Tax refunds made simple for firms

The process will be even shorter for cases involving official development assistance funds.
Under the old rules, the deadline was 30 days for standard returns and 60 days for complex cases.
However, it was not uncommon for businesses to wait more than one year to simply hear if their application had been successful. Companies were also often penalised for late applications, even when laborious bureaucracy was the cause.
“Decision 1209 outlines an overhaul of the management of the tax collection process,” the head of the General Department of Taxation, Nguyen Van Ninh, said, “and it has been sent to all provincial tax departments.”
The decision says enterprises will be informed if they qualify for a tax refund within five working days of the provincial tax departments receiving their application and relevant documents.
The documents will then be submitted for approval of the leaders of provincial tax departments.
After the tax refund application arrives, it should now take no more than two days to process while analysis, calculation and categorisation of the tax refund dossiers will take no more than 10 working days.
The decision says that for organisations using official development assistance capital, the time for analysis should not exceed two days. “So from now on, tax refunds claimed by enterprises will be settled within 15 days,” Ninh said.
The cumbersome tax refund system, the cause of innumerable delays and confusion, was the first item on the agenda at a recent meeting between the Ministry of Finance and enterprises.
Several companies told the meeting tax refunds had taken a year or more, a delay that cut into their business development capital, particularly for small and medium-sized companies.
Also, if enterprises delayed tax payments, they were punished, but no disciplinary action was taken against tax or customs officials who held up the process.
Deputy Finance Minister Truong Chi Trung said the regulations on settling company tax refunds would even take account of interest rates payments made by companies waiting for news of their refund.
Provincial tax departments would pay for these interest rate charges.
Vu Duy Thai, general secretary of the Hanoi Association of Industry and Commerce (HAIC) said companies applauded the move by the finance ministry, but tax agencies need to recruit and train more frontline staff.
“Tax agencies at grassroots levels should be aware of how to simplify administrative procedures to help enterprises,” he said.
The HAIC had submitted proposals on behalf of companies to the Ministry of Finance and the General Department of Customs, saying delayed tax refunds were a serious issue.