VAT refund procedures: latest regulations under the law on value-added tax (VAT)

The following article by NPLAW provides a detailed analysis of the latest regulations governing VAT refund procedures under the Law on Value-Added Tax, enabling enterprises and taxpayers to clearly understand the process, required documents, as well as main practical considerations in implementation.

The following article by NPLAW provides a detailed analysis of the latest regulations governing VAT refund procedures under the Law on Value-Added Tax, enabling enterprises and taxpayers to clearly understand the process, required documents, as well as main practical considerations in implementation.

I. Current situation regarding VAT refund procedures

Over the past years, VAT refund procedures have become one of the issues attracting significant attention from the enterprises. In principle, the VAT refund mechanism is established to safeguard the legitimate rights and interests of taxpayers and support export and investment activities. However, in practice, a number of difficulties and obstacles remain:

Large volume of refund applications but limited processing rate: According to reports from the General Department of Taxation, the tax authorities receive tens of thousands of VAT refund applications annually, primarily from exporting enterprises and investment projects. However, processing remains slow and often exceeds statutory time limits, adversely affecting enterprises’ cash flow and business operations.
Administrative procedures remain complex: Although electronic systems for tax declaration, payment, and refund have been implemented, in practice, enterprises are still required to prepare numerous supporting documents and records. In some cases, tax authorities request additional documents multiple times, resulting in increased time and compliance costs.
Risk of fraud and policy abuse: The misuse of VAT refund mechanisms to appropriate State budget funds continues to occur, notably through invoice fraud and overstatement of export values. It compels tax authorities to tighten control measures.
Inconsistent application of laws: Certain legal provisions on VAT refunds remain ambiguous, leading to differing interpretations between enterprises and regulatory authorities. Inconsistent application across localities leads to complaints and disputes.

II. Legal provisions governing VAT refund procedures

1. What are VAT refund procedures?

VAT refund procedures refer to the process by which an enterprise or individual submits a request to the tax authority for reimbursement of VAT that has been paid or has not been fully deducted, provided that all statutory conditions are satisfied.

The implementation of VAT refunds helps reduce financial burdens on enterprises, enhance working capital, and promote investment, export activities, and other incentivized economic sectors, while ensuring fairness in taxation and preventing overpayment.

2. Conditions for VAT refund eligibility

Pursuant to Clause 9 Article 15 of the Law on Value-Added Tax 2024 and Article 37 of Decree No. 181/2025/ND-CP, the conditions for VAT refund eligibility are as follows:

A business establishment eligible for a VAT refund must apply the deduction method for VAT calculation, maintain accounting books and supporting documents in accordance with accounting laws, and possess a bank account registered under its tax identification number;
The establishment must satisfy the conditions for input VAT deduction and must not fall under cases where input VAT deduction is disallowed, including invoices and documents arising from prohibited acts that render VAT non-deduction;
The seller must have declared and paid VAT in accordance with regulations for invoices issued to the business establishment requesting the refund, determined as follows:
At the time the refund application is submitted, the seller must have filed VAT returns in compliance with regulations and must not have any outstanding VAT liabilities for the tax period corresponding to the refund period of the applicant;
The tax authority, at the time of receipt of the refund application, shall rely on the results generated by the automated information technology system to determine whether the seller has duly declared and paid VAT;
Where the seller is determined to have failed to submit complete VAT returns for the relevant tax period (including cases where the filing deadline has not yet expired) or still owes VAT for such period, the business establishment shall not be entitled to a refund in respect of invoices corresponding to such tax periods.

3. Procedures for VAT refund

Pursuant to Chapter V of Circular No. 80/2021/TT-BTC, VAT refund procedures shall be implemented as follows:

- Step 1: Preparation of VAT refund dossier

For enterprises eligible for VAT refunds, the refund dossier includes:

Application for VAT refund (Form No. 01/HT);
Other documents as required for specific cases as stated in Section 3.

- Step 2: Submission of VAT refund dossier to tax authority

The enterprise shall submit the VAT refund dossier to the competent tax authority via one of the following methods:

Direct submission to the tax authority;
Submission via postal services;
Electronic submission through the tax authority’s e-portal.

- Step 3: Receipt and processing of dossier by tax authority

Within three (03) working days from receipt of the refund dossier, the tax authority shall classify and notify the taxpayer of one of the following outcomes:

Accepted dossier: The tax authority shall notify the taxpayer of the timeline for processing the refund;
Rejected dossier: The tax authority shall issue a written request for explanation or supplementation of information. The time taken for such explanation or supplementation shall not be included in the statutory processing period.

- Step 4: Receipt of VAT refund

The taxpayer shall receive the refunded amount in accordance with the notification of the tax authority. The refund timelines are as follows:

No later than six (06) working days: For cases subject to refund prior to inspection;
No later than forty (40) working days: For cases subject to inspection prior to refund.

III. Questions on VAT refund procedures

1. What should enterprises note when submitting VAT refund applications via the electronic portal to avoid rejection?

When submitting refund dossiers via the General Department of Taxation’s e-portal, enterprises must ensure that their digital signatures remain valid, attached files comply with prescribed formats (PDF/XML), and declared data is consistent with accounting documents.

Common errors leading to rejection include incorrect bank account details, missing non-cash payment documents, or unclear scanned copies. Enterprises should thoroughly review dossiers prior to submission to avoid delays.

2. Can tax authorities request electronic accounting data during VAT refund procedures?

Pursuant to Clause 9 Article 15 of the Law on Value-Added Tax 2024 and Article 37 of Decree No. 181/2025/ND-CP, one of the conditions for VAT refund eligibility is that “business establishments applying the deduction method must maintain accounting books and documents in accordance with accounting laws.”

Accordingly, tax authorities are entitled to request taxpayers to provide accounting records, documents, invoices, and electronic data to verify the legality and validity of the refund dossier.

In cases where electronic invoices are used, data must be provided in standardized formats as prescribed.

3. How are errors in bank payment documents handled in VAT refund dossiers?

Where VAT refund dossiers contain bank payment documents with incorrect information, the handling is as follows:

For minor errors (e.g., missing transaction codes, typographical errors in entity names) that do not affect authenticity, enterprises may provide explanations along with confirmation from the bank;
For material errors (e.g., mismatched account numbers or beneficiary details), the tax authority shall reject such documents, and the enterprise must implement correction procedures with the bank and resubmit valid documents.

4. Can enterprises authorize tax service providers to implement VAT refund procedures?

Enterprises may authorize licensed tax service providers (e.g., tax agents or accounting consulting firms) to implement VAT refund procedures. However, enterprises remain ultimately responsible for the truthfulness and legality of the submitted dossiers.

5. If an enterprise applying for a VAT refund has outstanding tax liabilities, will they be offset before refund?

Pursuant to Article 60 of the Law on Tax Administration 2019, where a taxpayer has outstanding tax liabilities, the tax authority shall offset the refundable tax amount against such liabilities before refunding any remaining balance (if any). This provision ensures proper tax collection and mitigates prolonged tax arrears.

IV. Legal advisory services on vat refund procedures

Should you have any inquiries or require legal advice regarding VAT refund procedures, please contact NPLAW for the most effective consultation and support.