According to the production process, raw cashew nuts with shell only go through basic preliminary processing steps (peeling off the hard shell, keeping the shell intact), not roasted with salt, not marinated, not deeply processed, and then exported directly.

Mr. Duong asked, what is the VAT rate applied to this product when sold domestically between enterprises (in the production - export chain)? What documents, invoices and conditions need to be prepared to deduct and refund input VAT when enterprises export abroad? What is the responsibility for issuing invoices and declarations between the preliminary processing factory (seller) and the exporting company (buyer)?

Regarding this issue, Dong Nai Provincial Tax Department has the following opinion:

Conditions for input VAT deduction

Pursuant to Law on VAT No. 48/2024/QH15, effective from July 1, 2025:

Clause 1, Article 5 stipulates the following non-taxable subjects:

"1. Products of crops, planted forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone normal preliminary processing by organizations and individuals that produce, catch, and sell themselves and at the import stage".

Article 9 stipulates the tax rate:

"... 2. The tax rate of 5% applies to the following goods and services:

d) Products of crops, planted forests (except wood, bamboo shoots), livestock, aquaculture, and fishing that have not been processed into other products or have only undergone normal preliminary processing, except for products specified in Clause 1, Article 5 of this Law;

Clause 2 and Clause 3, Article 14 stipulate input VAT deduction:

"2. Conditions for input VAT deduction are stipulated as follows:

a) Having a VAT invoice for purchasing goods and services or a VAT payment document at the import stage or a VAT payment document on behalf of a foreign party specified in Clause 3 and Clause 4, Article 4 of this Law. The Minister of Finance shall stipulate the VAT payment document on behalf of a foreign party;

b) There are non-cash payment documents for purchased goods and services, except for some special cases as prescribed by the Government;

c) For exported goods and services, in addition to the conditions specified in Points a and b of this Clause, there must also be: a contract signed with a foreign party on the sale, processing of goods, provision of services; invoices for the sale of goods and provision of services; non-cash payment documents; customs declaration for exported goods; packing list, bill of lading, goods insurance documents (if any). The Government shall stipulate the conditions for deduction in the case of exporting goods via e-commerce platforms abroad and some other special cases.

3. Business establishments that do not satisfy the tax deduction regulations in Clauses 1 and 2 of this Article and the subjects and documents made from prohibited acts shall not be entitled to deduct value added tax."

VAT refund regulations

Article 15 stipulates VAT refund:

"9. Business establishments eligible for tax refunds as prescribed in this Article must satisfy the following conditions:

a) Business establishments eligible for tax refunds as prescribed in Clauses 1, 2, 3 and 4 of this Article must be business establishments that pay value added tax according to the tax deduction method, establish and maintain accounting books and accounting documents in accordance with the provisions of the law on accounting; have a deposit account at a bank under the tax code of the business establishment;

b) Satisfy the regulations on input value added tax deduction as prescribed in Clause 2, Article 14 and do not fall under the cases prescribed in Clause 3, Article 14 of this Law;

c) The seller has declared and paid value added tax as prescribed for invoices issued to the business establishment requesting a tax refund".

Pursuant to Article 17 of Law No. 38/2019/QH14, amended by Clause 4, Article 6 of Law No. 56/2024/QH15, which stipulates the responsibilities of taxpayers:

"2. Declare accurately, honestly, completely and submit tax dossiers on time; take legal responsibility for the accuracy, honesty, and completeness of tax dossiers and documents provided to tax authorities during the process of handling tax dossiers in accordance with the provisions of the law on tax".

"... 4. Comply with the accounting, statistics, management, and use of invoices and vouchers as prescribed by law.

5. Record accurately, honestly, and completely activities that give rise to tax obligations, tax deductions, and transactions that require tax information to be declared.

6. Prepare and deliver invoices and documents to buyers according to the correct quantity, type, and actual payment value when selling goods and providing services according to the provisions of law...".

VAT refund application dossier

Pursuant to Article 28 of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Minister of Finance stipulating the VAT refund application dossier:

"VAT refund application dossier according to the provisions of the law on VAT (except for VAT refund under international treaties; refund of input VAT that has not been fully deducted when changing ownership, converting enterprises, merging, consolidating, dividing, separating, dissolving, going bankrupt, ceasing operations, implemented according to the provisions of Article 30, Article 31 of this Circular) includes:

1. Application for refund of state budget revenue according to form No. 01/HT issued with Appendix I of this Circular.

… 2. Relevant documents according to the case of tax refund, specifically as follows:...".

Based on the above instructions:

In the case where Mr. Le Duong's company purchases raw cashew nuts with shell from processing factories in Dong Nai province, this product meets the condition of being a crop product that has not been processed into other products or has only undergone normal preliminary processing by the self-producing organization, it is not subject to tax according to the provisions of Clause 1, Article 5 of the Law on Value Added Tax No. 48/2024/QH15.

In the case where the raw cashew nuts with shell mentioned above are not products specified in Clause 1, Article 5 of the Law on Value Added Tax No. 48/2024/QH15, the VAT rate of 5% shall be applied according to the provisions of Clause 2, Article 9 of this Law.

In the case where the company is eligible for VAT refund according to regulations, it must meet the conditions specified in Article 15 of the Law on Value Added Tax No. 48/2024/QH15.

The VAT refund application is made in accordance with the provisions of Article 28 of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Minister of Finance.

Taxpayer's responsibilities are prescribed in Article 17 of Law No. 38/2019/QH14, amended by Clause 4, Article 6 of Law No. 56/2024/QH15.

Dong Nai Provincial Tax Department informs Mr. Duong to know and comply with the provisions of legal documents.