Removing obstacles for businesses but must preserve the budget in VAT refunds

Discussing in groups on December 8 about the draft Law amending and supplementing a number of articles of the Law on Value Added Tax (VAT), the majority of National Assembly deputies (NADs) agreed with the necessity of amending the Law to immediately remove bottlenecks in practice.

The Government shall clearly specify the conditions for deduction.

Agreeing with the amendment of the regulations on VAT refunds, National Assembly Deputy Nguyen Thi Thuy ( Thai Nguyen Delegation) explained that due to the current regulations, buyers are only refunded when the seller has declared and paid taxes, leading to the fact that when exporting, businesses are refunded input VAT, but are delayed because they have to wait to determine that the seller has declared and paid taxes. This causes difficulties and risks for businesses requesting tax refunds because businesses requesting tax refunds do not have legal or technical tools to check the seller's tax compliance status at the time of preparing tax refund dossiers.

Regarding the amendment and supplement to Clause 3a, Article 14 - input tax deduction for non-taxable goods and services, National Assembly Deputy Ma Thi Thuy (Tuyen Quang Delegation) said that this is the biggest amendment. Allowing the deduction of all input tax is theoretically positive, reducing capital costs for businesses.

However, the delegate noted that clarifying the boundary between “not taxable” and “not subject to tax” is currently very vague. Otherwise, it will lead to arbitrary interpretation, businesses can declare in the direction that maximizes their benefits, while tax authorities apply the opposite interpretation. This is the origin of a series of disputes about tax deductions and refunds over the years.

In addition, expanding input deductions may lead to increased tax refund pressure, creating additional fraud risks if there is no electronic checking mechanism and accompanying risk assessment. Therefore, the delegate proposed to add a provision assigning the Government to clearly stipulate the conditions for deductions, avoiding the case of businesses being "taxed" due to inconsistent application.

Regarding the abolition of Point c, Clause 9, Article 15, Deputy Ma Thi Thuy said that the abolition of some conditions on documents to simplify administrative procedures is in the right direction, but must go hand in hand with improving electronic monitoring capacity. "Otherwise, we will unintentionally create a "gap" for the act of legalizing invoices and naturally open the way for fraudulent tax deductions and refunds," the Deputy emphasized.

Delegate Nguyen Ngoc Son spoke in the discussion.

Regarding the proposal to abolish Point c, Clause 9, Article 15 of the current Law (a provision considered a bottleneck but also a barrier against fraud), National Assembly Deputy Nguyen Ngoc Son (Hai Phong City Delegation) expressed his concern and said that the Government's Report needs to clarify the quantitative basis: How many cases of delayed tax refunds are actually due to this provision, and how many cases are due to internal processes or risk classification?

Deputy Nguyen Ngoc Son suggested that the Government should have a specific quantitative report, predicting the level of risk of increased budget revenue loss when removing this regulation, and at the same time proving whether the alternative prevention mechanism is strong enough to help National Assembly deputies feel secure when pressing the approval button, ensuring both removing bottlenecks for businesses and protecting the safety of the state budget.

Speed up tax refunds for businesses with good compliance

Regarding VAT refund, Point c, Clause 9, Article 15 of the current Law stipulates: business establishments eligible for tax refund as prescribed in this Article must satisfy the condition that the seller has declared and paid VAT as prescribed for invoices issued to the business establishment requesting the tax refund.

National Assembly Delegate Sung A Lenh (Lao Cai Delegation) said that this is a qualitative bottleneck and a major practical shortcoming.

“In practice, exporters and buyers do not have the legal, technical, or time tools to check the seller's tax compliance, which puts them at risk of delays or tax refund rejections due to the fault of an independent entity. This also prolongs the tax refund period, stagnates capital, causes serious financial pressure, and directly affects the liquidity of the enterprise.”

Analyzing like that, Deputy Sung A Lenh expressed his agreement with the draft Law's abolishment of the provision at Point c, Clause 9, Article 15.

However, to ensure control of power and prevent fraud, Deputy Sung A Lenh suggested that it is necessary to implement synchronous solutions. Accordingly, consider building a public technical mechanism to help businesses look up the tax compliance status of the seller; speed up the automatic tax refund process for businesses with a good compliance history; direct the implementation of tax refunds within the prescribed time limit - this is the most basic problem causing capital stagnation.

Deputy Nguyen Van Chi (Nghe An Delegation) especially emphasized the content related to VAT refund conditions. According to the 2024 VAT Law, to be refunded, businesses must prove that the supplier has fully paid VAT on input invoices and the tax authority must check and determine that this tax has been paid to the budget. Along with the requirement for non-cash payments, this is a key condition to prevent tax refund fraud, ensure transparency and protect legitimate businesses.

Source: https://baophapluat.vn/go-vuong-cho-doanh-nghiep-nhung-phai-bao-toan-ngan-sach-trong-hoan-thue-vat.html