Overview of Vietnam's Value-Added Tax (VAT) Refund and the Impact of Legal Amendments
2025/06/06
- I-GLOCAL CO., LTD.
- 米国公認会計士
- 渡 柚輝
The mechanism of Vietnam’s Value Added Tax (VAT) is generally based on the same concept as Japan’s consumption tax, but there are significant differences in the laws and practices concerning VAT refunds.
In Japan, the refund claim is made at the same time as the consumption tax final return, and the refund is deposited in about two months. However, VAT refunds in Vietnam currently take considerably longer to review, with the process from application to refund taking several months in the northern regions like Hanoi, and in some cases, several years in the southern regions such as Ho Chi Minh City.
In addition, VAT refund procedures require many documents during the review process, and the conditions for applying for refunds are complex. Moreover, since the tax authorities’ review standards and practical operations vary by region, companies need to respond with caution.
This article explains the overview of VAT refunds in Vietnam and the impact of the legal amendments passed on November 26, 2024, which will take effect on July 1, 2025.
1. Overview of VAT Refunds
Most Japanese companies adopt the credit method, which involves deducting input VAT related to purchases from output VAT related to sales when filing.
Under the credit method, output VAT accumulates, and it is possible to receive VAT refunds from the tax authorities when certain prescribed conditions are met.
In practice, there are three main conditions that Japanese companies should be aware of to qualify for VAT refunds;
| Each item | Details of the conditions | Laws and regulations |
| ① New Investment Project | Input VAT of over 300 million VND accumulated during the initial stage (construction, equipment installation, etc.) | Decree49/2022/NĐ-CP |
| ② Export transactions (0%) | Export input VAT exceeding 300 million VND (Refund cap = 10% of export revenue) |
Circular 219/2013/TT-BTC |
| ③ Dissolution, Liquidation, Bankruptcy | Undeducted or Overpaid VAT at the End of the Business Period | Circular 219/2013/TT-BTC |
If the above conditions are met, it will be possible to submit a VAT refund application.
2. Required Documents and Process Flow for VAT Refund
A. Necessary documents for VAT refund
The documents required for VAT refund are as follows.
(Reflecting the legal amendment enforced on July 1, 2025)
I. Documents required in all cases
| Basic Documents | 1. Refund application form （Form 01/HT） 2. Purchase Invoice List （Form 01-1/HT）*1 3. VAT return and schedules for the refund claim period（Form 01/GTGT） 4. Accounting books, trial balance, and financial statements (supporting the unrecovered VAT balance) (upon request) |
| Payment Voucher | 5. Evidence of non-cash transactions such as bank transfer slips and internet banking statements*2 |
| Contract Documents | 6. Sales of Goods and Services / Service Agreement (Demonstrating the Existence of the Transaction) |
*1：If the electronic invoice has already been sent to the tax office, it can be omitted.
*2: Before the amendment, only transactions of 20 million VND or more were required, but after the amendment, it is required for all transactions.
II. Case of New Investment & Expansion Investment Projects
（In addition to I, the following materials are also prepared.）
| Additional Documents (New Investment) | 1. Investment Registration Certificate (IRC) or documents proving investment approval 2. Capital Payment Certificate 3. Construction Permits and Land Use Rights Documents (such as for the construction of company factories or warehouses) 4. Equipment Purchase Agreement 5. Substantive Evidence of New Investment Progress and Completion (with clear completion dates)*1*2 |
| Additional Documents (Extended Investment) | Related documents proving the following “extended investment” (copies of the amended IRC, etc.) 1. A copy of the IRC reflecting the expanded investment 2. Actual evidence of the progress and completion of the extension phase (clarifying the completion date)*1*2 |
*1：Application must be made within one year from the completion date.
*2: It should be noted that when comparing the scheduled production start date recorded on the IRC with the actual production start date, if the actual start date is delayed, there are cases where refund applications for input VAT before production start are denied.
In such cases, it is recommended to submit a progress adjustment report related to the production start to the DOF or the industrial park management committee.
II. Cases of export transactions (0% VAT)
(In addition to I, prepare the following materials as well)
| Additional Documents*1 | 1. Customs Export Declaration List Form 01-2/HT 2. Export Contract and Commercial Invoice*2 3. Packing List 4. Bill of lading or air waybill (depending on the actual transaction) 5. Cargo insurance policy (mandatory for CIF transactions and generally required for CIP transactions as well) 6. Bank receipt for payment*3 |
*1：No.3 to 5 will become mandatory after the revision
*2：It is necessary to include the buyer’s bank account number for payment, and in many cases, refunds cannot be processed without this information.
