VINACHEM

Foreigners will enjoy value-added tax (VAT) refunds at more border gates when they exit from Vietnam starting July 1, following approval by Prime Minister Nguyen Tan Dung.

In his document issued on May 30, the Prime Minister agreed to increase the number of border gates accepting VAT refunds from two to seven. They include the four international airports of Noi Bai in Hanoi, Tan Son Nhat in HCM City, Danang in Danang City and Cam Ranh in Khanh Hoa Province. Three international harbours are also on the list, including Khanh Hoi in HCM City, Danang in Danang City and Nha Trang in Khanh Hoa Province.

The new regulation is in accordance with the Government's decree regulating that foreigners and Vietnamese residing in foreign countries and possessing passports or visas which are issued by foreign competent agencies, shall be refunded for goods purchased in Vietnam and taken along upon exit.

In 2012, a pilot VAT refund scheme for foreigners and overseas Vietnamese passing through the country's two largest airports of Noi Bai in Hanoi and Tan Son Nhat in HCM City started on July 1. Four VAT stations and two checking stations in the two airports were set up as part of the scheme. So far, there have been 69 enterprises joining in the pilot programme, along with 268 shops nationwide.

After two years, the scheme has received positive results as the number of foreigners enjoying VAT refunds, as well as the refunds, have reportedly increased.

According to the Vietnam Customs statistics, as of February this year, there had been more than 8,600 people receiving the VAT refund. The total value of goods has been reported up to VND425 billion (over US$20.2 million), equivalent to VND32.9 billion (US$1.6 million) of VAT refunds. Of those, more than 8,000 cases were refunded in HCM City, with the total value of goods up to VND390 billion (US$18.5 million), equivalent to VND30billion (US$1.4 million) of VAT refunds.