CANCELLATION OF VAT REFUND APPLICATIONS

CANCELLATION OF VAT REFUND APPLICATIONS AND CARRY-FORWARD OF VAT CREDITS

During the VAT filing process, a taxpayer may have submitted a VAT refund application but subsequently wish to cancel the refund application and carry forward the VAT amount for credit against VAT payable in subsequent periods.

It is important to note that there is no provision allowing a taxpayer to re-submit a VAT refund application after the cancellation of the previous VAT refund application has been accepted.

From 1 July 2026, this case is governed by Article 47 and Appendix II of Circular No. 89/2026/TT-BTC.

1. When can a taxpayer cancel a VAT refund application?

Under the regulations, a taxpayer may request the cancellation of a VAT refund application if:

• The tax authority has not yet issued a VAT Refund Decision for an application subject to the refund-first, inspection-later procedure; or
• The tax authority has not yet announced the Tax Inspection Decision for an application subject to the inspection-before-refund procedure.

To cancel the refund application, the taxpayer must submit a Written Request for Cancellation of the VAT Refund Application using Form No. 01/ĐNHUY, issued together with Circular No. 89/2026/TT-BTC.

After the tax authority receives the cancellation request, the VAT refund application will be closed in accordance with the prescribed procedures.

2. How can the VAT amount already claimed for refund be carried forward for credit?

Under Circular No. 89/2026/TT-BTC, after receiving the Notice of Receipt of the Written Request for Cancellation of the VAT Refund Application, the taxpayer shall file a supplementary tax return to adjust the VAT amount previously claimed for refund.

Where such VAT amount fully satisfies the conditions for VAT credit under the applicable VAT regulations, the taxpayer may carry forward the VAT amount for credit in the subsequent tax period.

Specifically, the taxpayer shall:

Step 1: Submit the Written Request for Cancellation of the VAT Refund Application using Form No. 01/ĐNHUY.

Step 2: After receiving the tax authority's notice confirming receipt of the cancellation request, file a supplementary tax return for the tax period in which the VAT refund was claimed to reduce the amount of VAT claimed for refund.

Step 3: The adjusted VAT amount, provided that it is eligible for VAT credit, shall be declared under the item “Adjustment increasing the VAT credit carried forward from previous periods” in the VAT return for the current tax period.

3. Illustrative example

A taxpayer has VND 5 billion of input VAT credit carried forward from the June 2026 tax period, of which VND 3 billion has been included in a VAT refund application.

The taxpayer subsequently decides not to proceed with the VAT refund and instead wishes to carry forward the VAT amount for credit against VAT payable in subsequent periods.

If the tax authority has not yet issued the VAT Refund Decision or announced the Tax Inspection Decision for the VAT refund application, the taxpayer may:

• Submit Form No. 01/ĐNHUY to request cancellation of the VAT refund application;
• After receiving the notice of receipt, file a supplementary VAT return for June 2026 to reduce the VAT amount claimed for refund by VND 3 billion;
• Declare the eligible VND 3 billion under the item “Adjustment increasing the VAT credit carried forward from previous periods” in the VAT return for the current tax period.

Accordingly, the VAT amount does not lose its eligibility for VAT credit but is converted from the VAT amount claimed for refund into the taxpayer's VAT credit carried forward.

4. Key considerations for taxpayers

Taxpayers should pay particular attention to the timing of the cancellation of the VAT refund application. If the tax authority has already issued the VAT Refund Decision or announced the Tax Inspection Decision for an application subject to the inspection-before-refund procedure, the cancellation mechanism described above will no longer be applicable.

In addition, the VAT amount carried forward for credit must fully satisfy the applicable conditions for VAT credit. Therefore, taxpayers should review relevant invoices and supporting documents, non-cash payment requirements, and other applicable conditions before claiming the VAT amount as a credit.