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Tax Refund In Vietnam: All You Need To Know

Venturing into the vibrant world of Vietnam’s commerce or just shopping around?

Navigating tax refunds can often be as intricate as a Vietnamese silk pattern.

Allow this guide to be your trusty lantern, shedding light on the ins and outs of reclaiming your dues in Vietnam.

Let’s dive in!

VAT In Vietnam

The standard Value Added Tax or VAT rate in Vietnam is 10% for most goods. The government recently reduced this to 8% as well. There is a reduced VAT rate of 5% on some food items whereas some items and services are exempt from VAT altogether.

If you are an overseas Vietnamese or a foreigner visiting the country, you will be able to claim a VAT refund on purchases you make in Vietnam and carry with you back home.

While this was initially implemented only on certain exit terminals , it has now been extended to many all over the country.

As a foreigner, you can obtain a refund for up to 85% of the VAT for eligible goods. The 15% that remains is usually the maximum that can be charged as a service fee by the bank.

You should remember that the refund that you get will be in the local currency i.e. Vietnamese Dong.

There are certain conditions that your purchases must fulfill if you wish to receive a refund. These include the following:

• VAT must have been applicable on the purchased goods in the first place, the goods must be unused and actually allowed on an airplane.
• They should not be on any export restrictions or prohibitions list.
• You must have all invoices and should declare VAT refunds within 60 days of your departure from Vietnam.
• The goods must have been bought from a certified retailer of VTA refunded goods, and from the same place in a single day duration.
• The goods purchased should be worth at least VND 2,000,000 .

Procedure To Get A VAT Refund

If your purchases meet the conditions mentioned above, then you can apply for a VAT refund. 

When buying the products, you should specifically let the staff at the counter know that you wish to get a Tax Refund Receipt. They will require your passport to issue this receipt to you.

It is your responsibility to make sure that the information entered by retailers on the VAT invoices is accurate . If it is not, then you should have it corrected on the spot.

When you are leaving for the airport to catch your flight back, make sure you have these purchased goods properly packed , and are carrying your passport as well as the original invoices and the VAT declaration form .

Once you arrive at the airport, head to the VAT refund customs inspection office to present all the items for your claim. 

The airport staff will check all of these items on the spot, so it will make things easier if you pack them and carry them separately and you are able to retrieve them quickly when needed.

Once you have completed all the paperwork, the staff will collect your boarding pass from you. You can then visit the Tax Refund Desk to receive your refund.

This will be in the local currency , so you might also want to get it converted at the airport via a currency exchange.

Important Things To Remember

Bear in mind that there are some common errors that might get you into trouble or hinder your refund. These include not registering your bank account where the refund will be coming in, not complying with VAT declaration forms or making multiple changes to the tax return without valid reasons.

Any missing documents will also lead to a rejection of the refund by Vietnamese customs authorities.

You must also know that only foreigners or overseas Vietnamese are eligible for this tax refund scheme. It is not applicable to any cabin crew for airlines or ship crew.

With the curtain drawn on Vietnam’s tax refund system , you’re now equipped with the savvy to claim back what’s rightfully yours.

Travel, shop, and enjoy the Vietnamese landscape, knowing you’ve mastered the fiscal fine print!

Refund Realized!

But wait! There’s lot more that you might be interested in following:

• Tax Number In Vietnam
• Tax Declaration In Vietnam
• Income Tax Brackets In Vietnam

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Tax Refund For Foreigner In Vietnam

June 15, 2020

Table of Contents

When travelling overseas, besides inevitable documents such as passport, visa, criminal record, foreigners are advised to know some regulations related to their benefits. A tax refund is a term that foreigners should keep in mind. So what is a tax refund? What should you know about tax refund in Vietnam?

This article will provide you with useful information about tax refunds in Vietnam regarding locations of paying tax, procedures of a tax refund, and necessary documents.

What is a tax refund for foreigners?

Tax refund for tourists permits travellers (foreign passport holders) to claim back Value Added Tax (VAT) on items purchased in any stores registered as a “Tax Refund for tourists” participants. 

Who will follow the VAT refund?

According to Article 1 of the Circular No 72/2014/ TT-BTC issued on 30 May 2014 , two subjects of VAT refund are “foreigners and overseas Vietnamese, except for members of the flight crew in accordance with the Aviation Law, member of sailor crew in accordance with the Maritime Law (hereinafter referred to as foreigners) whose passports or entry/exit documents are issued by foreign authorities and valid for entering and exiting Vietnam, purchasing and bringing goods overseas through ports of entry/exit where VAT refund is available”. 

Locations of tax refund declaration

Two locations that tourists should keep in mind are locations for physical inspection of goods, checking VAT refund declaration, and location for VAT refund payment. 

When foreign travelers arrive at Noi Bai or Tan Son Nhat airport, the location for physical inspection of goods, checking VAT refund declaration is located at the baggage check-in counters and/ or boarding-pass checking areas in order for physical inspection of refunded goods sent by luggage; at the isolated areas in order for physical inspection of refunded portable goods. 

Besides, to receive the tax refund, VAT refund counters at international seaports, which have separate counters (kiosks) and are qualified for cash management and accounting documents in accordance with laws. 

Process of VAT refund

The process of VAT refund goes through three stages.   

Stage 1: Foreigners purchasing goods at enterprises selected for selling VAT refund goods (as published on the website of General Department of Tax www.gdt.gov.vn) shall be noticed to check the information in invoice cum tax refund declaration (date of issuing invoice; full name, passport number of buyers…).

If the information is not correct and completed, foreigners shall request for correction; but if it is correct and complete, they shall sign in the invoice cum tax refund declaration.

Stage 2: Foreigners shall be requested to submit invoice cum tax refund declaration and present refunded goods to the customs authority. In Noi Bai and Tan Son Nhat International Airport, foreigners shall submit invoice cum tax refund declaration and present goods to the customs authority at invoice cum tax refund declaration checking counters outside of the restricted areas in order for customs officers to check before conducting procedures for sending baggage.

After customs authority checks invoice cum tax refund declaration and goods, foreigners shall continue to conduct procedures for sending goods and take their boarding-pass.

In case foreigners request for refund payment to their hand luggage, after coming into the restricted areas, they shall submit invoice cum tax refund declaration and present refunded goods as requested. Customs Authority shall check invoice cum tax refund declaration and goods (if necessary) and calculate the VAT amount refunded to foreigners.

In the other places of a tax refund, refunded hand goods or baggage shall be subjected to customs inspection outside the restricted areas (in international airports) and in the refund areas (in international seaports).

Stage 3: Foreigners shall present their boarding-pass card and invoice cum tax refund declaration checked by Customs Authority in terms of identifying kinds of goods and calculating VAT amount refunded to foreigners, and stamp at tax refund counters in restricted areas.

Necessary documents for tax refund

In order to fulfill the procedure of checking and submitting VAT refund, foreign tourists should pay attention to two kinds of documents consisting of documents for checking invoice cum tax refund declaration and goods and documents for VAT refund payments to the foreigner on exit. 

In terms of necessary documents for checking invoice cum tax refund declaration and goods, foreigners shall present to the customs officials at the invoices cum tax refund declaration and goods checking counter the following documents: passports or exit and entry permits; invoice cum tax refund declaration and goods. 

With regard to necessary documents for VAT refund payments to the foreigner on exit, foreigners should prepare boarding pass and invoices cum VAT refund declaration. After the customs inspection on invoices cum VAT refund declaration and goods has been completed, foreign passengers shall present to the commercial banks at the refunding counter with the documents mentioned previously. 

Goods subjected to VAT refund

According to Article 11 of Circular No 72/2014/TT-BTC dated 30 May 2014 , VAT refund is applied to objects that meet the following requirements: 

“ – Goods are not included in the list of goods prohibited from exportation; the list of export goods under permits of the Ministry of Trade (now the Ministry of Industry and Trade) or export list subject to specialized management according to the Decree No 187/2013/NĐ-CP dated 20/11/2013 of the Government and the guidelines thereof.

– Goods are subjected to VAT as stipulated in Article 3 of the VAT Tax Law No 13/2008/QH12 dated 3/6/2008 and the guidelines thereof.

– Goods are not in the list of goods prohibited in airplanes as stipulated in Article 12 of the Vietnam Civil Aviation Law dated 29/6/2006 and the guidelines thereof.

– Goods are not subjected to VAT refund of foreigners according to Circular 08/2003/TT-BTC dated 15/1/2003 of the Ministry of Finance which guides VAT refund for diplomatic missions, consular posts, and representative offices of international organizations in Vietnam.

– Goods purchased in Vietnam with invoice cum tax refund declaration which is issued within a maximum 60 days before the date of departure of foreign passengers from Vietnam.

