Samsung tax refund delayed for two years in HCMC

By Vien Thong   August 16, 2023 | 07:47 pm PT
Samsung tax refund delayed for two years in HCMC
Youn Chel Woon, CEO of Samsung Electronics HCMC CE Complex, speaks at a meeting on August 16, 2023 in Ho Chi Minh City. Photo by ITPC
A Samsung subsidiary based in Ho Chi Minh City has not received a VAT refund of US$44 million for two years due to red tape.

Samsung Electronics HCMC CE Complex (SEHC), which exports around 90% of its products, formally became an export-processing company in May 2021, making it eligible for value-added tax incentives.

But the VAT refund for before and after the transition it was supposed to receive never arrived, Youn Chel Woon, its CEO, said at a meeting between South Korean companies and HCMC authorities Wednesday.

Vietnam offers a number of tax incentives to foreign enterprises and exporters, including VAT breaks.

SEHC became eligible for a refund of $24 million from the time before it became an export-processing enterprise, and $20 million from the period between June 2021 and December 2022.

The city tax department has been examining the situation since July and recently submitted a report to the General Department of Taxation.

Woon urged city authorities to be more proactive in refunding taxes, saying some of his company’s suppliers are also having difficulty getting tax refunds promised by the government.

Another South Korean firm, CJ Foods Vietnam, has not received tax refunds for lacking the title deeds for the land on which its factory is built.

It was supposed to receive the documents in 2019.

Issues with tax refunds are among the main problems South Korean companies face in Vietnam, Choi Bundo, chairman of the Korea Chamber of Business in Vietnam, said.

"Resolving tax refund problems is taking longer and longer. We seek a solution from the authorities."

Nguyen Tien Dung, deputy head of the city tax department, referring to the SEHC case, said the reason for the delay is that the Ministry of Finance is yet to decide whether the refund would be made by the tax or customs department.

As for the CJ Foods delay, he said some changes are occurring at the Hiep Phuoc Industrial Park where the company has its factory, and once they are complete it would receive the title deeds.

The city government has instructed relevant authorities to resolve this issue by September this year, he added.

South Korea is the fourth biggest investor in HCMC with $5.5 billion in 2,135 projects.

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