PILOT VAT REFUND SCHEME HAS BEEN INTRODUCED TO FOREIGN PASSPORT HOLDERS FOR THE FIRST TIME STARTING FROM JULY 1, 2012
On January 19, 2012, the Prime Minister issued Decision 05/2012/QD-TTg on introduction of a pilot VAT refund scheme to foreign passport holders departing from Tan Son Nhat Airport in HCMC and Noi Bai Airport in Hanoi (excluding operating air crews flying out of Vietnam). Like the Tourist Refund Scheme for Goods and Services Tax (GST) in Singapore and many other countries, from July 1, 2012 to June 30, 2014, this scheme entitles these persons to claim refund on VAT paid for their goods purchased from retailers participating in the scheme if they meet the eligibility criteria and conditions.
The scheme is available for the goods that satisfy all of the following conditions:
(i) They must be subject to VAT, brand-new and permitted to be carried onboard;
(ii) They must not be those the export of which is restricted or prohibited;
(iii) They must be issued with a VAT invoice cum tax refund declaration (in a standard form issued by the Ministry of Finance) within 30 days before departure; and
(iv) They have a minimum value of VND2 million (equivalent to US$100) as shown on the VAT invoice purchased at a retailer participating the scheme within one day (including an aggregate value of multiple invoices purchased in the same retailer within the same day). An enterprise established and operating in accordance with the laws of Vietnam, who trades eligible goods and has business locations in HCMC, Hanoi, or in the center of handicraft villages in the destinations of the travel routes can be chosen by the Ministry of Finance to act as a retailer participating the scheme.
Process of obtaining a VAT refund
When shopping at retailers participating in the scheme, foreign passport holders will be issued with a VAT invoice cum tax refund declaration at the point of purchase after presenting their passports.
Before refund claims can be processed, foreign passport holders will have to seek an endorsement on the VAT invoice cum tax refund declaration by a customs office located near the check-in area at the airport presenting to the customs office the goods, together with the original passport and VAT invoice cum tax refund declaration in person.
Finally, the counter of a bank authorized to provide refund servic
s shall be responsible for refunding VAT amount to foreign passport holders upon their presentation of the original passport, boarding pass and the VAT invoice cum tax refund declaration endorsed by the competent customs office.
Calculation and method of VAT refund
The refunded amount is the balance between the amount of VAT charged on goods (as shown on the VAT invoice cum tax refund declaration endorsed by the competent customs office) and the administrative fee of not more than 15% of the total refunded amount, which will be collected by the bank providing the refund services. VAT refund will be made in Vietnamese dong or, if requested, in foreign currency using exchange rate of the bank providing the refund services.
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