The General Department of Taxation has just issued Dispatch No. 661/TCT-TTKT to the Ho Chi Minh City Tax Department regarding the handling of value-added tax refunds for members of the Vietnam Cassava Association.
TAX AGENCY “DRAGGING” ON CASES
At the end of January 2024, the Vietnam Cassava Association sent a letter to the General Department of Taxation requesting the handling of value-added tax refunds for its members, including Fococev Vietnam Joint Stock Company, in accordance with the directions of the Prime Minister and the Ministry of Finance.
“So far, the refund application documents according to Section 1 of the Ho Chi Minh City Tax Department have been checked and meet the conditions for tax refunds, but the Ho Chi Minh City Tax Department has not yet processed the tax refunds for Fococev Company,” said Nghiem Minh Tien, Chairman of the Vietnam Cassava Association.
Fococev Vietnam specializes in the production and trading of cassava starch with annual revenue of over VND 3 trillion, annual output of over 320,000 tons, and more than 1,800 employees working throughout the system. Currently, the Fococev system includes multiple factories located throughout the country: Son La, Quang Binh, Quang Tri, Quang Nam, Kon Tum, Gia Lai, Phu Yen, Ninh Thuan, Binh Phuoc.
Regarding the obstacles in claiming value-added tax refunds, Nguyen Xuan Son Hai, General Director of Fococev Vietnam Joint Stock Company, stated that the company has submitted 29 refund applications for value-added tax from June 2020 to February 2023, with a total refund amount of VND 355 billion.
According to the process, on July 28, 2023, the Ho Chi Minh City Tax Department accepted the documents. Then, on August 18, 2023, the tax department issued inspection decision No. 1149/QD-CT-KT, and on September 5, 2023, announced the inspection decision and began the inspection.
“According to the confirmation minutes of the random inspection on October 27, 2023, with 1 member of the inspection team concluding that through the random inspection of 2 sets of export documents, the tax inspector recognized the tax refund documents meet the conditions for applying a 0% tax rate for exported goods in accordance with the tax law,” Fococev Company’s leader stated.
Although the inspection has been completed, the inspection team has not issued the inspection report, and the Ho Chi Minh City Tax Department has not processed the tax refunds for Fococev Company.
Subsequently, on December 8, 2023, Fococev Company submitted 2 refund applications for the tax filing periods of May 2023 and September 2023, with a total refund amount of VND 11 billion.
The Ho Chi Minh City Tax Department has issued a notification accepting the refund applications and categorizing them as “pre-refund” files; “… Time for resolving refund results: 06 working days from the date the tax authority accepts the taxpayer’s documents.”
“After the deadline for resolving the refund results has passed without the Ho Chi Minh City Tax Department processing them, Fococev Company directly contacted the Ho Chi Minh City Tax Department (Tax Accounting Department) and the Tax Inspection Team (Inspection Team 9), and it was informed that the Ho Chi Minh City Tax Department has reported the case of Fococev Company and is awaiting guidance from the General Department of Taxation to process the tax refunds for Fococev Company,” the company representative said.
Therefore, on January 3, 2024, Fococev Company sent Dispatch No. 03/CTTC to the General Department of Taxation to report on the situation of resolving the refund applications, but there has been no response from the General Department of Taxation.
In the face of prolonged obstacles in tax refunds, Fococev Company requested the Cassava Association to arrange a working session with the General Department of Taxation and asked the General Department of Taxation to provide guidance and instruct the Ho Chi Minh City Tax Department to process the value-added tax refunds for Fococev Company with a total amount of VND 366 billion.
Among them are 29 refund applications for various tax periods from June 2020 to February 2023, with a refund amount of approximately VND 355 billion. The Ho Chi Minh City Tax Department has performed the required inspection tasks several months ago but has not yet resolved them.
Furthermore, there are 02 refund applications for the tax filing periods of May 2023 and September 2023, with a refund amount of approximately VND 11 billion, falling under the category of “pre-refund” files to be inspected after the refund, but the deadline for resolution has passed according to regulations.
TAX REFUNDS IN THE CASAVA EXPORT INDUSTRY CARRY HIGH RISKS
Statistics on tax refund results in the cassava starch industry show that the proportion of successfully resolved refund cases has been decreasing over the years. Specifically, the success rate of the refund applications in 2019 was 94-95%, which decreased to 45% in 2022 and the first half of 2023.
In addition, the proportion of “pre-refund, post-inspection” cases among the refund applications has also decreased, from around 70% (2019-2021) to 49% (2022) and 22% (first half of 2023).
It is worth mentioning that the number of pending cases in 2019-2022 was only a few cases per year, while in 2023, it increased to 43 cases.
Recently, tax authorities have been cautious in processing value-added tax refunds due to concerns about tax fraud and potential liability. Local tax bureaus have spent a lot of time collecting information and documents to clarify the nature of transactions between businesses. Verifying invoices and waiting for verification results also takes a long time, causing delays in processing “pre-refund” tax refund cases beyond the regulated 40-day period.
Furthermore, according to representatives of the General Department of Taxation, tax authorities have discovered some refund applications for cassava starch that show signs of legal violations aimed at embezzling tax money, which has a negative impact on legitimate businesses that comply with tax laws. Therefore, it is necessary to tighten the handling of tax refund cases involving businesses engaged in the export of these commodities.
To reduce existing issues in the tax refund process, the leaders of the General Department of Taxation have proposed that tax bureaus strengthen exchanges and dissemination of information to business associations and taxpayers regarding value-added tax refund policies, electronic invoices, and improve taxpayers’ compliance with value-added tax declaration and refund. They also request timely provision of information on tax refund results.
In addition, the leaders of the General Department of Taxation have also requested tax bureaus to enhance their sense of responsibility, complete the assigned tasks, and provide weekly and daily reports as directed by the General Department. During the process of handling refund cases, if any obstacles arise, they should report them promptly to the General Department for timely resolution.
