Vietnam Tax Department clarifies VAT refund risk protocols

The Tax Department has issued new guidance clarifying that risk warnings regarding suppliers or invoices are not automatic grounds for denying Value Added Tax (VAT) refunds. Previously, many businesses reported delays in refunds due to risk alerts triggered by entities further down the supply chain, such as F2 or F3 suppliers.

Under the new instructions, warnings related to a supplier's status—such as being inactive at a registered address, dissolving, or terminating tax identification numbers—serve only as a basis for tax authorities to assess risk and conduct verification. These alerts do not independently justify refusing a refund or demanding the return of previously refunded VAT.

Refund decisions will continue to be based on the legality of invoices, the authenticity of transactions, and whether the enterprise meets all regulatory requirements at the time of the transaction. Tax authorities will only recover previously refunded VAT if an official inspection or authorized decision determines that the enterprise failed to meet conditions or committed tax law violations.