VAT Refund 2025: New Case Added, What Businesses Need to Know From July 1, 2025

Effective July 1, 2025, the 2024 Law on Value-Added Tax (VAT) comes into force, bringing good news for many businesses and business households. Most notably, an additional case for VAT refund has been introduced, creating more favorable conditions for business establishments with specific tax rates.

Key Highlight: New VAT Refund Case For Businesses Subject to the 5% Tax Rate

According to Article 15 of the 2024 Law on VAT, from July 1, 2025, the following new case will be eligible for a tax refund:

Business establishments that exclusively produce goods or provide services subject to a 5% VAT rate are entitled to a VAT refund if their uncredited input VAT amount is VND 300 million or more after 12 consecutive months or 4 consecutive quarters.

• Note: In cases where a business establishment produces/provides goods and services subject to multiple tax rates, the refund will be carried out according to the allocation ratio stipulated by the Government.

Application Conditions

To be eligible for a refund in this case, a business establishment must meet the following conditions:

• Be a business establishment paying VAT under the credit method.
• Maintain and store accounting books and records in accordance with regulations.
• Have a bank account registered under the business’s tax identification number.
• Comply with regulations on input VAT credit.
• The seller must have declared and fully paid VAT for the invoices included in the refund claim.

Summary Of 8 Cases Eligible For VAT Refund From July 1, 2025

Pursuant to Article 15 of the 2024 Law on VAT, eligible cases for VAT refund include:

1. Refund for exported goods and services

• A business establishment with exported goods or services within a month/quarter is entitled to a monthly/quarterly refund if its uncredited input VAT amount is VND 300 million or more.
• If the business has both exported and domestic sales, it must separately account for the input VAT. After offsetting against the payable VAT on domestic goods, if the remaining input VAT for exports is VND 300 million or more, a refund is granted.
• Note: The refunded amount shall not exceed 10% of the revenue from exported goods and services for the refund period.

2. Refund for investment projects

• A business establishment in the investment phase (new or expansion projects) is eligible for a refund if the project’s uncredited input VAT amount is VND 300 million or more after being offset against the payable VAT from its ongoing business activities (if any).
• Refunds are not granted for investment projects that have not contributed sufficient charter capital, operate in conditional business lines without meeting the conditions, or are projects for exploiting natural resources or minerals (except for oil and gas exploration and development projects).

3. Refund for business establishments subject to the 5% tax rate (New regulation)

• As stated above, a business that exclusively produces/provides goods and services subject to the 5% rate is eligible for a refund if its uncredited input VAT is VND 300 million or more after 12 months or 4 quarters.

4. Refund upon dissolution, bankruptcy, or conversion

• A business paying VAT under the credit method is entitled to a refund upon dissolution or bankruptcy if it has overpaid VAT or has uncredited input VAT.
• A cooperative group that converts into a cooperative can inherit the uncredited or overpaid VAT for future credit or refund.

5. Refund for foreigners and overseas Vietnamese

• Entitled to a refund for goods purchased in Vietnam and carried upon departure.

6. Refund for projects using ODA and aid

• Refund of VAT paid on goods and services purchased in Vietnam to serve programs and projects using non-refundable ODA, non-refundable aid, or humanitarian aid.

7. Refund for subjects enjoying diplomatic privileges and immunities

• Entitled to a refund of the VAT paid on goods and services purchased in Vietnam for their use.

8. Other cases

• Business establishments that have a tax refund decision from a competent authority.
• Refunds under international treaties to which Vietnam is a signatory.

Important Note: General Conditions For VAT Refund

To be eligible for a VAT refund (applicable to cases 1, 2, 3, and 4), business establishments must meet the following general conditions:

• Tax payment method: Must be a business establishment paying VAT under the tax credit method.
• Books and records: Must prepare and maintain accounting books and documents in accordance with the law.
• Bank account: Must have a bank account registered under the business establishment’s tax code.
• Credit conditions: Must meet all regulations on input VAT credit.
• Seller’s confirmation: The seller must have declared and paid VAT as required for the invoices for which the business establishment is claiming a refund.

A thorough understanding of these regulations will help businesses and business households to proactively prepare documents, comply with the law, and ensure they receive their full VAT refund entitlements from July 1, 2025.