OFFICIAL LETTER

ON PROBLEMS ARISING IN VALUE ADDED TAX (VAT) REFUND

To: Provincial/municipal Tax Departments

The General Department of Taxation has recently received opinions of some localities on problems in the VAT refund policy. Concerning this issue, the General Department of Taxation gives the following opinion:

According to the tax management process applicable to enterprises, issued under the Decision No. 1209 TCT/TCCB of July 29, 2004 of the General Director of Taxation: Payers of export tax on exported goods transported across the land border are subject to the audit-refund process.

In cases where enterprises regularly submit dossiers for tax refund in connection to exports lots in the year and such enterprises have well applied the accounting regime, the regime on invoices and vouchers as well as tax policies, have been refunded tax for several times, and the pre-tax refund inspection shows that they have not committed fraudulent acts and a long pre-tax refund inspection conducted by provincial/municipal Tax Departments will affect their production or business activities, provincial/municipal Tax Departments may consider and allow enterprises to get tax refunded before being inspected on a case-by-case basis. At the same time, provincial/municipal Tax Departments shall conduct inspection quarterly, biannually or upon annual tax settlement. Particularly for exported natural resources or crude minerals, provincial/municipal Tax Departments shall have to contact managing agencies of the exporting enterprises in order to check whether or not the exportation complies with prescribed regimes while requesting such enterprises to make written commitments to bear responsibility for their exportation.

The General Department of Taxation notifies provincial/municipal Tax Departments as instruction for compliance. Any problems arising in the course of implementation should be reported to the General Department of Taxation for consideration and guidance.

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Nguyen Thi Cuc