Guidelines For Determining Operating And Test-Run Costs During The Investment Stage For Vat Refund Under The Latest Regulations

On September 4, 2025, the Tax Department issued Official Letter No. 3577/CT-CS in response to the Quang Ninh Tax Department regarding value-added tax (VAT) refunds for investment projects.

Accordingly, if an enterprise is in the investment stage and incurs costs for operating or test runs, these activities are still considered part of the investment stage provided they are mandatory steps under relevant technical regulations. In such cases, input VAT incurred during this period can be refunded in accordance with current regulations.

👉 Legal Basis
The official letter is based on the following legal documents:

• Law No. 106/2016/QH13 amending and supplementing the Law on VAT;
• Decree No. 209/2013/NĐ-CP and its amendments (No. 100/2016, No. 49/2022);
• Circular No. 130/2016/TT-BTC and Circular No. 13/2023/TT-BTC issued by the Ministry of Finance;
• Decree No. 15/2021/NĐ-CP (as amended by Decree No. 35/2023/NĐ-CP) on project management for construction investment

These documents specify the conditions, sequence, and procedures for VAT refund applicable to new investment projects.

👉 Tax Authority’s Guidance
According to the official letter:

“For enterprises with new investment projects that are still in the investment stage and have test-run or operation activities, if the test run is a required technical step under specialized laws and is conducted in accordance with contractual agreements, then such operation or test run shall be considered part of the investment implementation stage.”

In other words, if the test run is a mandatory step for project acceptance, it remains within the investment stage and the corresponding costs are considered legitimate investment expenses eligible for input VAT refund.

👉 Practical Significance for Enterprises
This clarification helps enterprises clearly distinguish between investment and operational costs, especially for projects with extended testing phases, such as:

• Industrial production, energy, and logistics projects, or those involving imported equipment lines;
• Projects requiring technical inspection or pilot operation before official acceptance.

Properly identifying the “investment stage” ensures eligible VAT input credits and refunds, easing financial pressure and enhancing tax transparency.

👉 Notes for Enterprises

• If the test run is not included in technical documents or contracts, the tax authority may reject the VAT refund for such costs.
• Maintain consistent documentation across contracts, acceptance records, and VAT invoices.
• Consult the local tax authority or a professional tax advisor to confirm the refund scope.

✅ Conclusion
Official Letter No. 3577/CT-CS dated September 4, 2025, provides important clarification on determining operation and test-run costs during the investment stage.
If test runs are mandatory technical steps, enterprises are deemed to remain in the investment phase and may claim input VAT refunds accordingly.

Enterprises should review their contracts and technical documents to ensure VAT refund dossiers are accurate, timely, and compliant with the law.