Remove difficulties in customs – tax policies for Korean enterprises

Many Korean enterprises sent questions to the Ministry of Finance.

In the dialogue, representatives of the General Department of Taxation and the General Department of Vietnam Customs introduced a number of new policies which took effect from October 2020 to the present.

In particular, Resolution No. 406/NQ-UBTVQH15 and Decree No. 92 on a number of solutions to support people and businesses affected by the Covid-19 pandemic; Decree No. 52/2021/ND-CP of the Government on deadline extension of payment of value-added tax, corporate income, personal income tax and land rent in 2021. Decree 102/2021/ND-CP amending and supplementing a number of articles of the Decrees on sanctioning of administrative violations in the field of taxes, invoices.

Furthermore, representatives of Korean businesses reflected that, although the Tax and Customs sector had created favorable conditions for businesses to implement laws and policies on tax, some businesses still faced difficulties when implementing policies.

For example, there is a case where a Korean enterprise acquired a domestic enterprise that was bankrupt or was sold by a bank. In fact, this was still a new investment, but enterprises were not entitled to preferential corporate income tax like new investment enterprises.

The representative of Posco Vietnam Company said that, in 2021, the enterprise was subjected to an anti-transfer pricing inspection and the enterprise would have to pay a huge amount of tax. In the current context of the Covid-19 pandemic, the inspection and examination of tax arrears would cause difficulties for businesses. So the enterprise expected the authorities create conditions for businesses to overcome difficulties.

Facing the reflections and recommendations of Korean businesses, at the conference Mr. Vu Xuan Bach, the Director General of Taxation gave satisfactory answers to problems of these enterprises.

Along with that, Mr. Au Anh Tuan, Director of the Customs Control and Supervision Department, General Department of Vietnam Customs, responded to a number of suggestions related to the implementation of import-export tax policy.

Accordingly, with the suggestion of LG Display Company regarding tax-exempt items, Mr. Au Anh Tuan said that according to the provisions of Import-Export Duty Law 2016, imported and exported goods are subject to tax. However, goods would not be subject to tax if they were imported into the non-tariff zone.

According to the provisions of Article 16 of Circular 38/2015/TT-BTC, as amended and supplemented in Circular No. 39/2018/TT-BTC, enterprises must submit one copy of the contract to import goods into the non-tariff zone. Then they will be subject to the preferential tariff. However, businesses must provide enough documents to enjoy the preferential tariff as prescribed. If enterprises present the prescribed documents, they will enjoy tax incentives.

In fact, this regulation still faces many problems, in the future, the Customs authority will study to amend the provisions in Circular No. 38/2015/TT-BTC and Circular No. 39/2018/TT- BTC. In the immediate future, if it does not meet the requirements on the documents as prescribed in these circulars, it must be subject to tax arrears.

In addition, a representative of the International Cooperation Department (Ministry of Finance) answered questions from businesses about the time that Vietnam will apply the tax rate under the RCEP Trade Agreement.

Accordingly, the Agreement includes 15 member countries, and took effect from January 1, 2022. However, the agreement was signed under the commodity code HS 2012. And now, it follows the commodity list 2022, so Vietnam and the member countries are in the process of a technical review of schedules of commitments.

In Vietnam, after completing the technical review, the Ministry of Finance would draft a Decree on special preferential import tariffs to implement the RCEP agreement. In the future, the Ministry of Finance would consult with ministries and sectors to submit to the Government for promulgating a decree in accordance with the legal documents as well as the implementation of the committed schedule, ensuring to take advantage of the benefits from this agreement.

Moreover, Korean businesses highly appreciated the dialogue on customs – tax policies and answered questions in detail by the units under the Ministry of Finance.

The Korean business community hoped that in the future, the Ministry of Finance and the Korean Embassy would continue to hold tax and customs policy dialogues with Korean businesses.