– The minimum value of goods in the invoice cum tax refund declaration purchased at the same seller on the same day (including accumulation of many same-day invoices from the same seller) is at least 02 million VND.”

Some difficulties about tax refund system for foreigners in Vietnam

Currently, the procedure of inspecting VAT refund still depends much on paperwork. The customs agencies, established by the General Development of Vietnam Customs, check invoices by paper presented by passengers without electronic invoices. Besides, the process also faces some limitations when tourists have to make the declaration with hand-writing paper. 

According to the Hanoi Custome Department, the Noi Bai Customs Brach reported that some cases caused difficulties for the Customs office to calculate the VAT refund such as clothes with general brands, missing labels, badges, missing red marks on invoices or inaccurate contact number. 

Meanwhile, the Da Nang Customs Department, through the implementation VAT refund of goods for overseas tourists and Vietnamese expat on exit, reported that the office had difficulties in determining the sales companies’ tax refunds when checking invoices and VAT declaration. Therefore, it takes much time for the office to collect the refunded VAT with invoices made by these sales companies. 

Solutions to improve the quality of the VAT refund system

This part is adapted from the article published on Customs News. With a view to building a more efficient system, authorities and organizations should coordinate with each other. It is advised that VAT refunding businesses work with the General Department of Taxation so, the management is tight and more convenient.

Furthermore, enterprises involving in sales tax refund should have clearly defined rights and obligations as well as sanctions for cases where enterprises do not update the information to the Customs office to handle in advance.

The Hanoi Customs Office suggested that tighter regulations on VAT refund conditions should also be applied for new or second-hand goods. The actual inspection of goods which are of great value from high-end brands namely Rolex Watches, Cartier, Hermes, Chanel is difficult to determine whether they are real or fake goods. 

The application of technology in the VAT refund system should be implemented. It will create higher productivity and ensure transparent information between the Customs, banks, and VAT refund businesses. 

All in all, a VAT refund is significant for foreign tourists entering and exiting Vietnam to ensure their benefits when traveling overseas. Foreigners should prepare in advance necessary documents to declare their VAT refund and follow the instruction of the Customs Office. The VAT refund system in Vietnam still has difficulties in creating a smooth workflow between relevant enterprises.

Therefore, it is an important point for the authority to upgrade the procedure of VAT refund. Hope that the article is helpful to you and if you have any problems relating to law, please contact Viettonkin , we will support you by our hearts. 

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How to get VAT refunds in Vietnam

If you purchase expensive products during your  travel in Vietnam , it is very easy to get a VAT refund if you follow  these instructions . A pilot program was implemented in 2012 at Noi Bai and Tan Son Nhat International airports which allowed foreigners to receive VAT refunds in Vietnam. As of early March 2015, the VAT refund to foreigners program has expanded to seven additional exit terminals.

Below is the personal VAT refund process, & then the one for corporate

What are the new airports & ports accepting vat refunds.

– Cam Ranh International Airport

– Da Nang International Airport and Da Nang port in central Da Nang City

– Nha Trang seaport in coastal Khanh Hoa Province

– Khanh Hoi International seaport in HCMC

– Phu Quoc International Airport.

– Ben Dam Con Dao Seaport

**VAT refunds in Vietnam are only applicable to goods brought along by foreigners when they exit. For the seaports, a refund is only available if the ships go directly abroad from the ports. Keep in mind these ship voyages only occur 3 to 4 times a year.

Foreigners are entitled to obtain a refund that accounts for 85 percent of VAT on eligible goods that were purchased at VAT refund shops during their  travel in Vietnam . The remaining 15 percent will be counted as service fees. In other words, this is an opportunity for foreigners to get back some of that hard-earned cash by buying goods at shops that offer VAT refunds. Note that VAT refund currency is Vietnamese Dong (VND).

What are the goods you buy that are eligible?

1. The purchased goods must be subject to VAT, unused, and allowed on aircraft.

2. The purchased goods must not appear on the list of export prohibitions or restrictions.

3. The purchased goods must have invoices and VAT refund declarations issued within 30 days of departure.

4. The purchased goods must be bought from a single shop in one-day duration and must be valued at least VND 2.000.000 (185 USD)

What is the procedure to get the VAT refund?

1. When at the payment counter, make sure you tell the staff that you want to receive your tax refund. Make sure you have your passport with you when you visit the store.

Then they will issue you an original tax refund receipt. Keep all receipts for products sold with Amazon and any other company. Also, keep the seller’s tax document.

2. When you leave for the airport, remember to pack the purchased goods, your passport, the invoice, and the VAT declaration form in separate containers for easy retrieval during an inspection at the airport.

The airport security staff will inspect your carry-on items, so you should be prepared to show them.

3. Upon arriving at the airport, head over to the VAT refund customs inspection office to present all the items mentioned above.

4. Once you complete your declaration form, they’ll collect your boarding pass for your flight. You will then go to the Tax Refund desk where you will receive your refund.

They’ll refund your money in Vietnam Dong, so you’ll need to go to a currency exchange counter. At Noi Bai International Airport, there are two maritime banks as well as a Vietcom Bank and a BIDV exchange.

What is the Regime for Corporate VAT Refunds in Vietnam?

If you are a business owner you can apply for VAT Refunds for certain circumstances (but not limited to these).

• adopt the credit method for VAT declaration and the project is a manufacturing/selling the output goods/services subject to VAT;
• is undergoing an investment phase and has commenced its operation;
• all goods and services purchased for investment purposes must have accumulated input VAT of 300 million dongs or above in order for the purchaser to apply for a VAT refund.

The procedure for VAT refund is not straightforward. Some businesses will experience difficulties with the VAT refund procedure. The Potential risk of a new business? Check out this overview!

What Application for Corporate VAT Refunds in Vietnam?

• all enterprises are advised to take into consideration these common issues related to grants, charter capital, and doing business in certain conditional business areas.
• If the registered investment period is shorter than the actual completion time, the incurred VAT will be carried forward instead of being refunded;
• investment projects are not qualified for the conditional business lines required by relevant laws/regulations or do not have the required licenses or sub-licenses issued by relevant departments;
• Insufficient contribution to the registered capital, or failure to prove up on completed capital contribution either in cash or an asset.

What Corporate Refunds qualify under the Investment Phase?

Local tax authorities may ask how to generate revenue from selling samples during the investment phase. In some cases, the tax officer will try to cut off the VAT refund period incurring testing revenue, and reducing the total refund amount once the tax audit has taken place.

What Input VAT from Purchases?

It is common that the refund/credit input VAT due may not comply with the legal regulations in terms of supporting documents for input purchases and fail the requirements for non-cash payments for purchases. Some incomplete payments for purchased goods and services are used for investment projects, which would be a reason for failing the non-cash payment requirements.

This could happen in different situations, but when you’re working for an enterprise that deals with investments you need to record the input VAT of goods and services you purchase to use for investment purposes.

What are the Common VAT Refund Errors?

Here are some common errors in the VAT refund application include:

• enterprises not blocking the VAT refund requested amount before officially getting into the business operation;
• not registering the bank account receiving the refund amount or e-tax payment, which is regulated by laws.
• non-compliance with VAT declaration forms; or
• making multiple, uncoordinated changes to the tax return for no good reason.

Click Here to know more about doing business in Vietnam

1 thought on “How to get VAT refunds in Vietnam”

i am an expat staying in Vietnam on a 1 year visa and work permit till June 2024. i am planning to buy an iphone as a gift for my family back in India. can i claim VAT, while going to India this February. my doubt is since i will be exiting the country and will be back again in March, am i still eligible to claim VAT refund on the Iphone i purchased as a gift.

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VAT refund Vietnam: Update on the current process

On 14 April 2023, a change in VAT refund in Vietnam came into effect. There are new rules regulating which refunds are possible and which documents must be submitted. The Ecovis experts summarise the most important points on VAT refunds.

The changes to the VAT refund are set out in Circular No. 13/2023/TT-BTC (Circular 13), which regulates the implementation of Decree No. 49/2022/ND-CP (Decree 49) and amends Circular No. 80/2021/TT-BTC.

The points in detail

1. Business establishments eligible for VAT refund for investment projects

Clause 3, Circular 13 totally replaces Clause 3, Article 18, Circular 219/2013/TT-BTC to ensure consistency among regulations. Accordingly, business establishments shall be entitled to VAT refund for investment projects according to the provisions of Clause 3, Article 1 of Decree 49.

In short, Decree 49 removed the requirement for the investment period to last more than a year to receive an annual VAT refund. It also allowed an investment project with conditional business to receive a VAT refund during the investment period if such investment project, as regulated by the investment and governance law, is not required, or has not yet been required to obtain a license/confirmation/approval from the competent authorities to carry out the conditional business.

