Proposal to expand the scope of VAT refund for foreigners

16:41 | 29/04/2014 Economy

(VEN) - The Ministry of Finance is drafting a circular guiding the implementation of value added tax (VAT) refunds on goods purchased by foreigners on their exit from Vietnam. The Ministry of Finance will expand the scope of application of the VAT tax refund for foreigners at international ports and airports.

In addition to application of VAT tax refund for goods purchased by foreigners and overseas Vietnamese to carry with on their exit from Vietnam through the Noi Bai and Tan Son Nhat international airports, the Ministry of Finance also proposed this application at regulations are applied at Da Nang and Cam Ranh international airports and international seaports under the Finance Ministerial Decision.

According to the draft, VAT refunded goods must meet the following provisions:

- Goods not on the lists of goods banned from export; goods exported under license from the Ministry of Industry and Trade or subject to specialized management in compliance with the provisions of Decree 187/2013/ND-CP dated November 20, 2013 of the Government and related guidelines;

- Goods subject to VAT as provided for in Article 3 of the Law on Value Added Tax 13/2008/QH12 dated June 3, 2008 and related guidelines;

- Goods not on the list of commodity not to be brought onto aircraft specified in Article 12 of the Law on Civil Aviation of Vietnam dated June 29, 2006 and related guidelines;

- Goods purchased in Vietnam with VAT invoices shall be made within 60 days from the date foreigners exit from Vietnam. The value of invoiced goods for purchase at one store in one day (including invoices aggregating multiple purchases in the same day at the same store) must be at least VND2 million.

Tax refund service fees and refunded amounts are proposed by the Ministry of Finance as follows: commercial banks are entitled to 15 percent of total amount of VAT refund on the volume of eligible goods carried by foreigners on their exit from Vietnam as tax refund service fees. The VAT refunds to foreigners will then account for 85 percent.

The draft stated that the VAT refund is made in Vietnamese dong. Where foreigners require having their VAT refunds refund in Vietnamese dong transferred into freely convertible foreign currencies, commercial banks will perform these exchanges in accordance with the law and the exchange rates are listed by commercial banks at the time of conversion and in accordance with the regulations of the State Bank of Vietnam.

Previously, to implement the Prime Ministerial Decision 05/2012/QD-TTg, the Ministry of Finance already issued Circular 58/2012/TT-BTC on pilot application of VAT refunds for goods purchased by foreigners in Vietnam and brought on their exit from Vietnam through the Noi Bai and Tan Son Nhat international airports./.