Step 1: Shop at VAT Refund Eligible Stores

Ensure you shop at stores displaying the “VAT refund” logo. After making your purchase, ask for a VAT invoice, which will serve as your tax declaration when claiming your refund.

Step 2: Gather Necessary Documentation

Before heading to the airport, make sure you have:

• Your passport
• Your VAT refund invoice
• Your boarding pass
• Unused goods purchased in Vietnam

Pack the goods separately for easy customs inspection at the airport.

Step 3: Visit the VAT Refund Counter at the Airport

At the airport, head to the VAT Refund Customs Inspection Office with your documentation. Customs officials will inspect your purchased goods and validate your claim. You’ll then proceed to the tax refund desk.

Step 4: Receive Your Refund

Upon completing the customs inspection, you will be issued your VAT refund in Vietnamese Dong (VND), minus a small processing fee (up to 15%). You can convert the VND to your preferred currency at the airport’s exchange centers (e.g., Vietcombank, Maritime Bank, or BIDV at Noi Bai or Tan Son Nhat airports).

VAT Refund Process for Businesses in Vietnam

Foreign companies operating in Vietnam can benefit from VAT refunds in various scenarios where input VAT exceeds output VAT, such as investment projects, mergers, or exports. For example, businesses engaged in staffing services in Vietnam or outsourcing services may find themselves eligible for VAT refunds, particularly in sectors like investment projects or exporting goods.

Key Situations for VAT Refund Eligibility:

• Exporting Goods and Services: Companies with over VND 300 million in uncredited input VAT on exported goods/services may apply for a refund. This is relevant for businesses engaged in manufacturing and export operations.
• Investment Projects: Registered foreign companies with significant input VAT during investment phases can claim refunds, especially for large infrastructure, oil, or gas projects.
• Company Reorganization: Mergers, acquisitions, or business restructurings (such as M&A activities) may also lead to VAT refunds on uncredited input VAT.

Steps for Businesses to Claim VAT Refunds:

1. Prepare Your Documentation:
   • Investment Registration Certificate (IRC)
   • Enterprise Registration Certificate (ERC)
   • Official accounting documents and financial statements
   • Proof of the bank account used for investment activities
   • Refund application form
2. Submit Your Application: VAT refund applications must be submitted via the government’s online tax management platform. This process requires detailed documentation, particularly for businesses involved in exports or investments.
3. Compliance Checks: Local tax authorities will thoroughly check your financial records and invoices. Ensure all accounting statements are accurate before submitting your application. For complex cases, such as staffing firms in Vietnam or large-scale investment projects, outsourcing the process to tax professionals may be advisable.

Common Mistakes to Avoid When Claiming VAT Refunds

• Missing Documentation: Always ensure you have the required invoices and documents for your claim.
• Unclaimed Input VAT: Regularly check for unclaimed input VAT that can be refunded or deducted.
• Not Outsourcing Complex Cases: For businesses dealing with investments, exports, or M&A activities, consulting experts like NIC Global can streamline the process and increase the chances of a successful refund.

Impact of VAT Reductions on Businesses in Vietnam

Vietnam’s government extended the VAT reduction from 10% to 8% until the end of 2024. This VAT cut offers financial relief to companies in industries such as manufacturing and services. For businesses using the credit method to calculate VAT, the refund process ensures that input VAT is deducted accurately from output VAT, reducing operational costs and improving profitability.

Outsourcing VAT Refund Processes to Experts

Navigating VAT refunds can be complex, especially for foreign businesses unfamiliar with Vietnamese tax laws. This is where outsourcing can be a game-changer. By partnering with tax professionals like NIC Global, businesses can ensure compliance, expedite the refund process, and reduce administrative burdens.

NIC Global offers a comprehensive range of services, including:

• Tax consultancy and compliance checks
• Assistance with preparing and submitting refund applications
• Liaising with local tax authorities
• Support throughout the refund process, from documentation to fund disbursement