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Customs & Global Trade Alert | January 2026 | Change to value added tax refund conditions effective 1 January 2026
On 11 December 2025, the National Assembly issued Law No. 149/2025/QH15 on VAT and subsequently the Government released Decree 359 on 31 December 2025. These new regulations introduce significant change to the VAT refund process effective from 1 January 2026.
Under the previous rules (effective from 1 July 2025), one of the conditions for claiming a VAT refund was that the seller must have declared and paid VAT for the invoices issued to the refund claimant. This requirement will no longer apply under the new framework.
For VAT refund applications that were submitted and acknowledged by the tax authorities before 1 January 2026, but for which no decision on tax refund or offset has yet been issued, businesses are not required to satisfy the condition that the seller has declared and remitted VAT on the relevant invoices.
Implications for businesses
- The removal of this requirement is expected to simplify and accelerate the VAT refund process.
- Businesses may experience reduced compliance burdens and improved cash flow.
- Companies should review current refund applications and upcoming transactions to ensure compliance with the remaining rules.
How EY can help
- Reviewing VAT refund applications under the regulations
- Advising on compliance requirements and supporting documentation
- Facilitating interactions with tax authorities regarding the refund process