HOW TO CALCULATE THE VAT REFUND FOR EXPORTED GOODS AND SERVICES

HOW TO CALCULATE THE VAT REFUND FOR EXPORTED GOODS AND SERVICES

VAT refund for exported goods and services is the remaining deductible input VAT that the Enterprise has paid to the supplier when purchasing goods and services for the operating activities of exported goods and services that satisfy the conditions for a refund.

Pursuant to the provisions of Clause 2, Article 1 of Decree 49/2022/ND-CP dated July 29, 2022 of the Government.

The enterprises that have an amount of remaining deductible input VAT of at least VND 300 million on its exported goods and services in a month (if declaring the tax every month) or in a quarter (if declaring the tax every quarter) shall be given a refund of monthly or quarterly VAT; however, the remaining deductible input VAT of less than VND 300 million in a month or quarter shall be carried forward to the subsequent month or quarter.

The refunded amount of VAT on exported goods and services shall not exceed the revenue from such exported goods and services multiplied by 10%.

1. For enterprises that only export activities: The amount of remaining deductible input VAT on the VAT declaration is used for exported goods and services that shall be refunded when it is at least VND 300 million and does not exceed 10% of the revenue from revenue of exported goods and services.

2. For enterprises that both export and sells domestically its goods and services: the VAT amount of exported goods and services that shall be refunded is determined as follows:

Step 1: Determine an amount of deductible input VAT for each activity

- The input VAT on export and sells domestically activities separately in accounting entries.

- If it is not feasibly recorded in separate accounting entries, the amount of deductible input shall be determined for each activity as follows:

   + Input VAT amount allocated to export activities = (Export revenue/Total revenue) x Total input VAT incurred during the period.

   + Input VAT amount allocated to domestic business activities = (Domestic revenue/Total revenue) x Total input VAT incurred during the period.

Step 2: Determine the amount of VAT that can be deducted during the period of domestic business activities.

The amount of remaining deductible input VAT of domestic business activities = the amount of remaining deductible VAT of domestic business activities at the beginning + the input VAT amount allocated to domestic business activities - the output VAT amount.

If the result of the deductible VAT amount of domestic business activities < 0 (domestic sales have VAT payable), it means that the output VAT amount of domestic business activities is greater than the input VAT amount in the period. However, the Enterprise has combined the input VAT amount of both activities when declaring monthly/quarterly VAT, so the VAT payable of domestic business activities is automatically offset with the deductible VAT amount of export activities.

Step 3: Determine the VAT refund amount of export activities

The amount of remaining deductible input VAT of export activities = the amount of remaining deductible VAT of export activities at the beginning of the period + the input VAT amount allocated to export activities - the VAT amount payable for domestic business activities.

VAT refund for export activities:

- Case 1: The amount of remaining deductible VAT of export activities > the revenue from such exported goods and services multiplied by 10%: The maximum refundable VAT amount is the revenue from such exported goods and services multiplied by 10%.

- Case 2: The amount of remaining deductible VAT of export activities <= the revenue from such exported goods and services multiplied by 10%: the refunded VAT amount = the amount of remaining deductible VAT of export activities (all).

For example: In the period from Q1/2023 to Q3/2023, ABC Company has the following data:

- VAT deductible at the beginning of the first quarter of 2023: VND 900 million, of which domestic VAT is VND 150 million and export VAT is VND 750 million.

- Total input VAT incurred during the period (from Q1/2023 to Q3/2023): VND 17,000 million.

- Total revenue (TDT) in the period (from Q1/2023 to Q3/2023): VND 455,000 million, of which export revenue (DTXK) is VND 365,000 million, domestic sales revenue is VND 90,000 million.

- Output VAT on domestic sales: 9,000 million VND

The VAT refund amount of exported goods in the period from the first quarter of 2023 to the third quarter of 2023 is determined as follows:

Step 1: Allocate input VAT to each export and domestic sales activity.

- Export revenue ratio: 365,000/455,000 = 80.22%

- Domestic sales revenue ratio: 90,000/455,000 = 19.78%

- Input VAT allocated to exported goods and services: 17,000x80.22% = 13,637.36 million VND.

- Input VAT allocated to goods and services sold domestically: 17,000 x 19.78% = 3,362.64 million VND.

Step 2: Determine the VAT amount of domestic sales activities.

- The mount of remaining deductible VAT of goods and services sold domestically = 150 + 3,362.64 - 9,000 = (5,487.36) million VND.

Note: Goods and services sold domestically from the first quarter of 2023 to the third quarter of 2023 incur VAT payable.

Step 3: Determine the amount of VAT on exported goods and services to be refunded.

- The amount of remaining deductible VAT of exported goods and services = 750 + 13,637.36 - 5,487.36 = 8,900 million VND

- The revenue from such exported goods and services multiplied by 10% = 10% x 365,000 = 36,500 million VND.

Conclusion: The deductible VAT amount of exported goods and services is less than the revenue from such exported goods and services multiplied by 10%. Therefore, ABC Company is refunded the deductible VAT amount of exported goods and services of VND 8,900 million.