2. Application for VAT refund

Circular 13 also modifies and supplements Point a.4, Clause 2, Article 28 of Circular 80 on VAT refund dossiers, including a copy of one of the licenses, certificates, or written confirmation or approval of these conditional business lines for investment projects with conditional business lines in the investment stage that have been granted licenses to engage in conditional business lines by the competent authority under the provisions of Clause 3, Article 1 of Decree 49.

Accordingly, from 14 April 2023, VAT refund dossiers for business establishments with conditional business lines will primarily include the following:

• The application form No. 01/HT
• A copy of the Investment Registration Certificate (IRC)/Investment Certificate/ Investment License in the case of mandatory IRC application
• A copy of the Land Use Right (LUR) Certificate/decision on land allocation/land leasing contract issued by a competent authority; or the Construction Permission Certificate for projects with construction works
• A copy of the license/certificate/written confirmation or approval for the conditional business lines
• A copy of the Certificate of Charter capital contribution
• A list of purchase invoices and documents according to Form No. 01-1/HT, unless the relevant electronic invoices are sent to the tax authority
• The decision on the establishment of the project management board/assignment of project management tasks by the project owner
• The organisation and operation regulations of the branch or project management board if the tax refund is applied for by the branch or project management board

For further information please contact:

Nghia Tran, Partner of Tax, Accounting and Consulting, ECOVIS AFA VIETNAM, Da Nang City, Vietnam Email: [email protected]

Contact us:

Nghia duong tran.

• Ecovis in Danang City
• +84 236 3633 333

ECOVIS AFA Vietnam

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Simplify vat refund to boost foreign tourists' spending: expert.

Nguyen Thi Cuc, head of Vietnam Tax Consultant Association, said at a tourism conference Friday that the average per capita expenditure of foreigners visiting Vietnam remained low and the government should take appropriate measures to boost their spending.

The average spending of international tourists in Vietnam in 2018 was $1,065, according to the Vietnam Tourism Report prepared by the Vietnam National Administration of Tourism.

Cuc said one of the most effective measures is to help foreign tourists easily receive VAT refunds when they leave the country.

Foreign tourists and overseas Vietnamese currently receive VAT refunds on purchases made in Vietnam under a circular that took effect in 2014.

They are entitled to obtain a refund of 85 percent of VAT on eligible goods bought from eligible shops during their travel in Vietnam. The remaining 15 percent will be counted as service fees.

The refund can be collected at airports and ports before tourists leave the country. They will have to shop at designated stores that sell VAT refundable goods. After purchasing goods, the store staff will issue invoices and a VAT refund declaration form.

At airports or ports, visitors must submit invoices along with their VAT declaration form to the refund customs inspection office for checking and stamping before taking them to the payment counter to get their refund.

Cuc said such requirements were inconvenient for foreign tourists. In some cases, because they were afraid of not being able to get to the aircraft on time, they have not bothered about the scheme, so this has affected their spending in Vietnam, she added.

She proposed that tourists be able to get their VAT refunds right where they shop like in many other countries including Japan.

After purchasing goods, visitors should be able to take their invoices to the tax refund counter inside the shopping centers and supermarkets.

After checking the purchased goods and immigration documents, the tax refund counter can pay visitors in cash or to their credit cards. They can stamp relevant documents for custom officials to check when tourists leave the country.

The proposal to simplify VAT refund procedures is the latest measure proposed to boost tourism revenues. Other experts have proposed that the government considers granting visa exemptions to more countries with longer stays.

The government resumed its unilateral visa exemption policy for citizens from 13 countries as Vietnam reopened inbound tourism a fortnight ago after nearly two years.

Citizens from Belarus, Denmark, Finland, France, Germany, Italy, Japan, Norway, Russia, South Korea, Spain, Sweden, and the U.K. are allowed to visit Vietnam for up to 15 days without a visa regardless of passport type and entry purpose.

The country also has bilateral visa exemption policy for ASEAN co-members, Chile and Kyrgyzstan.

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VAT refund should be given to international travelers at shops: expert

International visitors to Vietnam should get value-added tax (VAT) refunds for their purchases right at the designated shops where they have bought them, instead of at airports before leaving, a tax expert has proposed as a measure to encourage their spending in the country.

Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultant Association, made the recommendation at a tourism conference held in Hanoi on Friday with the theme of “Restoration of Vietnam’s tourism: New directions, new actions.”

As the average per capita expenditure of foreign tourists in Vietnam remained low, the government should adopt effective steps to boost their spending during their stay in the country, VnExpress cited Cuc as saying.

One of the most appropriate measures is to make it convenient for international travelers to receive VAT refunds, the expert said.

Under a circular issued in May 2014 by the Vietnamese Ministry of Finance, foreigners and overseas Vietnamese are given a refund of 85 percent of VAT on their goods purchased at eligible shops.

The 15-percent remainder of the tax is accounted as service fees.

Currently, before leaving Vietnam, international travelers receive such refunds at airports or ports by presenting to a refund customs inspection officer the invoices and VAT refund declaration forms issued by the said shops.

After the officer checks and stamps the papers, visitors will take them to the payment counter to get their refund.

Such procedures are inconvenient and time-consuming for foreign tourists and discourage their spending in Vietnam, Cuc emphasized.

She therefore recommended that travelers be able to get VAT refunds right at such shops through some simple steps, as being applied in many other countries.

The expert believed Vietnam, which is building its e-government mechanism by applying digital technologies, can adopt the new practice easily.

Such simplified VAT refund procedures should be applied from the end of this month, when e-invoices are scheduled to be widely used across the country, Cuc suggested.

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Vat refund process needs simplifying: experts.

Experts have urged simplifying the procedures to receive refunds on value-added tax (VAT) for foreign tourists.

HCM CITY — Experts have urged simplifying the procedures to receive refunds on value-added tax (VAT) for foreign tourists.

Speaking at a seminar on VAT refunds on Wednesday in HCM City, Dr. Phạm Trung Lương, vice chairman of the Việt Nam Tourism Education Association, said that VAT refunds encourage tourism and boost visitors’ spending, but the procedures to receive refunds in Việt Nam was unclear and inconsistent.

As a result, many tourists at border gates and airports do not receive VAT refunds, he added.

Lawyer Nguyễn Văn Hậu, chairman of the Việt Nam Law Arbitration Centre, said foreign tourists and overseas Vietnamese currently receive VAT refunds on purchases made in Việt Nam under a circular that took effect in 2014.

Visitors leaving Việt Nam can claim 85 per cent of the VAT charged on goods bought in the country. 

Goods eligible for a VAT refund must not be among those prohibited for export as regulated by the Ministry of Industry and Trade and should not be goods subject to special management.

To qualify for a VAT refund, a tax refund declaration form must be issued within 30 days from the departure date of the traveller. A valid invoice for goods costing at least VNĐ2 million ($90) must be presented.

VAT refunds will be paid in đồng or a foreign currency in line with current bank exchange rates, according to Hậu.

Before security and customs checks on flights, foreigners at airports must submit several documents for inspection at the customs counter to claim a refund. These include a bill-cum-VAT refund declaration form and a receipt, along with the goods in question. 

The foreigner must also show a passport or ID papers.

If the purchases are not taken on board as hand luggage, the foreign traveller must present the goods and a tax invoice at a VAT refund desk or to a customs official prior to check-in.

Phan Đình Huê, director of Vòng Tròn Việt Travel Company, said the purpose of VAT tax refunds was to encourage tourism and the purchase of goods made in Việt Nam.

“It should never be considered a favour we do for tourists,” he said. “Our survey shows that most foreign visitors are primarily concerned about fake or counterfeit goods, instead of the price. Some European customers have complained about the quality of lacquer items purchased in Việt Nam.”

Việt Nam is also not considered a major shopping destination, so visitors are not particularly interested in VAT refunds, he said.

Lawyer Bùi Quang Tín pointed out that counterfeit goods and imported Chinese goods were prevalent in the market.  

For example, the recent Khaisilk scandal, a big company that was found importing Chinese goods under its brand name, has discredited many Vietnamese brands, he said.

“This makes it more difficult for international visitors to get VAT refunds as the quality of the purchased goods is not in line with the content declared on the invoice,” he said.

Ineffective scheme

Only 649 stores of 80 enterprises had taken part in the VAT refund programme as of the end of last month, according to the HCM City Department of Tourism.

Economist Đinh Thế Hiển said the current VAT refund for tourists was still not prevalent in Việt Nam, with only nine tax border gates, mostly in HCM City.

VAT refunds are more common and more easily secured in Singapore, Hong Kong, South Korea and Japan, among other countries, he said.

He said that many foreigners were unaware of Việt Nam’s VAT refund policy.

