VAT refund support for a wooden furniture exporter

Background

The client is a mid-sized wooden furniture manufacturer exporting almost all of its output to the US and Europe. Because its inputs bear VAT while its export sales are zero-rated, uncredited input VAT had accumulated over 18 months to the equivalent of nearly two months of operating costs. The company had filed refund claims on its own before, but had to supplement them several times and eventually stopped for lack of experienced staff.

Challenges

• Around 14% of input invoices had mismatched details or came from timber, adhesive and paint suppliers whose status needed verification.
• Some payments to small suppliers were made in cash or through personal bank accounts.
• Customs declarations, contracts and payment evidence from overseas buyers were not organised by shipment.

Our approach

• Weeks 1–3 — review: matched more than 6,200 input invoices against supplier status and payment evidence and classified them by risk level.
• Weeks 4–5 — document completion: assembled files for 214 export shipments, each with contract, customs declaration, invoice and bank payment evidence.
• Week 6 — scoping decision: agreed with the board to exclude items that did not meet the conditions rather than include them and lengthen processing.
• Weeks 7–9 — filing and follow-up: submitted the refund application electronically, prepared supporting explanations and accompanied the client during the tax authority's on-site review.

Results

In the final submission, the share of input invoices needing further explanation fell from 14% to under 2%. The application was accepted without a second round of supplements; the refund amount was reviewed and decided by the tax authority under its normal procedure. The company also adopted new rules: all supplier payments above a set threshold go through a bank, and document sets are assembled per shipment at the time of export.

“Whether a refund is quick or slow depends largely on keeping documents in order from the outset. We help clients change how they work so they can do it themselves next time.” — Mr Ly Gia Hung, Partner, Tax Advisory, Corvane Advisory

Lessons learned

For exporters, VAT refunds are a working-capital matter, not just a formality. Quarterly supplier reviews help identify risky invoices early. Proactively excluding uncertain amounts often leads to smoother processing than claiming the maximum.

After the first refund round, the company moved to quarterly filings with Corvane reviewing each one. The finance team now checks supplier status before signing timber, adhesive and paint contracts, and each export shipment has its own document folder on Corvane Portal, so preparing subsequent claims takes about a week rather than several months.