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Vietnam to test VAT refund scheme

posted Sep 21, 2011, 3:00 AM by Dong Travel   [ updated Sep 21, 2011, 3:02 AM by Mickey Dong Hoang Thinh ]
Vietnam will pilot a value-added tax refunds scheme for international tourists April 2012, based on Ministry of Finance detailing the refund procedures.

Local newspaper reported last week that the scheme had gained approval from Vietnam’s Prime Minister, Nguyen Tan Dung.

But the devil is in the details and that will require the Ministry of Finance to work out criteria and the scope of the refund, as well as appointing an agency to refund the tax at airports.

Once approved in full, foreign tourists will receive a 10% refund when purchasing goods at certain airports, tourism areas and shopping malls in major cities.

Shops and eligible business in Hanoi, HCMC and traditional trade villages are applying for accreditation.

The country’s two international airport gateways have been selected for the pilot phase; Hanoi’s Noi Bai and Ho Chi Minh City’s Tan Son Nhat. VAT refund kiosks will operate at the two locations April 2012 to June 2016.

Goods purchased by foreigners, minimum value VND2 million (around US$96) per receipt, will be able to claim a refund when leaving the country. The purchases must be made within a 30-day period from the time of arrival.

According to the Ministry’s Import-Export Tax Department head, Lo Thi Nhu, the pilot project will help authorities evaluate the mechanism.

A handling fee will be charged so tourists will not get the full 10% tax refund.

Tourism is now the country’s fastest growing trade sector and surveys show foreign visitors stay in Vietnam for an average of nine days and spend about US$72.5 a day.

The country expects to welcome 5.5 million international tourists this year. In the first eight months, arrivals reached 4 million, 18% higher than in the same period last year.

Source: TTRW