VAT refund still unreachable to many foreigners

The number of VAT refund cases remains small one month implementing the pilot program that will run until June 30, 2014, said the customs agency.

The programme regulates that foreigners will be reimbursed 85 percent of VAT that had been taxed from goods they purchased and are carrying with them on leaving the immigration gate.

The customs agency said it may be due to the lack of information presented in Vietnamese about the list of accredited businesses that are licensed to join the program and explanations on necessary paperwork for the customers, let alone the manual method deployed in the reimbursement procedure stage.

It’s known that there are presently 30 companies that registered sales, mostly of imported fashion items such as clothes, bags and shoes.

Earlier, under Decision No. 1214/QD-TCHQ issued by the General Customs Department, as of July 1 foreigners who leave the country through the two major airports, Tan Son Nhat in HCMC and Noi Bai in Hanoi, were eligible to be reimbursed 85 per cent of VAT that had been taxed from goods they purchased, while the remaining 15 per cent denotes bank fees.

This fulfills a decree issued by the Ministry of Finance in April stipulating that, in order to qualify for the 10 per cent VAT refund, foreigners must present receipts worth at least VND2 million ($100) a piece.

Also, according to the Ministry of Finance, foreigners and overseas Vietnamese are both eligible for VAT refunds on purchases in local accredited stores with the “VAT Refund for Tourist” logo.

Nevertheless, those who are working for airlines are excluded from the refund scheme.

Furthermore, the duration of stay by foreigners eligible to claim the refund is unclear.

Most ASEAN countries allow tourists to reclaim the VAT paid on goods.