Condition VAT refund for investment projects This is an issue that any investor or project management team must understand before starting the application process, because even a small omission can result in hundreds of millions, or even billions of dong in input tax being withheld for months. (According to Clause 9, Article 15) Value Added Tax Law 2024, Currently, regulations on tax refunds for investment projects have been tightened compared to the previous period, requiring businesses to prepare documentation and maintain separate accounting records right from the project's commencement.
This article summarizes all current legal grounds, analyzes each specific condition, points out cases where tax refunds are not granted, and common mistakes that lead to application rejection. The content is compiled from a practical perspective. MAN – Master Accountant Network, a tax, accounting, and auditing consulting firm with over 30 years of experience supporting FDI and domestic businesses in Vietnam.
| The conditions for VAT refund for investment projects are a set of legal requirements that a project must meet in order to receive a refund from the State for any uncredited input VAT. |
| Main legal basis: Clauses 2 and 9 of Article 15 of the Value Added Tax Law 2024, Circular 80/2021/TT-BTC. |
| Refund threshold: the remaining input VAT of the project after offsetting must be 300 million VND or more. |
| Applicable to: businesses paying VAT using the deduction method, with projects currently in the investment phase or recently completed. |
| Some projects were disqualified: insufficient registered capital, business lines requiring conditional licenses, mineral resource exploitation, and construction of houses for sale. |
What are the conditions for VAT refund for investment projects?
According to Clause 9, Article 15 of the Value Added Tax Law 2024, Conditions for VAT refund for investment projects These are the mandatory criteria that a business must meet in order to be approved by the tax authorities for a refund. input VAT This arises during the project implementation process. It's not an automatic right, but rather the result of a process that simultaneously meets multiple legal, accounting, and invoicing requirements.
To put it simply, when a business invests in machinery and builds a factory for a project that hasn't yet generated revenue, a portion of that investment goes to waste. VAT Payments made to suppliers will be reimbursed if the project meets all the eligibility criteria. Conversely, if any of these conditions are not met, the tax amount will be carried over to the next period and will not be refunded immediately.
Legal basis for determining the conditions for VAT refund for investment projects.
- Clause 2, Article 15 of the Value Added Tax Law 2024: stipulates the principle of offsetting and the refund threshold of VND 300 million.
- Clause 9, Article 15 of the Value Added Tax Law 2024 stipulates three groups of mandatory conditions for tax refund eligibility.
- Clauses 2 and 3 of Article 14 of the Value Added Tax Law 2024: conditions for deducting input VAT and cases of exclusion.
- Article 28 of Circular 80/2021/TT-BTC: specifies the documentation required for tax refunds for investment projects.
Why do businesses need to understand the conditions for VAT refund on investment projects?
A large-scale investment project often takes many years before generating revenue, while input VAT must be paid immediately upon purchasing equipment and constructing the facility. Without understanding the conditions from the outset, businesses can easily find themselves with capital tied up in unrefunded taxes, directly impacting cash flow and project progress.
From this perspective MAN – Master Accountant Network, Through consulting with numerous FDI enterprises with factory projects in Bac Ninh, Hai Phong, and Long An, we've found that most cases of delayed tax refunds don't stem from projects not meeting eligibility requirements, but rather from disjointed and inconsistent documentation prepared from the initial investment phase. Understanding the requirements is crucial. VAT refund Planning investments right from the financial planning stage gives businesses a much more proactive approach when dealing with tax authorities.
Which entities are eligible for VAT refund on investment projects?
Not all organizations with investment projects are eligible for tax refund consideration. The main group includes:
- The business establishment is registered to pay VAT using the deduction method and has a new investment project in accordance with the law on investment.
- An investment project is divided into multiple phases or components, even when each component has been completed and generated its own revenue.
- The company has a project for the exploration, prospecting, and development of oil and gas fields that is currently in the investment phase.
- Businesses with expansion investment projects should have their accounting records separate from their existing production and business operations.
Point to note: investment projects that do not result in the creation of fixed assets for the enterprise are not subject to this group of conditions.
