The General Department of Taxation issued Official Letter 373 / TCT - KK on February 6, 2017 in order to clarify the refund condition concerning companies with purchase VAT exceeding sales VAT for 12 consecutive months before July 2016.
Prior to June 2016, if purchase VAT exceeded sales VAT for 12 consecutive
months, refund was allowed for that balance. However, from July 1, 2016,
under the law 106/2016 / QH 13, this condition was eliminated and it became
outside application for refund. On the other hand, the handling of the
purchase VAT balance had at the end of June 2016 was unclear.
According to this official letter VAT refund will be handled as below.
1. VAT for the taxation period up to June 2016 should apply for a refund
corresponding to that period.
2. In the subsequent period, it is not possible to offset the purchase
VAT with the payment amount.
3. The tax authorities need to conduct inspections before refunding for
refund applications that are deemed to have high risk.