VAT refunds are among the procedures foreign-invested enterprises (FIEs) in Vietnam care about most, especially export manufacturers. For these companies, input VAT is usually far higher than output VAT, and any amount that cannot be refunded sits idle on the balance sheet as tied-up cash.
Since 1 July 2025, VAT refund cases have been governed by Article 15 of the VAT Law No. 48/2024/QH15 and Section 3, Chapter III of Decree No. 181/2025/ND-CP (Articles 29 to 37). From 1 January 2026, several conditions were further amended by Law No. 149/2025/QH15 and Decree No. 359/2025/ND-CP. This article covers every VAT refund case, then looks in depth at the one FIEs use most: VAT refunds for exported goods.
Key points at a glance
| Refund case | Main threshold / condition | Legal basis |
|---|---|---|
| 1. Exported goods and services | Undeducted input VAT of VND 300 million or more; refund capped at 10% of export revenue for the refund period | Article 15.1, Law 48/2024; Article 29, Decree 181/2025 |
| 2. Investment projects | Project input VAT remaining after offset of VND 300 million or more; charter capital fully contributed | Article 15.2; Article 30, Decree 181 |
| 3. Businesses producing only 5%-rate goods/services | Undeducted input VAT of VND 300 million or more after 12 consecutive months or 4 consecutive quarters | Article 31, Decree 181 |
| 4. Dissolution or bankruptcy | Overpaid VAT or undeducted input VAT | Article 32, Decree 181 |
| 5. Foreigners taking goods out of Vietnam on departure | Refund at the border gate | Article 33, Decree 181 |
| 6. Non-refundable ODA and aid projects | VAT paid on goods and services bought in Vietnam | Article 34, Decree 181 |
| 7. Holders of diplomatic privileges and immunities | VAT shown on invoices for purchases in Vietnam | Article 35, Decree 181 |
| 8. Decisions of competent authorities; international treaties | As per the decision or treaty | Article 36, Decree 181 |
For FIEs, the most common cases are exports, investment projects (building a factory, importing machinery) and dissolution. Export refunds are the ones filed most often.
1. General conditions for a VAT refund
Under Article 37 of Decree 181/2025/ND-CP, businesses claiming refunds for exports, investment projects, 5%-rate production or dissolution must all:
- Pay VAT under the credit (deduction) method.
- Keep accounting books and records in line with accounting law.
- Hold a bank account registered under the company’s tax code.
- Meet the input VAT deduction conditions: valid invoices, non-cash payment for purchases of VND 5 million or more, and for exports, also a contract and a customs declaration.
Key change from 1 January 2026: the condition that “the seller has declared and paid VAT on the invoices issued to the refund claimant” (Article 15.9(c) of Law 48/2024 and Article 37.3 of Decree 181) has been abolished by Law 149/2025/QH15 and Decree 359/2025/ND-CP. Previously, this condition caused many refund claims to be partly rejected because suppliers filed late or owed tax. Supplier due diligence still matters, since illegitimate invoices remain excluded from deductible and refundable VAT.
2. VAT refund cases
2.1. Exported goods and services
A business with exports in a month or quarter that has undeducted input VAT of VND 300 million or more may claim a monthly or quarterly refund. This case is covered in detail in section 3.
2.2. Investment projects
A business paying VAT under the credit method with a new or expansion investment project (including projects in phases or components) in the investment stage offsets the project’s input VAT against VAT payable on its existing operations, if any. If the project’s remaining input VAT after offset is VND 300 million or more, it can be refunded.
Points for FIEs:
- Charter capital not fully contributed as registered at the time of filing: no refund; the amount is carried forward only. This is a common reason newly established FIEs are refused project refunds.
- Projects in conditional business lines that do not yet meet the conditions (no licence where one is required): no refund.
- Natural resource and mineral extraction projects, and projects producing goods from extracted resources under Article 4.14 of Decree 181: no refund.
- Projects that do not create fixed assets of the business are outside the project refund case.
- For completed projects not yet claimed, file within one year of completion of the project, phase or component.
- Projects terminated before operation, with no taxable output yet, must repay VAT already refunded.
2.3. Businesses producing only 5%-rate goods or services
New under Law 48/2024. A business that only produces goods or provides services taxed at 5% (for example certain agricultural products, medical equipment and fertilisers on the list) and has undeducted input VAT of VND 300 million or more after 12 consecutive months or 4 consecutive quarters may claim a refund. Businesses with several VAT rates must account separately for input VAT used for 5%-rate output, or allocate by revenue ratio.
