VCN - Reflecting problems related to VAT refund for goods belonging to foreigners and overseas Vietnamese who take them upon exit according to the provisions of Circular No. 72/2014 / TT-BTC, the General Department of Customs has officially responded to this issue
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In the case of a 9-year-old Australian child named on the declaration for VAT refund as the buyer of a watch worth VND 6 billion at the Customs Branch of Noi Bai international airport border gate, a representative of the General Department of Customs said: The child has a Vietnamese and an Australian passport. When he left Vietnam, he presented his Vietnamese passport, therefore, Customs Branch of Noi Bai international airport border gate, Hanoi Customs Department refused to refund VAT for this case because it is not subject to VAT refund under the provisions of Clause 1, Article 2 of the Circular 72/2014 / TT-BTC.
The representative added that currently the circular does not specify the age of the tax refund applicant. In order to prevent the case of taking advantage of VAT refund policies, the General Department of Customs will study and work with relevant units to propose competent authorities to amend and supplement policies and documents concerning VAT refund on goods for foreigners and overseas Vietnamese that take them upon exit in accordance with reality and international practice.
Mr. Hwang Gi Sun, left from Noi Bai to Thailand and took a watch which was liable for a tax refund however, when he returned to Vietnam on January 16, 2019, he brought the watch with him.
The representative said that upon exit, pursuant to Circular No. 72/2014 / TT-BTC, Mr. Hwang Gi Sun is the subject of a VAT refund, at the time of application for the refund if he has all valid documents and procedures for a VAT refund and the VAT was refunded by the Customs Branch of Noi Bai International Airport border gate in compliance with the law.
Based on Article 54 of the Customs Law and Point d, Clause 1, Article 6 of Decree No. 134/2016 / ND-CP, when Mr. Hwang entered the country with the watch that had VAT refunded he had items exceeding the import tax exemption rate prescribed at Point d, Clause 1, Article 6 of Decree No. 134/2016 / ND-CP therefore he must declare and pay import tax according to regulations.
The representative of the General Department of Customs noted, according to the regulations on scope of application in Article 1 of Circular No. 72/2014 / TT-BTC dated May 30, 2014 of the Ministry of Finance: "This Circular prescribes VAT refund on goods of foreigners and oversea Vietnamese in accordance with the provisions of Clause 7, Article 1 of the Law amending and supplementing a number of articles of VAT Law No. 31/2013 / ND-CP dated June 19, 2013 and Clause 8, Article 10 of Decree No. 209/2013 / ND-CP dated December 23, 2013 of the Government providing instructions on the implementation of articles of the Law on TAX through the border checkpoints in the international airports and seaports eligible for the State management of customs (hereinafter referred to as tax refund border checkpoints)
According to regulations on the subjects of application of VAT refund in Clause 1, Article 2 of Circular No. 72/2014 / TT-BTC dated May 30, 2014 of the Ministry of Finance: "Foreigners and overseas Vietnamese, except for members of flight crews under the regulations of the law on aviation, members of ship’s crews under the regulations of the law on maritime (hereinafter referred to as foreigners) whose passports or exit and entry permits issued by the foreign authorities are valid and used to enter or leave Vietnam, to buy goods in Vietnam and to bring goods out of Vietnam through the tax refund border checkpoints”.
Under the provisions of Clause 1, Article 5 of Circular No. 72/2014 / TT-BTC of May 30, 2014 of the Ministry of Finance on the rights and obligations of foreigners: "Receive refunds of VAT on goods complying with the regulations in Article 11 this Circular”.
According to Article 11 of Circular No. 72/2014 / TT-BTC dated May 30, 2014 of the Ministry of Finance, goods eligible for VAT refund must meet the following requirements:
"1. Goods that are not on the List of goods banned from export; List of import goods licensed by the Ministry of Commerce (which is now the Ministry of Trade and Industry) or List of import goods subject to line management prescribed in the Decree No. 187/2013/ND-CP dated November 20, 2013 of the Government and guiding documents of this Decree.
2. Goods subject to VAT prescribed in Article 3 of the Law on VAT No. 13/2008/QH12 dated June 03, 2008 and the guiding documents on the implementation.
3. Goods that can be carried on airplanes prescribed in Article 12 of the Law on civil aviation of Vietnam dated June 29, 2006 and the guiding documents on the implementation.
4. Goods other than VAT-free goods foreigners according to the regulations on the Circular No. 08/2003/TT-BTC dated January 15, 2013 of the Ministry of Finance giving instructions on the VAT refund with regard to the diplomatic missions, consular offices and the representative agencies of the international organizations in Vietnam.
5. Goods that are bought in Vietnam for which the VAT invoices are issued within 60 (sixty) days prior to the date the foreigner leaves Vietnam.
6. Goods bought from a single shop in one day whose value written on the VAT invoices (including the total payment of several invoices of goods bought from a single shop in one day) is at least VND 02 (two) million.
According to duty free allowances for luggage of travellers in point d Clause 1 of Article 6 of Governmment’s Decree 134/2016/ND-CP dated September 1, 2016:
“1. Each time a person immigrates under a passport or a passport substitute (except for laissez-passers) issued by a Vietnamese authority or foreign authority, he/she shall be granted duty-free allowance for his/her luggage, whether it is accompanied luggage or sent before or after his/her arrival:
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d) Other items other than those mentioned in Point a b and c of this clause (not on the List of goods banned from import, suspended from import or subject to conditional import) whose total customs value does not exceed VND 10,000,000;
Where the aforementioned allowance is exceeded, travellers may decide which items are within the allowance and which are not.
By Thu Trang/ Huyen Trang