Shaun Ang, a Singaporean photographer who has travelled between Singapore and Việt Nam for 10 years, said he did not know about the VAT refund scheme.

“The VAT refund can promote tourism, so I think the scheme should be further promoted so that foreigners know about it,” he said.

“The Vietnamese Government should make the procedures easy and convenient for foreigners,” he told Việt Nam News . “It’s really easy to get a VAT refund at Singapore’s Changi International Airport. Visitors can also get VAT refund easily in some big stores in town.”

Ong Din Han, of Malaysia told Việt Nam News : “I travel between Việt Nam and Kuala Lumpur every month for business, but I was unaware of the policy.”

According to the customs division at HCM City’s Tân Sơn Nhất International Airport, the amount of VAT refunds so far this year was VNĐ35.5 billion ($1.56 million) compared to VNĐ44 billion ($1.94 million) last year.

Lê Tuấn Bình, deputy director of the customs department of Tân Sơn Nhất airport, said around 40,000 people arrive and depart from the airport every day, with half of that figure representing departures.

However, the total number of VAT refunds being processed daily at Tân Sơn Nhất airport are worth a total of only VNĐ100 million ($4,400), which shows the low demand for such refunds.

Most VAT refund items include sunglasses, cosmetics, handbags, clothes, footwear, cellphones and watches.

The seminar on VAT refunds was organised by Thanh Niên Newspaper Joint-Stock Company. — VNS

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Vietnam: Expanding Tourist VAT Refund Incentive

Vietnam is widening its special value-added tax (VAT) scheme for exports by temporary visitors to the country. This scheme will enable more temporary visitors to Vietnam to claim refunds in respect of value added tax paid on goods bought during their stay in Vietnam and taken with them out of the country when they return home.

A pilot project has been carried out over two years at Noi Bai International Airport (Hanoi) and Tan Son Nhat (the international airport in Ho Chi Minh City). Four of the country’s banks (Vietcombank, Maritime, Viettinbank, BIDV) administered refunds on sales by 69 retailers at 268 stores in the country.

Under the amendments now being pushed through, the refunds will be available to visitors leaving from airports Noi Bai and Tan Son Nhat. The receipts will need to be reimbursed within 60 days from the departure of the visitor from the country. The VAT refunds will relate to sales of more than VND2m in value bought from one store on any particular day. The service fee for the bank will be a maximum of 15 percent of the VAT refund.

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Valued-added Tax in Vietnam: Filing, Payment and Refund

Oct. 1 – Pursuant to the prevailing regulation on Vietnamese tax management, the taxpayer must submit monthly valued-added tax (VAT) returns and settle tax payments on or before the 20th day of the following month in localities where they conduct production or business. Furthermore, in specific situations, business establishments that pay VAT according to the credit method are entitled to a tax refund. This article will examine the filing, payment and refund of VAT in Vietnam.

RELATED: Dezan Shira & Associates’ International Tax Planning Services

Tax Filing and Payment For companies adopting the direct method of VAT calculation , the tax finalization must be made no later than the 90th day from the end of calendar year. Payment has to be made in Vietnamese dong (VND) directly to the State Treasury in cash or through the taxpayer’s bank account.

Taxpayers that declare and pay VAT using the credit method , and have dependant accounting production establishments (including processing and assembling establishments) located in provinces or cities other than the locality where they are headquartered, shall pay VAT both in localities where their production establishments are based and where they are headquartered.

Dependent accounting production establishments that conduct cost-accounting activities following the Vietnam Accounting Standard should register for tax payment using the credit method in localities where they conduct production activities. They should use value-added invoices as a basis for tax declaration and payments in these localities when delivering their semi-finished or finished products to other establishments, including their headquarters.

If dependant accounting production establishments fail to conduct cost-accounting activities, taxpayers at headquarters should pay 2 percent VAT (for goods subject to the VAT rate of 10 percent) or 1 percent VAT (for goods subject to the VAT rate of 5 percent) of the VAT-exclusive turnover of products they produce in the city or province where they are located. VAT amounts already paid by taxpayers for their dependent accounting production establishments will be deducted against their payable VAT amounts in localities where they are headquartered.

Tax Refund As previously mentioned, business establishments using the credit method of VAT calculation may be entitled to a tax refund in the following situations:

• They have input VAT amounts that have not yet been fully credited for three or more consecutive months;
• They have new investment projects and VAT amounts on purchased goods or services used for an investment of VND200 million or more that have not yet been fully credited;
• Upon ownership transformation, enterprise transformation, merger, consolidation, separation, split, dissolution, bankruptcy or operation termination, they have an overpaid VAT amount or input VAT amount that has not yet been fully credited; or
• Business establishments that export goods or services are entitled to VAT refunds on a monthly basis if they have a non-credited input VAT amount of VND200 million or more.

To obtain a tax refund, business establishments have to submit an application dossier to the tax authority in charge. Taxpayers who have properly observed tax law and have their transactions paid for via commercial banks or other credit institutions are eligible to obtain tax refunds before the authorities examine the application dossier. The tax authorities with jurisdiction over VAT refunds must approve the VAT refund within 15 days from the date of receipt of a complete file. For other taxpayers, dossiers should be examined before a tax refund is made. The time limit for resolution of a tax refund is 60 days from the date of receipt of a complete file.

In practice, the tax authorities tend to insist on offsetting the VAT refundable amount against other tax liabilities that the taxpayer may have in the future, rather than refunding the amount. Otherwise, in most cases, it usually takes two to six months from the date of submitting documents to the date of actually receiving the refund. In addition, VAT refunds often involve a tax audit to review the supporting documentation and invoices.

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How to refund tourists tax for purchases in Vietnam

This article has been translated from Russian language using an artificial intelligence-based translation algorithm. We apologize for any inconvenience caused by the quality of the translation. You can read the original version of this article in Russian here , and ask questions on the topic of our travel forum in English here .

As in many other countries, in Vietnam since 2011, the VAT refund system has been introduced, which allows tourists to return part of the cost of expensive purchases when leaving the country. Return 85% of the amount of tax paid, which is included in the cost of the goods, while the tax itself is about 10% and depends on the type of goods, i.e. as a result, you can return about 8.5% of the total cost of the goods, and sometimes more. If we talk in more specific figures, then, for example, if you buy an expensive souvenir for $ 200, for example, then at the check-out you can return $ 17.

To benefit from a tax refund, certain conditions must be met:

• You are not a crew member of an air or sea vessel.
• The product must be purchased in a store that can issue the appropriate documents for return. You can find out about this from the sellers in the store itself.
• The goods must be purchased no earlier than 30 days before departure, i.e. if you are vacationing in Vietnam for several months, it is better to postpone such purchases for the last month of your stay.
• The amount of each of the purchases in one store must be at least 2,000,000 VND for one day (approximately 78.61 USD., see Vietnam's currency and exchange rate ). If you purchase an item from the same store on different days, such a purchase will unfortunately not be counted for a tax refund. The upper bar for the amount is not set.
• The goods should not be among those prohibited for export from Vietnam (see Vietnam Customs rules, what can and can not be exported).
• Hanoi airport-Noi Bai International airport
• Ho Chi Minh City Airport-Tan Son Nhat International airport
• Nha Trang Airport-Cam Ranh International Airport
• Seaport Nha Trang - Nha Trang seaport
• Da Nang Airport - Da Nang International Airport
• Da Nang Seaport-Da Nang port
• Seaport Ho Chi Minh City - Khanh Hoi International seaport
• Phu Quoc Airport - Phu Quoc International Airport
• Con Dao island Seaport - Ben Dam Con Dao Seaport

How to refund tax for purchases

The stage of returning part of the purchase price begins with the purchase itself. First of all, do not forget about the conditions that the goods must be purchased no earlier than 30 days before departure from the country, and that the purchase amount in one store for one day must be at least 2,000,000 VND. You also need to clarify before buying whether this store is included in the tax refund system.

Immediately upon purchase, you will need to issue a special document on the form (all this is done by the sellers themselves), for which you will need your passport.

The tax refund itself is made at the airport before departure after check-in and receipt of a boarding pass. After that, you will need to proceed to a special counter or office of VAT refund (it is easy to find them, they are marked at each airport).

There you need to provide a document and a check from the store, passport, boarding pass, and the purchased goods themselves. Especially do not forget about the last item and do not hand over the purchased items in the luggage, otherwise after check-in you simply can not present them at the counter, because the luggage is handed over at check-in. After verification, you will receive the refund amount in cash dongs, which can be changed right here at the airport, back into dollars or another currency. The exchange rate at airports in Vietnam is acceptable.

Taxes and Tips in Vietnam – What You Need to Know

Updated: 03/30/2016

Tax Refund For Tourists In Vietnam

Tips – a guide to tipping in vietnam.

