Determining Value Added Tax (VAT) refund for the case of a parent company engaged in export activities to its foreign subsidiary

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On April 16, 2024, the General Department of Taxation issued Circular No. 1577/TCT-KK regarding VAT refund policies for cases where the parent company engages in export activities to its foreign subsidiary.
- Pursuant to legal regulations, in the case where the parent company exports machinery and equipment to its subsidiary established in Cambodia to implement an investment project in Cambodia, it does not fall under the category of VAT refund for investment projects as stipulated in the Value Added Tax Law and relevant guiding documents.
- The conditions for input VAT deduction, VAT refund for exported goods and services shall be implemented according to the guidance provided in Article 16 of Circular No. 219/2013/TT-BTC dated December 31, 2013, issued by the Ministry of Finance (as amended and supplemented). Additionally, capital contributions must comply with regulations on foreign exchange management for overseas investment activities. In cases where the Company incurs an increase or decrease in investment capital by cash and/or the amount transferred abroad during the period exceeds the schedule confirmed by the State Bank, it must register changes in foreign exchange transactions with the State Bank in accordance with provisions stated in points c and d, Clause 1, Article 11 of Circular No. 12/2016/TT-NHNN dated June 29, 2016, issued by the State Bank of Vietnam.



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