2.4. Dissolution and bankruptcy
Credit-method businesses that are dissolved or go bankrupt with overpaid VAT or undeducted input VAT may claim a refund. Exception: if the business dissolves while its investment project has not yet started operations, the repayment rule in section 2.2 applies. When a branch is dissolved, the head office inherits the overpaid or undeducted VAT for deduction or refund.
2.5. Other cases
- Foreigners and overseas Vietnamese buying goods in Vietnam to take out on departure (excluding air and ship crew).
- Non-refundable ODA, grant aid and humanitarian aid projects: project owners, main contractors and donor-designated organisations may reclaim VAT paid on goods and services purchased in Vietnam.
- Holders of diplomatic privileges and immunities.
- Decisions of competent authorities and international treaties to which Vietnam is a party.
3. In depth: VAT refunds for exported goods
Exported goods are subject to 0% VAT. The exporter collects no output VAT but still pays 8% or 10% VAT on domestic materials and services. Export-oriented FIEs therefore almost always carry undeducted input VAT, and the refund is how they recover that cash.
3.1. Who claims the refund?
The business that exports the goods or services. In special cases, Article 29 of Decree 181 identifies the claimant as follows:
| Case | Refund claimant |
|---|---|
| Entrusted export | The owner of the goods (the entrusting party), not the export agent |
| Transfer processing | The business that signed the export processing contract with the foreign party |
| Goods exported for overseas construction works | The business exporting the goods for the works |
3.2. Excluded: goods imported and then exported to another country
Law 48/2024 excludes from export refunds goods imported and then exported to another country, meaning goods the business imports into Vietnam and then exports directly or through an agent (pure trading).
The key point for manufacturing FIEs: Decree 181 clarifies that this exclusion does not cover raw materials imported to produce or process export goods. A company that imports materials, manufactures finished products and exports them is still entitled to refunds. Companies combining manufacturing with trading (import and re-export) should separate the input VAT of the trading activity.
3.3. Calculating the refundable amount
Under Article 15.1 of Law 48/2024, Article 29 of Decree 181 and Article 7 of Circular 69/2025/TT-BTC, the calculation runs as follows:
- Determine the refund period: from the first tax period with continuously unrefunded undeducted input VAT up to the period in which the refund is claimed.
- Determine export-related input VAT: account for it separately where possible. Otherwise allocate using the ratio export revenue / total taxable revenue of the refund period.
- Offset against VAT payable on domestic sales, if any.
- Apply the VND 300 million threshold: only a remaining balance of VND 300 million or more can be refunded. Below that, it is carried forward.
- Apply the 10% cap: the refund cannot exceed 10% of export revenue for the refund period. The excess is carried forward to the next refund period.
3.4. Worked example
Company A (100% Korean-owned) manufactures electronic components and files VAT monthly. For the refund period July–September 2026:
- Export revenue: VND 20 billion. Domestic revenue: VND 5 billion (10% rate, output VAT VND 500 million).
- Total input VAT that cannot be accounted for separately: VND 3 billion.
| Step | Calculation | Result |
|---|---|---|
| Export ratio | 20 / (20 + 5) | 80% |
| Export-related input VAT | VND 3 billion × 80% | VND 2.4 billion |
| Offset against domestic VAT payable | Domestic output VAT 500 million − domestic input VAT 600 million = nothing payable | No further offset |
| VND 300 million threshold | 2.4 billion ≥ 300 million | Eligible |
| 10% cap on export revenue | VND 20 billion × 10% | VND 2 billion |
| Refundable amount | Min (2.4 billion; 2 billion) | VND 2 billion |
| Carried forward | 2.4 billion − 2 billion | VND 400 million |
This example is simplified. The exact offset between domestic and export activities, and treatment of any excess domestic input VAT, should follow Article 7 of Circular 69/2025/TT-BTC and the current refund forms.
3.5. Export documentation
To deduct and reclaim input VAT on exports, the business needs:
- Contracts for sale or processing of goods, and an entrustment contract where applicable.
- Customs declarations for exports that have been cleared. Goods must be exported through a customs-controlled area.
- Non-cash payment evidence: export proceeds must be received through a bank. Netting, third-party payments and debt offsets must follow permitted forms and be supported by written agreements.
- Invoices for the exported goods and services.