Basis for determining the subjects liable to VAT and the taxpayers:
According to Article 2 of Circular 219/2013/TT-BTC, VAT taxable subjects These are goods and services used for production, business, and consumption in Vietnam, including goods purchased from abroad, except for those exempt from tax as listed separately. Article 4 of the 2008 Value Added Tax Law defines VAT taxpayers as organizations and individuals producing and trading taxable goods and services, collectively referred to as business establishments, along with organizations and individuals importing taxable goods. These are two fundamental bases for determining whether an investor is eligible for VAT refund consideration for an investment project.
Benefits of VAT refund for investment projects for businesses
In addition to meeting legal requirements, investors also need to clearly understand the practical value that the tax refund will bring in order to be motivated to prepare the application seriously from the start.
- This provides additional working capital, giving the project more cash flow to continue implementing subsequent phases instead of having to borrow more funds from external sources.
- Reduce financial pressure during the construction phase, when most machinery and material costs already include VAT but the project has not yet generated revenue to offset it.
- The time to bring the project into operation was shortened thanks to additional resources to complete the unfinished items.
- Reduce the amount of capital tied up in uncredited taxes, thereby improving the efficiency of investment capital utilization.
- Creating a transparent system of accounting records and documentation facilitates smoother interactions with banks, partners, or government regulatory agencies during future inspections and audits.
Three groups of conditions for VAT refund for investment projects according to the latest regulations.
This is the core information that developers need to understand thoroughly before submitting their application.
- Condition 1: Meeting the regulations on input VAT deduction: The project must satisfy the conditions for deducting input VAT according to Clause 2, Article 14 of the Value Added Tax Law 2024, and must not fall under the excluded cases in Clause 3, Article 14. Specifically, invoices for the purchase of goods and services must be legal and valid, and payments of 20 million VND or more must be supported by non-cash payment documents.
- Second condition: the seller has declared and paid VAT. The tax authorities only accept tax refunds when the seller of goods and services to the project has fully declared and paid VAT on all issued invoices. This is why choosing a supplier with a good tax compliance history is just as important as choosing the price or quality of the equipment.
- Third condition: the legal status and accounting system of the business establishment: Businesses applying for a VAT refund must be VAT payers using the deduction method, have complete accounting records and accounting documents as required, and have a bank account registered under the business's tax identification number.
Tax refund threshold and calculation method – Practical example
Many investors mistakenly believe that any input VAT incurred during the investment phase is immediately eligible for a refund. In reality, regulations require businesses to perform offsetting first, before considering the refund threshold.
Example of a specific calculation
Company B has an investment project for a new factory while maintaining its existing production and business operations. During the period, the input VAT for the project amounted to VND 500 million. The existing production and business operations generated VAT payable of VND 150 million. Company B offset the remaining uncredited input VAT of the project, which was VND 500 million minus VND 150 million, resulting in VND 350 million. Since this figure is greater than VND 300 million, Company B is eligible to file a VAT refund application for the difference.
If the remaining tax amount after offsetting is only 200 million VND, which is below the threshold, Company B is required to carry it forward to the next tax declaration period and is not allowed to file a tax refund application in that period.
| Case | Treatment area | Application deadline |
| The project is in the investment phase, with input tax after offsetting of 300 million VND or more. | VAT refund available. | Based on the frequency of occurrence, with no specific limit. |
| The project has been completed but the initial investment phase tax has not yet been refunded. | VAT refund available. | Within one year from the date the project generates revenue. |
| The project has contributed less than the registered charter capital. | Not refundable, carried over to the next period. | Not applicable |
| Resource and mineral exploitation project | Not refundable, carried over to the next period. | Not applicable |
What documents are required for a VAT refund application for an investment project?
According to point a, clause 2, Article 28 of Circular 80/2021/TT-BTC, the ministry VAT refund application for investment projects Things to prepare include:
- Request for refund of state budget revenue, form No. 01/HT.
- Copies of the Investment Registration Certificate, Investment Certificate, or Investment License if the project requires such a certificate.
- For projects involving construction: a copy of the Land Use Right Certificate, land allocation decision or land lease contract, and construction permit.
- A copy of the document certifying the contribution of the company's charter capital.
- A copy of the business license for conditional investment and business activities, the Certificate of Business Eligibility, or a permit from the competent authority, applicable to cases stipulated in point c, clause 2, Article 10 of Decree 209/2013/ND-CP, as amended by clause 6, Article 1 of Decree 100/2016/ND-CP.