VAT tax of Vietnam is 10% on those luxury items like cigarettes and alcohol; 10% for bars, hotels, and nightclubs, and 5% for the majority of other goods and services. Larger hotels, particularly joint-venture and state-owned operations, usually add another 5% service tax. Tourists should ask about added taxes before ordering or checking in.

According to a new VAT refund program for travelers, it is allowed to fly out of Hanoi, Saigon City or Danang to be refunded for the VAT value incurred on the invoiced purchases of 2.000.000 VND (approximately $100) or more, which are made within the past 30 days. A service charge of no more 15% of the VAT refund will be charged, and certain goods, particularly those whose export is not allowed, are not eligible for the refund. Those refund counters in the departure office will offer tourists who have cleared immigration their own refunds in dollars or any other currencies.

In terms of airport departure tax, there is an international departure tax of $14 in Hanoi and $12 in Ho Chi Minh City. Domestic departure taxes are often included in the air fare.

With domestic flights, from Saigon, Hanoi or Danang, the tax of VND 25,000 each person (about $1.7) is always added the ticket fare. The tax for departing from Hai Phong and Hue is VND 20,000 each person (about $1.3) while from other airports is VND 15,000 each person (about $1).

Vietnam is a beautiful country blending many different cultures, and its population is made up of different ethnic groups. Hanoi, the capital city of Vietnam, is a modern city continuously seeing fast change, whilst the economic hub of this country is Ho Chi Minh City, also known as Saigon.

Vietnam dong is the official currency in Vietnam. Nevertheless, due to the development of global integrity, United State dollars are also accepted in many tourist destinations. If you are visiting Vietnam, then just make sure that you exchange your home town’s money to their currency so you will be more flexible for trading here. Besides, it is important to know that at most tourist attractions, both locals and tourists buy items via bargaining. Upon bargaining, try to be polite, never argue. You may always want to get the best price as your desires, yet if you could not, do not get upset.

If you are traveling to Vietnam, you have to be familiar with the tipping etiquette here. The custom of tipping in Vietnam seems to confuse many foreigners. The tipping practice was not popular at all in Vietnam, until the rising waves of tourist industry brought many western influences, including the practice of tipping.

In general, tipping in Vietnam is not expected much, yet it is highly appreciated. Vietnam waiters and workers in general, do not ear much money, so they always appreciate the money to be made in tips. Tipping is particularly common in two big cities, Hanoi and Saigon, and other main cities. You can use both Vietnam dong and US dollars for tips.  Expats might have to use your sensitivity when it comes to tipping in Vietnam, as Vietnamese people are the ones with great pride and there might be rare cases when tipping could lead to offence.

Here are some guidelines for tipping in different places in Vietnam:

• Restaurants:

A lot of upscale hotels and eateries also include charge in the bills and this can be anywhere from 5 to 10 percent. Nevertheless, this amount hardly reaches the service staff. In case the management sends some of that amount their way, it is most likely to be a meager amount. A tip of about 100,000 VND per person is customary if the service has been outstanding. This number often applies to those higher priced services. There is a common fact that sampling Vietnamese street food is something many expats are bound to do when staying in Vietnam. It is not a customary to tip for locals at the street food stops, yet you could still leave a tip if you experience excellent service. The tip is generally of about 20,000 VND.

If you are an expat, you might need to stay at some certain hotels here either during your first days in the country or whilst traveling around it later. In regard to tipping at hotels, the level and satisfaction of service the determining element. If you are not especially happy with the supplied service, you are obligated to send a tip at all. Yet, in other cases, leaving a few dollars for good housekeeping service is proper. Also, you could give the bellman one dollar for each of bags he carries. In case you have been pleased with the general service at your chosen hotel, you could leave a small amount of at the desk before checking out.

It is not required to tip those taxi drivers in Vietnam, and the driver will also not be offended in case you do not send him a tip. Nonetheless, many international tourists decide to round off the total amount and allow the driver to keep the change, if they really feel that the driver was especially helpful and efficient.

In Vietnam, spa services are not as too expensive as they are in those Western countries. Yet, this is what makes foreigners confused about whether or not to tip in such situations. Oftentimes, the most custom is leaving a few dollars at the less expensive spas. For those more upscale ones, they will often include from 5 to 10 percent of service charge in their bills, which essential covers your own tip. However, if you feel your experience deserve a small reward, then go ahead to leave a tip.

• Hairdressers:

In Vietnam, hairdressers do not receive many extra tips, so if they do, it is highly appreciated. You could leave an extra tip of 10 to 15 percent of the total bill in case you feel that you really received good service.

Some other tips on tipping in Vietnam are:

– There is no standard percentage or amount for tipping in Vietnam

– People rarely tip at the street-food stops

– If you want to tip hotel staffs, just gently ask if there is a community tip box

– When someone politely declines your great tip, then thank them and take back your tip, please do not overly press that issue as it is normal Vietnamese culture.

– For a one-day tour, a fair tip for tour guides is between $5 and $10, and for drivers is 50% of it. Yet, it is totally up to you, you could even give more than the usual standard if the staff do great job.

For multi-day tours, the tip depends on how long that trip was, your tour guide’s quality, your satisfaction, and so on.

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Tax refund at Vietnam airport: frequently asked questions

Value Added Tax (VAT) refund service is applicable to all foreigners using valid passports, not issued by competent Vietnamese State agencies. If you enter and exit Vietnam and are not a member of the flight crews on flights from Vietnam to abroad, you will be entitled to a tax refund at Vietnam airport .

TABLE OF CONTENTS

How to get a tax refund at Vietnam airport?

In order to receive a tax refund, passengers must buy goods at business establishments conducting a pilot sale of VAT refund goods in Vietnam and bring such goods with them when leaving the country.

What types of goods are eligible for tax refund?

• Belonging to the group subject to VAT, have not been used and are allowed to be brought on board in accordance with the law on aviation safety;
• Goods not on the List of goods banned from export or the List of goods restricted from export;
• There are invoices cum tax refund declarations issued within 60 days before exit procedures;
• The value of goods stated on the invoice cum tax refund declaration purchased at 1 store in 1 day (including adding multiple purchase invoices in the same day at 1 store) is at least 2 million VND or more.

What documents do you need to get a tax refund at Vietnam airport?

1. in case vat refunded goods are placed in checked baggage.

Passengers present goods and related documents as follows for customs inspection:

• Goods with VAT refund;
• Passport (original);
• Invoice cum tax refund declaration certified by a qualified business establishment and stamped with the customs authority’s “Agreement for tax refund” stamp (original).

Note: Passengers who need a tax refund must check-in early to promptly complete the procedures at the tax refund counter (near departure gate 8-9).

2. In case VAT refunded goods are placed in hand luggage

After completing the check-in procedure, passengers bring the following goods and documents to the counter to the tax refund counter for customs inspection and tax refund procedures:

• Boarding pass;

How much will I get and when will I receive the VAT refund?

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Passengers will receive an amount of refund as 85% of the total amount of VAT amount noted in the invoice, as well as stated in the VAT refund declaration form.

The other amount of 15% is charged as a refunding fee for the bank. In genereal, you uiwll be able to receive the refund immediately right after you finish the VAT refund procedure.

Where can I purchase goods that are applicable for a VAT refund at Vietnam airports?

Apparently you can shop at most of the shopping malls in HCM city such as Parkson, Diamond Plaza, Vincom,  Takashimaya, Gigamall, Crescent Mall…

Lastly, make sure you give yourself enough time to sort out the claim and check-in before departure. With this article about tax refund in Vietnam airport , we are able to provide some important information about VAT refunds. Wish you have a nice trip, wherever you are heading to!

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Tax refund at Vietnam airport: What is the timing of bank for Refund? I have flight at 2AM morning. Can I avail tax refund?

The timing for tax refund at Vietnam airports depends on the regulations set by the airport and the airline. However, in general, it is possible to process tax refunds at 2 AM in the morning since airports typically operate 24/7. To be certain, it is advisable to contact the airline’s hotline or send a message to their official fanpage. They will provide you with the most accurate and up-to-date information regarding the tax refund process at the specific airport you will be departing from.

Where you able to claim the refund? I also have a late night flight. Not sure if the refund counter will be open

I have taken some goods from Vietnam and I took vat refund copy also but there was no one available in office at 2am I waited for 15mins nobody was there. So I came to india without refund. Is there any possibility now to claim back online?

Where is the location at the airport for custom inspection of the items for refund?

The location for customs inspection of items for refunds at an airport varies depending on the airport’s layout and procedures. When you arrive at the airport, you can inquire about the location at the information desk or approach a customs officer for guidance. They will direct you to the appropriate area for the inspection of items and processing refunds.

