An FDI enterprise exporting all of its output accumulated refundable input VAT in the tens of billions of dong over two years, but its refund file was refused in significant part: some input invoices were attributed to suppliers flagged as tax risks, some shipments had bank payment documents said not to match, and the remainder sat frozen pending supplier verification. For an exporter, a VAT refund is not a concession but survival cash flow, so a refusal decision quickly becomes a full tax dispute.
The legal framework: VAT refunds under the 2024 VAT Law and the 2025 Law on Tax Administration
The Law on Value Added Tax No. 48/2024/QH15, effective from 1 July 2025, prescribes the cases eligible for VAT refunds, of which two attach directly to FDI enterprises: a business with exported goods or services whose uncredited input tax reaches the statutory threshold in the period, and an investment project still in its investment phase, not yet operating, with a large accumulated input tax balance meeting the law conditions. The through-line condition is that input tax must attach to goods and services used for taxable or export activities, supported by lawful invoices and documents, non-cash payment where compulsory, and for exports a complete export dossier of contracts, customs declarations and bank payment evidence. Missing any link in that documentary chain gives the tax authority ground to exclude the corresponding amount from the refund.
The refund file procedure sits within the Law on Tax Administration No. 108/2025/QH15, effective from 1 July 2026: files are channelled into refund-first-audit-later or audit-first-refund-later streams according to taxpayer risk and compliance history; first-time export refund claimants or files showing risk signs usually fall into the audit-first stream. A decision refusing the refund, or a notice excluding part of the claimed amount, is an administrative document that can be complained against under the Law on Complaints No. 02/2011/QH13 within the ninety-day period of Article 9, and can be sued over administratively if the complaint fails. What the enterprise must avoid is passive waiting: a file frozen at the supplier-verification step does not turn into a decision by itself, and without written prompting the wait can stretch across quarters with no legal milestone to complain from.
Applying the rules: four refusal families and how each one breaks
The first family is input invoices flagged as risky: the enterprise supplier appears on lists of businesses that abandoned their address, are inactive at the registered address or are warned about invoicing. This family breaks by proving the purchase transactions were real and independent of the supplier risk: contracts, delivery records, warehouse documents, bank payments and the trace of goods actually entering export production. The second family is an unclosed export dossier: customs declarations, commercial invoices and payment documents carrying small mismatches in quantity, value or timing that make the authority doubt the set coherence; the cure is a shipment-by-shipment reconciliation table explaining every mismatch with bank and carrier documents. The third family is input tax shared between export and other activities that was not allocated by the correct method, casting doubt on the whole allocated part. The fourth family is an investment project not yet meeting refund conditions because investment papers, progress or project scope changed while the refund file was never updated to match.
On timing, there is no single trustworthy figure for how long a refund takes across all files: refund-first files move far faster than audit-first files, and actual time depends on the complexity of the document chain and the speed of supplier verification. What the enterprise controls is file quality at first submission and a rhythm of written prompting: every progress inquiry creates a legal time marker for the file. When the authority refuses part of the claim, the enterprise should split the refused amount item by item by reason, because experience shows itemised complaints with strong evidence are accepted far more readily than a challenge to the whole decision. The undisputed tax should be pushed for immediate refund to release cash flow, instead of letting the entire file freeze behind the disputed part.
Checklist when a VAT refund file is refused or frozen
An export FDI enterprise blocked at the refund stage should take the following steps:
- Require the tax authority to state in writing each amount excluded from the refund claim and the specific reason for each, forming the basis for classifying the dispute and counting the complaint deadline.
- Classify refused amounts into four families (risky invoices, unmatched export documents, shared input tax allocation, investment project conditions) and assign each family its own evidence owner.
- Build the genuine-transaction proof set for flagged invoices: contracts, delivery, warehousing, bank payment and the trace of goods into production and export.
- Request split handling: refund the undisputed tax immediately and hold only the complained part, protecting enterprise cash flow during the dispute.
- File the complaint within the ninety-day period under Article 9 of the Law on Complaints No. 02/2011/QH13 against the non-refund decision, while keeping written pressure on verification progress for the still-frozen part of the file.
Frequently Asked Questions
What should an export FDI company do when its VAT refund is refused?
First require the tax authority to state in writing each refused amount and its reason. Then review the evidence reason by reason: were the purchases genuine, is the export dossier closed, was the input tax allocation method correct. For amounts with complete evidence, complain against the non-refund decision within the ninety-day period under the Law on Complaints No. 02/2011/QH13; at the same time, request immediate refund of the undisputed tax so the whole refund cash flow is not frozen.
What are the usual reasons for refusing a VAT refund?
The four most frequent families are: input invoices treated as risky because the supplier abandoned its address or was warned about invoicing; export dossiers that do not reconcile among customs declarations, invoices and bank payment documents; input VAT shared across several activities that was not allocated correctly, leading to exclusion of the whole allocated part; and investment projects not yet meeting the refund conditions of the Law on Value Added Tax No. 48/2024/QH15. Each family needs its own proof method; one general explanation letter cannot cover them all.
Where do we complain against a non-refund decision?
The enterprise files a first complaint with the tax authority that issued the non-refund decision or notice, under the tax sector complaint competence and the ninety-day period of Article 9 of the Law on Complaints No. 02/2011/QH13. If dissatisfied with the first outcome, complain to the superior tax authority or bring an administrative lawsuit at the competent court under the Law on Administrative Procedures No. 93/2015/QH13. The complaint file should be organised item by item, with separate evidence for each refused amount.
How long does a VAT refund take?
Timing depends on the file stream under the Law on Tax Administration No. 108/2025/QH15: refund-first-audit-later files are processed faster than audit-first-refund-later files, and files requiring supplier or export document verification usually run longer than average. No fixed figure applies to every enterprise. What the enterprise controls is filing a closed dossier from the start and prompting progress in writing to create legal time markers for each processing stage.
This article has been quality-reviewed by the FLAW AI Legal Council
