VAT refunds for foreign-invested enterprises in Vietnam fall into three eligible channels: export activity refunds, investment project refunds, and the newly added 5% VAT rate business refunds (Law 48/2024/QH15, Article 15, effective July 1, 2025). All three share the same VND 300 million (~USD 12,000) accumulated input VAT threshold. Three regulatory shifts from 2025–2026 directly affect FDI refund strategy: import-for-re-export operations lost eligibility permanently, supplier compliance verification was dropped from January 2026 under Decree 359/2025/ND-CP, and on-spot import/export transactions received 0% VAT treatment under Law 90/2025.
Key takeaways
- Export refunds are capped at 10% of export revenue (Circular 69/2025, Article 7). On-spot import/export operations now qualify for 0% VAT under Law 90/2025.
- 5% VAT businesses can claim refunds after 12 months or 4 quarters of accumulated uncredited VAT ≥ VND 300 million (~USD 12,000). Mixed-rate operations (5% + 10%) are excluded.
- Supplier compliance verification removed from January 1, 2026 (Decree 359/2025/ND-CP) — in practice, this cut refund cycles by 30-45 days for export processors.
- Import-for-re-export and M&A transactions are permanently excluded from refund eligibility. Restructuring toward manufacturing models restores access.
Eight categories of eligible VAT refunds
Vietnam’s VAT refund framework defines eight categories under Law 48/2024/QH15, Article 15. Three categories directly serve commercial FDI operations; the remaining five cover diplomatic, ODA, and government-directed cases that rarely apply to foreign-invested enterprises.
Among FDI refund applications processed in 2025, export activity refunds accounted for the highest volume, while investment project refunds involved the largest individual claim amounts — frequently exceeding VND 5 billion (~USD 200,000).
| Category | FDI relevant? | Key requirement |
|---|---|---|
| Exported goods & services | ✅ | Refund capped at 10% of export revenue (Circular 69/2025, Article 7) |
| Investment projects | ✅ | VND 300M (~USD 12,000) accumulated input VAT; submit within 1 year of revenue start |
| 5% VAT rate businesses | ✅ | VND 300M over 12 months or 4 quarters (Decree 181/2025, Article 31) |
| Dissolution / Bankruptcy | Situational | Only dissolution and bankruptcy remain eligible from July 2025 |
| Foreign visitors | ❌ | Departure airport claims with original invoices |
| ODA / Aid projects | Situational | Grant agreements must specify VAT refund provisions |
| Diplomatic privileges | ❌ | Vienna Convention, bilateral agreements |
| Special government cases | Rare | Prime ministerial directives for national priority projects |
For investment project refunds — including IRC requirements, Form 02 declarations, phased construction deadlines, and common rejection triggers — see Investment VAT Refund guide →.
Export activity refunds
Export VAT refunds are capped at 10% of total export revenue from qualifying goods and services (Circular 69/2025/TT-BTC, Article 7, Appendix II). FDI manufacturers with high equipment import costs frequently hit this ceiling — input VAT exceeding the cap carries forward to subsequent periods but cannot be refunded in the current cycle. Capital-intensive operations often face 2-3 quarterly periods before recovering the excess balance.
On-spot import/export transactions received clear legal treatment under Law 90/2025/QH15 (effective July 2025). The law grants 0% VAT to operations where goods are sold to foreign buyers but physically delivered to Vietnamese recipients. Previously, tax authorities in different provinces treated on-spot transactions inconsistently — some accepted 0% VAT, others reclassified them as domestic sales at 10%. Law 90/2025 eliminates this inconsistency for manufacturers operating within industrial parks.
Documentation gaps remain the primary rejection trigger for export refund claims. The most common failures: incomplete invoice chains (missing even one supplier invoice invalidates the entire claim), customs declaration mismatches between Form 03/HQXK and actual shipment records, and bank payment confirmations that don’t clearly identify the foreign buyer. Maintaining proper accounting documentation prevents 60-90 day resubmission delays.
5% VAT rate business refunds
5% VAT rate business refunds — added under Decree 181/2025/ND-CP, Article 31 (effective July 2025) — open refund access to sectors previously locked out: agricultural processors, educational service providers, healthcare facilities, and fertilizer distributors operating exclusively at the 5% VAT rate.