I was trying to buy an iPhone to Viettel store but they said they don’t provide any tax refund form. Only the invoice of the purchase good. I don’t think this is enough to get the tax refund at customs. It looks that very little shop are able to proceed which is a limitation for tourism

Hi Jean, Did it work with Viettel invoice at the airport?

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• Vietnam: Expediting VAT refunds

GDT instructing provincial tax departments to focus on accelerating VAT refund handling process

GDT instructing provincial tax departments to focus on accelerating VAT refund handling

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The Prime Minister in May 2023 issued Official Telegram 470/CD-TTg on the continuing implementation of measures and tasks to ease difficulties for businesses. The Prime Minister instructed the Ministry of Finance to conduct appropriate examination and evaluation and urged the General Department of Taxation (GDT) to take actions to process the value added tax (VAT) refund dossiers submitted by taxpayers in a timely and effective manner.

The GDT has since issued several official letters instructing the directors of provincial tax departments to focus on directing divisions to accelerate the VAT refund handling process, and at the same time monitor the implementation of the VAT refund procedure.

Read a July 2023 report [PDF 197 KB] prepared by the KPMG member firm in Vietnam

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.

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How to get tax refund at tan son nhat international airport.

Ho Chi Minh City is a dynamic city known as the economic center of Vietnam. There are thousands of famous branches here to fulfill your shopping indulgences. If you intend to buy some luxurious products while visiting Ho Chi Minh City, this guide will help you get some money back regarding the VAT refund at Tan Son Nhat International Airport (SGN) . Check out our answers to some frequently asked questions:

Q: Who is eligible to claim a tax refund at Tan Son Nhat International Airport (SGN)?

A: You are eligible to claim for a VAT refund at Tan Son Nhat International Airport if you

• Hold a valid passport, which is not issued by Vietnamese authorities, when entering or exiting Vietnam;
• Must not be a member of the flight crew;
• Purchase goods from enterprises selected to implement the VAT refund.

Q: What are the requirements for VAT-refunded goods?

A: VAT refunded goods must meet the following requirements:

• Subject to the VAT, unused, and allowed on aircraft according to Vietnam’s civil aviation law;
• Not on the list of export prohibitions or restrictions;
• Invoices and VAT refund declaration form issued within 60 days before departure date;
• Valid invoice and/or accumulated invoices within 1 day from 1 store of goods costing at least 2 million VND.

Q: What to prepare for a tax refund at Tan Son Nhat International Airport?

A: These are the paperwork you should prepare for a VAT refund claim:

• Passport (original)
• Boarding pass (original)
• Invoices and VAT refund declaration form provided by the enterprises where you purchased the products (original)
• The goods you want to claim the VAT refund

Q: What is the tax refund procedure at Tan Son Nhat International Airport?

A: If you want to purchase VAT refund goods, here is the normal procedure.

When purchasing goods in stores selected to implement the VAT refund, you must present a valid passport (original) to get the invoices and instructed to fill in the VAT refund declaration form;

Before doing the procedures to check in luggage, you must present paperwork  1, 3, 4 (in the above question) to customs officers at VAT Refund Goods Customs Inspection Counter to get a “Checked” stamp and the total VAT refund calculated;

The VAT Refund Goods Customs Inspection Counter is located at the left-end corner of all of the check-in counters

At VAT refund counters inside the airport, you must present 1, 2, 3 (in the above question) stamped “Checked” by customs authority to one of the authorized commercial banks below to receive the VAT refund. Note that regular business hours apply. If your flight time is outside of business hours, the counter is closed.

Q: Which banks can I approach for a VAT refund at Tan Son Nhat International Airport?

A: Inside Tan Son Nhat International Airport, two banks—BIDV and VietinBank — are assigned to resolve the VAT refund claim.

Q: How much and when do I receive the VAT refund?

A: You will receive a refund as 85% of the total amount of VAT amount noted in the invoice and VAT refund declaration form ; the other 15% is charged as a refunding fee for the bank. You are supposed to receive the refund right after you finish the VAT refund procedure and before you get on board .

Note that the VAT refund currency is VND . According to the current exchange rate, you can exchange from VND to foreign currencies at VAT refund counters or the currency exchange kiosks in the airport.

Q: Where can I buy goods that are applicable for a VAT refund at Tan Son Nhat airport?

A: Here are some places where you can purchase VAT refund goods in Ho Chi Minh City:

Shopping Malls in Ho Chi Minh City :

Parkson Plaza, Diamond Plaza, Vincom, Union Square, Takashimaya, Crescent Mall, Zen Plaza

Or you can approach these branded stores to purchase VAT refund goods like clothes, and souvenirs:

Viet Tien Garment Joint Stock Company; Duy Anh Fashion & Cosmetic Co., Ltd; Au Chau Fashion & Cosmetic; Chau My Fashing & Cosmetic Co., Ltd; Omega Boutique; Tic Tac Boutique; Kien Lam Handicraft; Phong Vu Computer.

Above is our guide about the VAT refund at Tan Son Nhat International Airport (SGN). Make sure you allow yourself enough time to sort out the claim and check-in before departure . We hope they will be helpful in helping you claiming VAT refunds, and wish you a nice trip in Ho Chi Minh City, Vietnam .

Source:  Vietnamtourism .

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Understanding VAT Tax Refund In Vietnam For Foreign Companies

Vietnam has emerged as an attractive destination for foreign companies seeking new opportunities and markets. As you navigate the complexities of doing business in this vibrant country, one key aspect you need to be well-versed in is value-added tax (VAT) and the potential for VAT tax refunds.

In this comprehensive guide, we will walk you through the ins and outs of VAT in Vietnam, what a VAT tax refund entails, the requirements for eligibility, and how you can streamline the process.

What is value-added tax (VAT) in Vietnam?

In Vietnam, Value-Added Tax (VAT) is a fundamental consumption tax, applicable to a wide range of goods and services, irrespective of residency. However, exports and services to international customers are usually VAT-exempt.

VAT in Vietnam operates as an indirect tax on local consumption, with tax collection occurring at every stage of production and distribution, ultimately impacting the final consumer. For imported goods and services, VAT is calculated based on the duty-paid value, and importers must settle VAT and import duties during customs clearance. In specific cases, VAT may be computed on the selling price, inclusive of special consumption and environment taxes.

Vietnam’s VAT system is governed by the country’s Law on Value-Added Tax. Companies determine their VAT liability using either the direct method (primarily for specific industries like gold and gemstone processing) or the more commonly used indirect (credit) method.

What is a VAT tax refund in Vietnam?

A VAT tax refund in Vietnam signifies the reimbursement of value-added tax (VAT) to eligible taxpayers from the state budget under specific circumstances. These refunds aim to rectify overpayments or reduce tax burdens for various entities.

Requirements for a VAT tax refund in Vietnam

To secure a VAT tax refund in Vietnam, businesses must:

• Submit an application dossier to the relevant tax authority.
• Ensure compliance with tax laws and use commercial banks for transactions.
• Obtain pre-approval for refunds within six working days (in certain cases).
• Be prepared for potential tax audits during the refund process.

Required documentation comprises the Enterprise Registration Certificate (ERC), a company stamp, Investment Registration Certificate (IRC), accounting records, a designated bank account, and a correctly completed refund application. Be aware that the refund process typically spans two to six months and frequently entails a tax audit.

What is the regime for corporate VAT refunds in Vietnam?

Corporate VAT refunds in Vietnam are available to businesses that meet specific criteria, including but not limited to the following:

• Credit Method Usage – Businesses adopting the credit method for VAT declaration and engaged in the production or sale of goods or services subject to VAT are eligible for VAT refunds.
• Investment Phase – Enterprises currently in the investment phase and having initiated their operations can apply for VAT refunds.
• Accumulated VAT Credits – Businesses accumulating creditable input VAT exceeding 300 million Vietnamese dongs (approximately $12,860) on goods and services purchased for business activities qualify for VAT refunds.

While these conditions offer clear guidelines, the VAT refund process can be intricate, and enterprises may encounter potential risks and obstacles along the way.

VAT refund application

When applying for a VAT refund in Vietnam, enterprises should be mindful of common issues related to licenses, charter capital, and business operations:

• Investment Period – Ensure that the registered investment period aligns with the actual completion time. If input VAT falls outside the investment timeframe, it won’t be refunded but can be carried forward.
• Conditional Business Lines – Verify that your investment projects meet the requirements for conditional business lines as mandated by laws and regulations. Obtain any necessary sub-licenses according to the prevailing rules.
• Charter Capital – Contribute the required registered charter capital and provide valid evidence of capital contribution, whether in cash or assets.

Refunds under the investment phase

During the investment phase, revenue generated from selling samples might face scrutiny from local tax authorities. Tax officers may attempt to limit the VAT refund period related to testing revenue and potentially reduce the total refund amount after a tax audit.