- A list of invoices and supporting documents for purchased goods and services, using form 01-1/HT, except in cases where electronic invoices have already been submitted to the tax authorities.
For VAT refund applications for new investment projects, the most easily overlooked part is the documentation proving that the registered charter capital has been fully contributed, as the tax authorities often cross-check this information with the business registration data. For projects in conditional business sectors, businesses need to prepare the necessary sub-licenses from the application stage to avoid having their applications rejected simply due to missing documentation proving eligibility to operate.
Procedure for processing VAT refund applications for investment projects.
Based on Chapter V of Circular 80/2021/TT-BTC, the procedure for VAT refund for investment projects is carried out in four basic steps.
- Step 1: Prepare your tax refund application: Businesses must gather all the necessary documents for requesting a refund of state budget revenue using form 01/HT, along with the relevant supporting documents corresponding to each specific tax refund case as mentioned in the above-mentioned application dossier.
- Step 2: Submit the documents to the tax authorities: Businesses can choose one of three submission methods: submitting directly to the tax authority, sending via postal service, or submitting electronically through the tax authority's electronic transaction portal. Electronic submission is generally recommended as it allows businesses to track processing status more quickly and transparently.
- Step 3: The tax authority receives and categorizes the documents: Within 3 working days of receiving the application, the tax authority will classify the application as either eligible for a pre-refund or pre-refund audit. If the application is not accepted, the tax authority will send a written request to the business for explanation or additional information; this time is not included in the overall processing time. If the delay in issuing the refund decision is due to the tax authority's fault, the business will also be paid interest calculated on the amount and number of days of delay.
- Step 4: Receive your VAT refund: After the tax refund decision is made, the business receives the money as notified by the tax authority. The maximum processing time is 6 working days for applications eligible for immediate refund, and 40 working days for applications subject to pre-refund verification.
| Profile | Processing time | Characteristic |
| Refund first, audit later. | Maximum 6 business days | Applicable to businesses with a good tax compliance history. |
| Check first, get your refund later. | Maximum 40 business days | This applies when the application shows signs of risk or when the business is claiming a tax refund for the first time. |
Legal documents related to VAT refund for investment projects.
Important note: Businesses with investment projects spanning multiple tax declaration periods should conduct periodic reviews to avoid confusion between the old regulations and the new regulations applicable from the time the Value Added Tax Law 2024 comes into effect.
| Legal documents | Number / Date of Issue | Related content |
| Value Added Tax Law 2024 | National Assembly, effective from July 1, 2025 | Regulations on conditions, thresholds, and exclusions for tax refunds for investment projects. |
| Circular 80/2021/TT-BTC | Ministry of Finance | Instructions on required documents, procedures, and deadlines for processing VAT refunds. |
| Decree 209/2013/ND-CP | Government | Regulations detailing the implementation of certain articles of the Value Added Tax Law, serving as a basis for comparison with conditional business sectors. |
| Decree 100/2016/ND-CP | Government | Amendments and additions to Decree 209/2013/ND-CP |
| Value Added Tax Law 2008 (amended 2013) | Reference | The old regulations regarding VAT taxpayers have been partially replaced since July 1, 2025. |
Case Study: FDI enterprises in Bac Ninh handle tax refunds for new investment projects.
Background
Company Y, a foreign-invested enterprise producing electronic components, is implementing its second factory project in Bac Ninh with a total investment of over 200 billion VND. During the two years of construction, the company incurred input VAT of nearly 12 billion VND from purchasing machinery and building the factory, while its existing production and business operations only covered a small portion of the cost.
Processed based on advice from MAN – Master Accountant Network.
Experts at MAN We assist companies in implementing three steps: firstly, completely separating invoices and documents of the new project from existing production and business activities from the outset; secondly, reviewing the progress of capital contribution to ensure it matches the investment registration before submitting the application; and thirdly, preparing legal documents regarding land and construction permits simultaneously to avoid being asked for additional documents midway through the process.
The measured results
- Tax refund applications are classified by the tax authorities as "refund first, audit later," shortening the time to receive the refund to approximately 6 working days from the date of the decision.
