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VAT refund needs to be reviewed and verified

09:02 | 30/11/2022

VCN – The VAT refund for exported goods attracts the attention of enterprises at the dialogue conference on Tax and Customs policies and procedures in 2022.

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VAT refund needs to be reviewed and verified

According to the leader of the Ministry of Finance, the State’s policy is consistent. However, the production and business chain of enterprises shows complicated factors, the management agencies need to review them to ensure effective tax refunds.

Tax refunds need to be reviewed

Mr. Tran Quang Hai, Vice Chairman of Viet An Investment Group Joint Stock Company, said VAT refund is a key policy of the Party and State for farmers and the agricultural industry.

Currently, the company faces problems related to processing VAT refund procedures for cassava starch products. Therefore, the company asked if the company violates the law in exporting cassava starch. If the company does not violate when it will get the tax refund.

Mr. Pham Vu Ha, General Secretary of the Vietnam Cassava Association said the VAT refund for cassava starch is a concern of the cassava industry. Therefore, the association proposed the General Department of Taxation instruct the procedures for tax refunds for enterprises that are issued with investigation results by competent agencies for failing to violate. If the enterprises are identified for failing to violate by the competent authority so why they are responsible for violations (if any) of the partner enterprises.

Agricultural products, agro-forestry and fishery products sold directly by farmers to the market are not subject to VAT.

Responding to this matter, Deputy Director General of the General Department of Taxation Vu Chi Hung, cassava starch, agro-forestry-fishery products are always interests of the State. However, in order to produce cassava starch products for export, it has to go through many processes.

Most businesses have performed their obligations to the State budget and refunded VAT, but some enterprises have taken advantage of the State's incentive policy to make forged documents and false declarations of invoices, causing revenue losses.

Annually, the General Department of Taxation conducts a review to combat VAT refund fraud. In 2019, the tax authority discovered a Phu Tho-based company violated regulations on tax refunds. The country’s top tax regulator requested local tax departments to verify transactions. The verification for foreign enterprises showed that there was no transactions with domestic enterprises.

“The General Department of Vietnam Customs has discussed twice with the Vietnam Cassava Association and agreed with local tax departments and businesses to revise policies. Through the dialogues, the parties have agreed to review and transferred the dossiers of some enterprises to the investigation agencies.

If the verification shows that the enterprises are eligible for tax refund, the General Department of Taxation will direct the local tax authorities to refund taxes for them.

“Because the tax authority is not in charge of the investigation, the authority cannot identify the status of enterprises and goods. The Tax authority always shares difficulties with businesses,” said Deputy Director General Vu Chi Hung.

After this dialogue, the General Department of Taxation will ask local tax departments to work with local tax branches to perform the tax refund quickly in line with regulations, said Mr. Vu Chi Hung.

Enterprises must pay taxes before enjoying tax refund

Regarding VAT refund for export goods, especially tapioca starch as per proposals from the business community, Deputy Minister of Finance Cao Anh Tuan said that agro-forestry-fishery products that are sold directly to the market by farmers, are not subject to VAT, and the commercial stages are not subject to VAT.

If agricultural products are manufactured and processed into refined products for sale, the producers and processors of these products are enjoyed an export VAT rate of 0%.

If producers and processors sell the refined products to domestic enterprises for export business, the domestic enterprises will be subject to the VAT rate of 10%.

After exporting, the domestic enterprises will be refunded the declared and paid input VAT amount if they fully satisfy the prescribed conditions.

Deputy Minister Cao Anh Tuan said only a few enterprises directly possess products. Most enterprises buy back the products through many stages, so the competent authority faces difficulties in verifying the origin of the goods, including verification for the export of goods.

When foreign management agencies and foreign businesses said that there is no transaction between the foreign enterprises and domestic enterprises. However, Vietnamese management agencies still take a lot of time to verify.

90% of enterprises have been refunded taxes. Only 10% of enterprises still face problems related to tax refund dossiers and verification, the Deputy Minister said.

Deputy Minister Cao Anh Tuan said the Tax authority has the responsibility to share and remove difficulties for the enterprise.

“We must comply with the provisions of the law. The Law on Tax Administration and the Law on VAT provides specifically two types of tax refund, including the tax refund first and audit later, and the tax audit first and refund later. Therefore, when a risk is detected, the management system will automatically shift to the process of tax audit first and refund later,” the Deputy Minister said.

VAT refund needs to be reviewed and verified

Deputy Minister of Finance Cao Anh Tuan speaks at the conference. Photo: H.N

The deputy minister said that the State’s policies are consistent. However, the business production chain of enterprises has gone through stages, so the management agency must closely verify and investigate. The enterprises must pay taxes before enjoying tax refunds.

Deputy Minister Cao Anh Tuan hoped that enterprises agree with the enforcement by the Tax authority. Because if the Tax authority performs falsely, it will be responsible before the law. The Tax officers are both assigned tasks of enforcement and compliance with the law while facilitating enterprises and creating equality between well-compliant enterprises and uncompliant enterprises. In addition, the Association is a focal point to protect the interests of enterprises, but should also cooperate with management agencies to combat violations.

According to regulations, domestic exporters will enjoy a 0% VAT tax rate and be refunded the paid VAT if they are eligible for an export tax refund. The VAT refund regulations are specified and clear, creating favorable conditions for enterprises' operations, including goods export activities.

The law also provides provisions on tax refund dossier, including sale contracts, customs declarations, invoices, payment documents.

If the payment is made by a third party via bank (including the case where the seller proposes the buyer make the payment via bank to a third party designated by the seller), the authorized payment or payment to the third party must be stated on the contract and the third party is a legal representative or individual.

Compliance with regulations on the content stated on the payment document made via bank is one of the grounds to prove and authenticate the purchase and export for VAT refund from the State budget.

By Nu Bui/Ngoc Loan