Input VAT from purchases

Issues often arise concerning the disallowed refund or credit of input VAT. These issues may be due to non-compliance with legal regulations for supporting documents or failure to meet non-cash payment requirements. Incomplete payments for goods and services purchased for investment projects can lead to non-compliance, especially when enterprises engage in both business operations and investment projects without proper record-keeping.

What are the common VAT refund errors?

Mistakes on VAT refund applications can lead to delays or rejections. The common errors to avoid include:

• Unclear Business Status – Failing to block the requested VAT refund amount before commencing business operations can lead to complications.
• Bank Account Registration – Not registering the designated bank account for receiving the refund amount or complying with e-tax payment regulations as per the law
• Incorrect VAT Declarations – Non-compliance with VAT declaration forms can hinder the refund process.
• Unjustified Tax Return Adjustments – Making multiple tax return adjustments without valid reasons when dealing with the tax authority can lead to complications and potential rejections.

How Can We Help- Taxation Service 

At Premia TNC , we specialize in Vietnamese tax regulations , particularly VAT tax refunds. We offer expert guidance on navigating the intricate tax landscape and optimizing VAT refunds. With a deep understanding of Vietnamese tax laws, we ensure compliance and identify VAT refund opportunities specific to your business. Ready to optimize your VAT tax refunds and ensure compliance in Vietnam? Contact us today for a free consultation. Our experts are here to help you make the most of your financial operations in the Vietnamese market.

Who is eligible for VAT tax refunds in Vietnam?

Various entities, including exporters, businesses with new investment projects, and those involved in specific programs or projects, may be eligible for VAT refunds based on specific criteria.

What are common VAT refund errors to avoid?

Common errors include unclear business status, issues with bank account registration, incorrect VAT declarations, and unjustified tax return adjustments. Avoiding these errors is crucial for a successful refund process.

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How to get vat refund in vietnam.

How to get VAT refund in Vietnam – Accordingly, from 1 July 2014, the new Circular No.72/2014/TT- BTC on value- added tax (VAT) refund for purchases made in Vietnam has been officially implemented which allows foreigners, overseas Vietnamese to receive VAT refund when leaving the country. Under this new plan, foreigners are entitled to obtain a refund that account for 85 percent of VAT on eligible goods that were purchased at VAT refund shops. VAT refund currency is VND.

According to the Ministry of Finance, VAT refunded goods must live up to these four requirements:

1. The purchased goods must be subject to VAT, unused and is allowed on aircraft.

2. The purchased goods must not appear on the list of export prohibitions or restrictions.

3. The purchased goods must have invoices and VAT refund declarations issued within 30 days of departure.

4. The purchased goods must be bought from a single shop in one day duration and must be value of at least VND 2.000.000

How to get the VAT refund?

1. At the payment counter, inform the staff that you would like to have the Tax Refund Receipt. The staff will ask for your passport to create the VAT refund declaration form. Then they will issue you an original copy of the tax refund receipt. Keep your original receipts and tax refund receipt.

2. Before departing for airport, you should pack the purchased goods, your passport along with the invoices and VAT declaration form separately for easy retrieval during inspection at the airport. The airport staff will ask to see these items, therefore you should be get ready for them to be inspected.

3. Upon arriving to the airport, head over to the VAT refund customs inspection office to present all the items mentioned above.

4. Once you’ve finished all the paperwork to get your declaration form, the staff will collect your boarding pass. You will then bring your check- in- luggage to the Tax Refund Desk, where you will receive your refund. The refund will be in Vietnam Dong so you will have to head to a currency exchange. At Noi Bai, there is a Maritime Bank and Vietcom Bank while you will find BIDV and VietinBank exchanges in Tan Son Nhat airport.

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VAT refund for tourists

Taxwise Or Otherwise

By Marion D. Castañeda

A f ter the Director-General of the World Health Organization declared an end to COVID-19 as a global health emergency, many of us grew eager to return to life as we knew it before COVID-19. Tourism was one of the hardest-hit industries during the height of the COVID-19 pandemic due to the mobility and international travel restrictions that were aimed at reducing the spread of the virus. Now, although many of us remain cautious and continue to wear face masks despite the lifting of most mask mandates, “revenge travel” — to make up for lost time — is a high personal priority for many.

While there are broader factors that will boost tourism (airport capacity and infrastructure, to name two), one proposal aims to improve our attractiveness as a travel destination from a tax perspective. Under House Bill (HB) No. 7292, non-resident tourists would be allowed to obtain a value-added tax (VAT) refund on their purchases of goods worth at least P3,000. The bill was approved by the House of Representatives on third and final reading, and the President himself has signaled his backing for the proposal in principle.

INTERNATIONAL PERSPECTIVE The concept of recouping VAT or similar consumption taxes on foreign tourists’ purchases is not new. In fact, according to the House Ways and Means Committee Chairman, we are one of the last few Asian destinations that do not have a tourist VAT refund system. To better understand this proposal, let’s take a brief look at some of our neighbors.

In Indonesia, Malaysia, Singapore, Thailand, and Vietnam, the general procedures can be outlined as follows: 1) obtain and keep the tax invoices for eligible purchases; 2) show travel documents together with the invoices and the goods purchased (and not consumed) to the refund counter at the airport; and 3) claim the tax refund, most commonly in cash (local currency). Naturally, each jurisdiction has its own set of procedures and rules regarding controls (some have specific “tax-free” shops), purchase or tax amount thresholds, the number of days between when the purchase was made and when the refund is claimed, and even the actual refund mechanism (some allow refunds via credit card reverse charge). Nevertheless, the overarching procedures appear quite similar.

Outside of ASEAN, Taiwan seems to have similar procedures as outlined above, albeit with an option to use an “E-VAT Refund Machine” instead of proceeding to a refund counter. Interestingly, Japan has a drastically different approach: either a) pay for the purchase with consumption tax already deducted upon presentation of a passport, or b) obtain a refund by visiting the designated tax exemption bulk deduction counter (in-store, not at the airport) and presenting the purchased goods, receipt, and passport.

CURRENT PHILIPPINE VAT RULES The purchase of goods within the Philippines is generally subject to 12% VAT. As an indirect tax, VAT is passed on to and shouldered by the buyer. As a tax on the “value added,” the ultimate consumer or end-user primarily bears the cost of VAT. This burden is especially felt by individual buyers, who are typically not VAT-registered and do not have the benefit of claiming input VAT credits on their purchases.

The proposal for VAT refunds on tourist purchases would add Section 112-A to the Tax Code, the salient portions of which read as follows:

“SEC. 112-A. TOURIST VAT REFUND. — A tourist shall be eligible for a value-added tax (VAT) refund on goods purchased from accredited retailers in the Philippines if such goods are taken out of the country within sixty (60) days from the date of purchase, and the value of goods purchased per transaction amounts to at least three thousand pesos (P3,000.00) …

For purposes of this section, a ‘tourist’ shall refer to a foreign passport holder, who is a non-resident individual not engaged in trade or business in the Philippines.”

The proposal seems simple enough. Tourists who are foreign nationals and not residents of the Philippines can refund the 12% VAT imposed on goods that they purchase within 60 days before they leave the country. The bill authorizes the Secretary of Finance to promulgate the rules and regulations for the law’s implementation. It appears that the legislators prefer giving leeway to the executive branch as to the exact mechanics of the VAT refund process.

POINTS FOR CONSIDERATION According to the Presidential Communication Office, the VAT refund program for foreign tourists is targeted for implementation by 2024 and is billed as an effort to boost tourist arrivals. The counterpart Senate bill still faces hearings at the Senate Committee on Ways and Means at this writing. Nevertheless, here are a few salient points to consider about the pending measure:

1) Administration: With the ultimate goal of boosting tourist spending in mind (thus helping retailers generate more sales and growing our economy), the government should ensure that rules or requirements are simple to comply with for retailers.

2) Convenience: From the foreign tourists’ perspective, a tedious process for obtaining a VAT refund will discourage them from applying in the first place, in turn discouraging them from spending. It bears highlighting that, at 12%, we have the highest VAT rate in ASEAN.

3) Safeguards: As a refund program, this measure will likely entail funds to be programmed into the government’s annual budget. As with any government-funded measure, policies for transparency and governance must be strictly enforced.

As we welcome foreign visitors, we can, in addition to showing them a great time at our beaches and other destinations, perhaps they will also buy more “ pasalubong ” for their loved ones back home — VAT-free, if this proposal becomes law.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

Marion D. Castañeda is a senior manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2)8845-2728

[email protected]

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A Guide to the Value Added Tax (VAT) Refund for Travelers

I f you've never heard of the VAT refund, get ready to see some serious financial returns the next time you go shopping abroad. If you're looking for the best price on a high-end item, you might be able to save thousands of dollars by waiting to buy it overseas. (Discount luxury shopping: It's not an oxymoron.) Here's the breakdown on how to save money with VAT.