- The company recovered over 11 billion VND in input VAT, significantly improving cash flow for the next phase of machinery installation.
- No further explanations were requested from the tax authorities thanks to the comprehensive documentation prepared right from the investment stage.
Expert opinion: Common mistakes that lead to rejection of VAT refund applications for investment projects.
With over 30 years of experience in tax consulting and auditing in Vietnam, the experts at MAN – Master Accountant Network It identifies eight of the most common types of errors.
- Error 1: Failure to separate the investment project from existing production and business activities: Many businesses combine invoices from new projects into their general accounting system, making it difficult to determine the specific input VAT for each project and prolonging the pre-refund audit process.
- Error 2: The registered capital was not fully contributed at the time of application submission. This is a common mistake for newly established businesses. If the actual contributed capital is lower than the registered capital, the tax refund application will be rejected and transferred to the next period, even if all other conditions are met.
- Error 3: Missing non-cash payment documents: For expenses of 20 million VND or more, if the business pays in cash or lacks valid bank documents, the corresponding VAT will not be accepted for deduction, directly affecting the amount of tax refund requested.
- Error 4: Submitting the application one year after the project was completed: For projects that have been completed but have not yet received initial investment tax refunds, businesses have exactly one year from the date revenue is generated to submit their applications. Many businesses miss this deadline due to confusion between the project acceptance date and the actual revenue generation date.
- Error 5: Input invoices do not meet the deduction requirements: Some invoices contained incorrect information, were issued at the wrong time, or did not match the project contract and acceptance report. When the tax authorities cross-checked these invoices, they were excluded from the tax refund request, reducing the amount the business actually received compared to the initial declaration.
- Error 6: Delay in providing explanations or supplementary documents as requested: When tax authorities issue requests for additional information, many businesses respond slowly because they lack a dedicated department to monitor the progress of their applications. This not only prolongs the waiting time but can also lead to the applications being referred for further investigation.
- Error 7: Incorrect or missing information in the tax refund application form: In many cases, applicants incorrectly declare the tax amount requested for refund, enter incorrect business information on form 01/HT, or omit required supporting documents. These seemingly minor errors cause applications to be rejected at the initial classification stage, resulting in wasted time and the need to resubmit them from scratch.
- Error 8: Incomplete accounting records and documentation: When tax authorities conduct on-site inspections, many businesses fail to present complete original records and documents related to the project. This deficiency prolongs the inspection time and can easily lead to the amount of tax refunded being lower than the amount declared.
Conclude
Understanding the conditions for VAT refund for investment projects right from the planning stage helps businesses proactively manage cash flow and avoid having capital tied up in unrefunded tax for many years during project implementation. From the threshold of 300 million VND, requiring separate accounting entries, to the one-year deadline after project completion, each condition needs to be strictly controlled from the moment the first invoice is issued.
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Responsible for production and professional content review by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam with over 30 years of experience in accounting, auditing, taxation, and corporate financial consulting.
Frequently Asked Questions about VAT Refund Conditions for Investment Projects
After offsetting against the taxes payable from existing business operations, if the remaining input VAT of the project is 300 million VND or more, it is eligible to file a tax refund application.
Yes, provided the business is registered to pay VAT using the deduction method, has a legitimate investment project, and fully meets the requirements regarding invoices, documents, and registered charter capital.
No. This is one of the clearly excluded cases according to the regulations; the business must carry forward the uncredited tax amount to the next period instead of receiving a refund.
Businesses need to review the notification from the tax authorities, clearly identify the reason, and provide supplementary information or explanations within the required deadline. The time spent on providing explanations will not be included in the processing time for tax refund applications.
Each completed phase or item that generates its own revenue will be considered for tax refund eligibility independently, without waiting for the entire project to be completed. What is the minimum threshold for VAT refund for investment projects?
Can newly established businesses get a VAT refund for their investment projects?
Are VAT refunds available for housing construction projects intended for sale?
What should be done if a VAT refund application for an investment project is rejected?
Businesses need to review the notification from the tax authorities, clearly identify the reason, and provide supplementary information or explanations within the required deadline. The time spent on providing explanations will not be included in the processing time for tax refund applications.
