 2016,theCircular No.130/2016/TT-BTCdated August 12, 2016,theCircular No.204/2015/TT-BTCdated December 21, 2015 andthe Circular No. 99/2016/TT-BTC datedJune 29, 2016by Ministry of Finance. To be specific:

-Exportedgoods and services:VAT shall not be refunded in cases where exportsare not exported within a customs-controlled area as defined by the Customs Lawandthe Government s Decree No. 01/2015/ND-CP dated January 02, 2015 on the disposition of customs-controlled areas; goods are importedandexportedafterwards; exports are natural resources and minerals without or after further processing into products whose prime cost is comprised of, by at least 51%, the total value of such natural resources and minerals plus the energy cost.

- Investment projects: VAT shall not be refundedin cases wherethe charter capital ofaninvestment project has not been adequately contributed as registered;theinvestment project in a conditional business sector fails to satisfy all of business conditions as prescribed in the Law on Investment or fails to maintain the satisfaction ofallbusiness conditions during its operation;anatural resource or mineral extraction projectislicensed from July 01, 2016 oramanufacturing project where total value of natural resources and/or minerals inclusive of energy cost makes up at least 51% of the product price;

-In case the input VAT accumulated during 12 months or four consecutive quarters has not been completely deducted, VAT shall be refunded to the taxpayer who has remaining deductible input VAT before the tax period of July, 2016 (if VAT is monthly declared) or before the tax period of the 3^rdQuarter of 2016 (if VAT is quarterly declared) and meets all of conditions for tax refund as regulated in Clause 1 Article 18 of Circular No. 219/2013/TT-BTCdated December 31, 2013 by Ministry of Finance.

2.With regard to applications for tax refund submitted before the tax refund period of July, 2016 or the 3^rdQuarter of 2016 in cases mentioned in Point 1 herewith,Provincial Departmentsof Taxationshall conduct tax inspection before refunding tax to applicants in conformity with changes in tax policies.Provincial Departmentsof Taxationmust update the Tax Management System (TMS) with applications for tax refund and their tax inspection results in a timely and sufficient manner in order that the General Department of Taxation may keep supervision thereof beforeProvincial Departmentsof Taxationmake decisions on tax refund.

The General Department of Taxation shall, for every 10 days, report to the Ministry of Finance of inspection results for refunding VAT to said taxpayers.

3. Provincial Departmentsof Taxationshall base on regulations in the Law No.106/2016/QH13, the Law No.21/2012/QH13on tax management and their instructional documents to classify applications for VAT refund other than those regulated in Point 1 herewith into cases eligible for tax refund before inspection or cases subject to inspection before tax refund as regulated.Provincial Departments of Taxation must update the TMS with sufficientrecords related totax refund to serve theprocessing of applications for tax refund by their departments; General Department of Taxation shall conduct automatic supervision on the TMS before decisions on tax refund are made byProvincial Departments of Taxationin order to ensure that the tax refund is given in proper and timely manner as regulated by laws.

Directors ofProvincial Departments of Taxationare requested to strictly implement guidance herewith.Difficulties that arise during the implementation of thisguidanceshould be reported to the Ministryof Finance or General Department of Taxationfor consideration.

For the Minister

The Deputy Minister

Do Hoang Anh Tuan