What is VAT?

VAT-sometimes redundantly called VAT tax-stands for value-added tax. This tax is associated with shopping in the European Union, though more than 160 countries around the world use value-added taxation. It's a sales tax paid by consumers (not businesses), and it doesn't exist in the United States. Only visitors-including U.S. tourists-are able to qualify for a VAT refund.

Keep in mind, VAT is often factored into the price of a product (so a €100 dress with a 20 percent VAT rate might have a price tag of €120). Other times, it is listed on the receipt. Ask a sales associate wherever you're shopping if it's unclear.

The rate of VAT in Europe varies depending on where you're visiting and shopping, and it ranges from 7.7 percent in Switzerland (technically not an E.U. country, and it's set to increase its VAT to 8.1 percent in 2024) to 27 percent in Hungary. The average VAT rate in the E.U. is 21.3 percent , and the minimum in the E.U. is 15 percent. Deloitte provides a very useful country-by-country breakdown .

But rates can also vary depending on what you're buying. For example, food and pharmaceutical products are typically taxed at a lower rate than leather goods like shoes and handbags.

Can you get a VAT refund in the U.K.?

It depends: Travelers were allowed to do so throughout the U.K. up until December 31, 2020, but Brexit put an end to VAT refunds. Currently, the only country in the region that offers VAT refunds to overseas visitors is Northern Ireland.

What qualifies for a refund?

Almost all luxury goods-including clothes, shoes, cosmetics and skincare, jewelry, handbags, leather goods, and art-will have a value-added tax. Many items qualify for a VAT refund, but it's important to note that only new goods (not used) can be claimed. Each transaction also has to be over a certain threshold, and this threshold varies by country. For instance, you have to spend over €100 per transaction in France to qualify for a VAT refund. This means you can buy several products at one store for a total of more than €100, but if you spread those same items out over multiple stores, you would not get to claim the refund. You can also make a single large purchase over €100 at many different stores and claim for each transaction.

Your items are supposed to be unused when you declare them. That said, you can typically get away with using your new handbag or coat. But you may want to hold off on breaking in those new leather slingbacks before you present them to customs. You also will want to ensure that items you are declaring are recent purchases because you must make your claim within three months of leaving the European Union.

Items that do not qualify for a VAT refund

• Vintage items -Those vintage Chanel clip-on earrings you bought from the Marché aux Puces de Saint-Ouen? The (probably very good) price you paid is final. No refunds here.
• Goods purchased in the tax-free zones of airports -because there is nothing to refund
• Transactions that do not meet the minimum threshold
• Services -including hotel stays, restaurant meals, and tour guide fees-because these are experienced abroad and not brought home
• Anything you aren't bringing back to the United States . The goods have to come home with you.
• Cars - unless the vehicle is being used exclusively for business purposes, in which case you can get up to 50 percent back on your VAT
• Alcohol and tobacco
• Counterfeit items -This may seem obvious, but a faux Dior tote does not qualify for VAT (and in France, purchasing a counterfeit is a criminal offense).

What you need to do while shopping

• Make sure you have your passport with you before you start shopping -you'll have to provide proof that you are a visitor . If you're shopping specifically to get a discount, ask the shop if it participates in VAT refunds and if it has a specific purchase-amount threshold. On occasion, smaller shops and boutiques do not participate, therefore you will not be able to get a VAT refund on that purchase. It's best to know before you start shopping.
• Ask for paperwork at each place you shop -the sales assistant, cashier, or store manager should have information. Occasionally, stores can process a refund for you on site (called "instant refund"), but most use Global Blue, Premier TaxFree, or another third-party to handle the refund process. [Author's note: I shopped at some of the largest stores in Paris-Le Bon Marché, Liberty, Louis Vuitton, Chanel-and was unable to get the instant refund at any of them.]
• Don't leave the store without signed, official documents. Many department stores have a VAT office, such as Galeries Lafayette Haussmann in Paris. These offices will help you get your paperwork sorted. Staple your receipts to your forms, and keep them in a safe place so you can access them when you're claiming your refund.
• Ask for a second receipt. You may want this for U.S. customs upon your arrival home.
• Try to group purchases at boutiques into one transaction , because you may get a higher rate of return. Don't buy a bag at Hermès and then come back later to get a scarf. If you can, buy them both at the same time.

How to collect your refund

When you're ready leave the E.U.-your last port of departure-make sure you have your goods ready to declare and your paperwork completed, then head to the airport well in advance of your flight. Keep in mind, if you're traveling around multiple European countries, you do not go through this process each time you leave and go somewhere new within the continent (even if you're going to a non-E.U. country, like Norway or Switzerland).

The refund process is completed on your final departure when you're headed home. Your forms should have instructions on what steps to take (and where to go), but here's what to do.

• Find a VAT counter. You'll want to identify your options in advance of your flight so tracking them down is easier on the day of your travel- Moneycorp , Planet , and Global Blue are fairly common. Check your individual airport's website for more information; some will have detailed instructions specific to their location.
• Some airports may offer a dropbox when there's no one there to check your paperwork. This is relatively rare, but you may run into a situation where there's no one at the counter to take your paperwork. Look for a drop box where you can take your completed paperwork for processing. The downside here is that it can add time to the process if anything is filled out incorrectly or information is missing. So make sure to double-check everything before making the drop.
• Once you've arrived at the counter, present your completed forms and paperwork alongside your passport and boarding pass to the employee. You may need to present certain purchased goods, particularly if they're over €1,000. At this point, if you do have a larger purchase, you will likely be sent to the local customs office to have an officer see your goods and give you a customs stamp. If that step doesn't apply to you, an employee will stamp your documents at the refund counter and either mail them off or hand them to you to drop into a mailbox.
• Choose your refund delivery method. You receive your refund either in cash or as a direct credit back on your credit card. Cash refunds are faster but typically have a higher fee. Credit card refunds can be slower but usually get more money back. Sometimes the refund is instant, sometimes it takes five days, sometimes it takes months. Keep your paperwork in case you have to track down your refund. If you haven't received information in six weeks, it's time to contact the agency.

Now for the less fun news: You do not get the full 15–20 percent VAT refunded. There are unavoidable processing fees that unfortunately cut into the final refund amount, but typically it's a small charge. You can get an estimate on the Global Blue website of what your refund might be.

How this affects your travel home

• Consider adding at least two hours to your travel time when declaring your goods at an airport VAT counter.
• Repack your items into your checked bag after you present them for your refund.
• In addition, you have to declare your goods when you come back to the United States , and a customs officer may want to see your items if you've spent over $800. You may also have to pay duty, depending on the value of your purchase and the size of your party. The first $800 (per person) is tax free, the $1,000 after that is taxed at 3 percent, and beyond that the rate is variable.

Can I just go to the duty-free airport shops?

Yes, but often the products are only slightly discounted from what you'd see outside the terminal. You'll save more money if you go through the VAT refund process.

How to maximize VAT savings

At this point you may be thinking that's way too much effort for a few bucks. To that end, you'd be right-sometimes this is too much if the rate of return is small. The best way to maximize your VAT refund is on larger purchases like luxury items or a group of items at one store.

• Buy something made in the country you're visiting. Purchasing a Louis Vuitton purse in France will save you a significant amount of money compared to buying the same purse in the United States.
• Travel with family. The United States allows $800 per person of duty-free goods. If you travel with a family of four, that's $3,200 collectively of U.S. tax–free import.
• Don't try to avoid U.S. customs tax authorities if your purchase is over $800. This is tax fraud, and you can be fined a major penalty and lose Global Entry status. Your VAT refund is connected to your passport number, so do yourself a favor and go through the process.
• Pay in euros or use a credit card with no foreign transaction fees so you don't incur unnecessary charges.

Some travelers have managed to save substantial amounts on certain luxury goods. Others have had less success, despite following instructions to the letter. But if you've spent a lot on souvenirs in Europe, you'll at least want to try to get that VAT back to offset the duty you'll pay in the United States.

Is there any way to avoid paying the VAT?

Technically, yes. If a store offers home shipping services, you could opt to have your purchase sent directly to your place (thus saving precious packing space!). The shop won't charge the VAT if you go this route. But there's a catch: You'll have to pay for the freight shipping, which can add up very quickly. So carefully weigh the pros and cons-what is the maximum shipping cost that will offset the inconvenience of dealing with the VAT refund paperwork?

This article originally appeared online in 2020; it was most recently updated on January 30, 2024 by Erika Owen, to include current information.