The minimum threshold remains VND 300 million (~USD 12,000), matching other refund categories. The distinguishing factor is the accumulation window: 12 consecutive months or 4 quarters from when the enterprise first generates uncredited 5% VAT input. For many agribusiness operations, the first eligible refund claim comes 12-18 months after project launch — a timeline that requires advance cash flow planning.
The mixed-rate trap: FDI enterprises combining 5% and 10% VAT activities lose access to the 5% VAT refund category entirely. Tax authorities verify eligibility through VAT declaration forms — mixed declarations result in automatic rejection. Companies operating multiple business lines under a single entity should evaluate whether separate legal entities would preserve 5% refund eligibility for qualifying activities.
Supplier compliance removed (January 2026)
From January 1, 2026, Decree 359/2025/ND-CP removed the requirement that sellers must have declared and paid VAT before buyers can claim refunds. The seller-verification requirement existed only briefly under Decree 181/2025/ND-CP Article 37.3 (July–December 2025). In our practice, removing supplier verification cut export processing enterprises’ refund cycles by 30-45 days — previously, refund applications stalled when any supplier in the invoice chain had incomplete tax filings, regardless of the buyer’s own compliance. Removing seller verification aligns with Vietnam’s broader tax incentive framework aimed at reducing compliance burdens for foreign investors.
Excluded business models from July 2025
Import-for-re-export: permanently excluded
Import-for-re-export operations — importing goods into Vietnam and re-exporting without domestic value addition — are permanently excluded from VAT refund eligibility (Law 48/2024/QH15, Article 15, Clause 1(a)). These operations still receive 0% VAT on exports, but accumulated input VAT from logistics, warehousing, and handling costs becomes a permanent cost. Companies operating through bonded warehouses and customs processing zones are most affected — some have seen effective cost increases of 2-3% on transaction value.
M&A and corporate restructuring: excluded
Any transaction involving ownership changes — mergers, acquisitions, equity transfers, enterprise-type conversions, de-mergers — loses refund eligibility (Law 48/2024/QH15, Article 15, Clause 4). Only dissolution and bankruptcy retain refund rights. The exclusion creates a critical planning consideration: FDI entities holding significant uncredited VAT should file refund claims before initiating any restructuring transaction. Once the restructuring is registered, the accumulated VAT balance becomes irrecoverable. Companies planning M&A should evaluate asset purchases over equity transfers — asset-based deal structures may preserve refund eligibility under Decree 181/2025/ND-CP.
Restoring refund eligibility
Foreign-invested enterprises affected by these exclusions can restructure toward:
- Manufacturing operations that process, assemble, or substantially transform imported inputs — restoring export refund eligibility
- Equipment leasing where the lessor purchases equipment and leases to third parties — qualifying under investment project refund provisions
- Service exports (software development, BPO) serving foreign markets — maintaining export refund eligibility if services are consumed outside Vietnam
Before restructuring, request a written tax ruling from your provincial Tax Department confirming the revised model qualifies. Preemptive clarification prevents costly reclassification disputes after capital deployment. When involving related entities, ensure compliance with transfer pricing regulations.
Processing timelines and risk classification
VAT refund processing timelines depend entirely on the tax authority’s risk classification — and most first-time FDI applicants land in the slowest tier:
| Risk level | Processing time | Typical profile |
|---|---|---|
| Low-risk | 6 working days | Established FDI with 3+ years operations, zero disputes, consistent export revenue |
| Standard-risk | 15-20 working days | Mid-sized projects, known investors, clean compliance history |
| High-risk | 40 working days | First-time applicants, conditional business lines, refund > VND 1 billion (~USD 40,000) |
The difference between 6-day and 40-day processing creates significant cash flow impact for FDI enterprises. Classification factors include the applicant’s 24-month tax compliance history, previous audit outcomes, revenue stability, and documentation completeness. Any unresolved tax dispute automatically triggers high-risk classification — even if the dispute is unrelated to the refund claim.
In practice, HCMC and Hanoi tax departments process applications faster than statutory maximums, while provincial offices in newer industrial zones frequently approach the full statutory period.
For investment project processing — including provincial timing differences between HCMC/Hanoi and industrial provinces — see Investment VAT Refund →. For the complete Vietnam tax framework, see our Tax System overview →.