*3：Before the revision, it was required only for transactions of 20 million VND or more, but after the revision, it is required for all transactions.
B. Specific Procedures for VAT Refund
The specific process flow until the VAT refund is as follows.
1) Organize the evidence related to the VAT refund and prepare the refund application form (such as Form 01/HT).
2) After submitting the refund application documents, the review begins.
3) The government makes a bank transfer (or offsets it against unpaid taxes).
The procedure itself is not complicated, but the review in step 2 requires a considerable amount of time.
The review period varies significantly by region; in the northern area such as Hanoi, the review is basically completed within a few months, but in the southern area such as Ho Chi Minh City, it can sometimes take several years.
Regarding the extremely long review process in Ho Chi Minh City, the Ho Chi Minh City Tax Department is aware of this and issued instructions to improve the speed of refund processing in Official Letter No. 563/CT-NVT published in April 2025.
3. Impact of the Legal Amendment on VAT Refund Procedures
Due to legal amendments effective from July 1, 2025, the situation regarding VAT refunds for Japanese companies will undergo significant changes, making it important to properly understand the matters that may be affected. The main points of the legal amendments related to VAT refunds are summarized below.
| Item | Specific details | Impact on Practical Work |
| Expansion investments are explicitly stated as eligible for refunds. | Applications can be made for extension investments that meet both of the following conditions: a cumulative amount of over 300 million VND and completion within one year. | Enhancements to existing factory lines are also eligible for VAT refunds. However, since the filing deadline is short, it is recommended to start preparing for the VAT refund from the stage of making expansion investments. |
| List of essential documents for export refunds | Packing list, bill of lading or air waybill, and cargo insurance policy have been added as mandatory documents. | While the necessary documents have become clear, the number of submitted materials has increased, which is expected to prolong the time required for verification tasks. |
| Non-cash payment receipts are mandatory regardless of the amount. | Previously, only transactions of 20 million VND or more were required to be submitted, but from now on, proof of banking transfers, card payments, and the like will be mandatory for all transactions. | It is necessary to abolish cash transactions and shift all transactions, regardless of the amount, to bank or digital payments. |
| Strengthening the linkage between supplier tax payment status and refunds | The Tax Department automatically matches the output VAT payment information of suppliers during the refund process. If non-paying businesses are mixed in, the refund for the relevant invoice will be put on hold or rejected. |
Even if appropriate documents are prepared, depending on the situation of the business partner, VAT refunds may be denied, and the refund amount may decrease more than expected. |
| Corporate restructuring (mergers, splits, and stock transfers) are excluded from refunds. | The new law clearly states that residual VAT resulting from changes in ownership or reorganization will not be refunded. | A financial plan is needed to eliminate the unclaimed VAT before the group reorganization (through deduction or refund application). |
| Re-exports (imported goods resold to other countries) are not eligible for refund | It is codified that input VAT paid on goods during import customs clearance will not be refunded if those goods are subsequently re-exported from Vietnam to another country. | Review the transaction scheme and verify in advance the eligibility as a pure “export.” In re-export type businesses, pricing design needs to be based on the assumption that VAT costs will remain. |
With this revision, VAT refunds related to expansion investments, which had previously been denied at the discretion of various ministries and officials, are now clearly recognized as eligible for refunds, creating a favorable environment for Japanese companies.
On the other hand, stricter control over documentary evidence related to VAT refunds is advancing, including an increase in documents required at the time of export and the mandatory non-cash settlement.
Companies are required to correctly understand the evidence needed for refund applications and to securely obtain and manage it at the time of transaction.
When actually proceeding with VAT refunds, it is important to respond taking into account the latest perspective of the tax authorities, so it is recommended to consult accounting and tax experts familiar with VAT refunds in Vietnam.
This article was translated using Yarakuzen.
【Contact Information】 I-GLOCAL CO., LTD.
Person in charge：Yuzuki Watari yuzuki.watari@i-glocal.com
Ho Chi Minh Office +84-28-3827-8096 Hanoi Office +84-24-2220-0334
Related report is here
Reports related to this theme are introduced below. Please be sure to take a look at them as well.
・Overview of Vietnam’s Value Added Tax (VAT) and Key Points of Legal Revisions
・申告漏れ仕入VATの修正申告手順に関する解説
