The GDT issued OL 1746 which references to Article 4 (providing a list of non-deductible expenses for CIT purposes) of Circular 96/2015/TT-BTC, in which it is mentioned that: “input 

Accordingly, the GDT has advised that companies which have creditable input VAT but have claimed a CIT deduction, rather than a VAT credit will be denied the deduction under a tax audit. The CIT shortfall arising would then have to be paid along with interest and penalties. 

However, according to Point 2 Article 5 of Decree 83/2013/ND-CP and Point 5 Article 10 of Circular 156/2013/TT-BTC on the submission of amended tax declarations, these companies may still be able to amend the relevant VAT declarations to claim a VAT credit if these VAT declarations have not been audited/inspected by the tax authorities. 

The Law on VAT generally provides that new investment projects which are in the 
investment stage and have accumulated creditable input VAT of VND300 million or more, shall be entitled to a VAT refund. 

Decree 100/2016/ND-CP providing guidance on the implementation of Law on VAT further clarifies that with respect to a new investment project which is located in a different province 

Circular 130/2016/TT-BTC guiding the implementation of Decree 100 clarifies that irrespective of where an investment project is located, the creditable input VAT of the investment project must be firstly credited against the VAT payable of any existing investment project, and the outstanding balance of VND300 million or more shall be refundable. 

Notwithstanding the above, in practice, a number of provincial tax authorities deny the VAT refund applications with respect to new investment projects located in the same provinces or central cities as their headquarters on the argument that Circular 130 does not align with Decree 100 and the VAT Law on this matter.  
 

In addition, whether expansion investment projects are entitled to VAT refunds is a long-standing issue. In OL 5559, the MoF does not express any specific opinion on the VAT refund with respect to expansion investment projects and new investment projects which are located in the same provinces or central cities as their headquarters, however, the MoF requests provincial tax authorities to review these projects for VAT refund purposes. This may indicate that the VAT refund is also applicable to expansion investment projects and new investment projects which are located in the same provinces or central cities as their 
headquarters.   

In view of the above, companies which may potentially be impacted by OL 5559 should consider seeking a written confirmation from the tax authorities on this matter.