Where payment has not yet been received at the time of filing (deferred payment terms), the business may still declare the export but must track and provide payment evidence when payment falls due under the contract. If no payment evidence exists by then, the related input VAT must be reversed. See also: Bank payment requirements for export VAT deduction and refunds.
3.6. Common situations for FIEs
Export processing enterprises (EPEs): purchases by an EPE from domestic suppliers are usually taxed at 0% (the supplier treats them as exports into a non-tariff zone), so EPEs rarely accumulate large input VAT to reclaim. Conversely, domestic suppliers selling to EPEs, often FIEs themselves, are the ones with input VAT to reclaim, provided they hold complete documentation for exports into the non-tariff zone.
On-the-spot exports: goods delivered to a company in Vietnam as designated by a foreign trader. This model is very common in FDI supply chains and has specific customs and payment requirements, so each case should be reviewed carefully. See: VAT refunds for goods imported via local intermediaries and on-the-spot exports.
Timing of export revenue: export revenue drives both the allocation ratio and the 10% cap, so it must be recognised in the correct period. Errors in timing can change the refundable amount. See: Export revenue timing for VAT and CIT.
Mixed export and domestic sales: set up separate input VAT tracking by product line or order from the start. Revenue-ratio allocation is often unfavourable when domestic revenue is high but low-margin.
4. Procedure and processing time
The business files the refund claim electronically through the tax authority’s portal after filing the VAT return for the period. The tax authority classifies the claim as either:
- Refund first, audit later: short processing time (no later than six working days from the tax authority’s notice of receipt, under the 2025 Tax Administration Law and Decree 252/2026/ND-CP, applicable from 1 July 2026).
- Audit before refund: the tax authority inspects at the company’s premises before deciding (from 1 July 2026, the refund decision is due within ten working days after the authority issues its audit conclusion; the 2019 Tax Administration Law previously allowed 40 days). First-time claims, high-risk taxpayers and companies with prior tax or customs violations usually fall into this category.
Processing times and procedures should be checked against the tax administration rules in force at the time of filing.
5. Common reasons export refund claims are rejected
- Export proceeds not received through a bank, or paid by a party other than the buyer without a valid agreement.
- Input invoices from suppliers that have disappeared, do not operate at their registered address, or issued invalid invoices.
- Input VAT of pure trading (import then re-export) mixed into the input VAT of manufactured exports.
- Incorrect allocation ratios, or export revenue recorded in the wrong period.
- Input VAT unrelated to exports (staff welfare costs, assets used for non-taxable activities, etc.).
- Customs declarations not matching invoices and books, or unreasonable material consumption norms.
6. Pre-filing checklist for export refunds
- VAT return for the refund period filed, with undeducted VAT of VND 300 million or more.
- Charter capital fully contributed (for investment project claims).
- List of export customs declarations cleared during the refund period.
- List of bank payment evidence for exports.
- Input VAT allocation worksheet (if not separately tracked) and 10% cap calculation.
- Supplier review: tax code status and invoice validity.
- Input VAT on import-then-export trading separated (not refundable).
- Export revenue reconciled across invoices, customs declarations and books.
- Material norm explanations ready, if the claim is audited first.
TrustlineAX helps FIEs review eligibility, prepare export and investment-project VAT refund claims, and support them through tax audits. See our VAT refund service or contact TrustlineAX for advice.
Disclaimer
This article is based on:
- VAT Law No. 48/2024/QH15 (Articles 14 and 15), as amended by Law No. 149/2025/QH15 from 1 January 2026;
- Decree No. 181/2025/ND-CP (Section 3, Chapter III, Articles 29–37), as amended by Decree No. 359/2025/ND-CP;
- Circular No. 69/2025/TT-BTC (Articles 7 and 8) on determining refundable VAT;
- The Tax Administration Law and guidance on refund procedures.
Scope notes:
- Refund claims filed before 1 January 2026 without a refund decision may be subject to separate transitional rules.
- The example is simplified for illustration. Actual figures must follow current forms and guidance.
- VAT refunds for EPEs, on-the-spot exports and processing involve many specific situations and should be reviewed case by case.
This article is for reference only. It does not replace the original legal texts and does not constitute advice for any specific case. Please check the rules in force at the time of application and consult a professional adviser before making decisions.
TrustlineAX — Tax, accounting and compliance advisory for foreign-invested enterprises in Vietnam.