Representatives of Korean businesses said they were having difficulty with income tax reduction incentives and slow VAT refunds in some localities.
At the dialogue conference with the General Department of Taxation on the afternoon of February 29, Mr. Choi Youngsam, Korean Ambassador to Vietnam, commented that this country's businesses have built a business foundation in many fields thanks to support from the government. tax and customs.
However, Mr. Choi informed that some businesses reported difficulties related to income tax incentives and exemptions that were previously committed, but are now cancelled. Value-added tax (VAT) refund has also been a problem for companies in this country recently.
In addition, they also encounter difficulties in regulations for including contractor contract money in the list of taxable income or double taxation with additional income from international transportation activities.
Delayed VAT refunds were mentioned by Korean companies at a dialogue with Ho Chi Minh City leaders in August 8. For example, a business in the "coal" food sector, due to delays in obtaining a land use right certificate, did not have enough documents to request this tax refund.
Mr. Choi Youngsam, Korean Ambassador to Vietnam, spoke at the dialogue conference, February 29. Image: General Department of Taxation
In addition to tax refunds, Korean companies are also concerned about not being able to deduct corporate income tax if the number of overtime hours worked by each employee exceeds 200 hours a year. “This puts many companies in trouble. Because in fact, they have to let workers work overtime to ensure orders due to lack of people," said a representative of the Korean Chamber of Commerce and Industry (KoCham).
Responding at today's dialogue, Deputy Minister of Finance Cao Anh Tuan said that this ministry received and processed hundreds of documents from Korean enterprises producing in Vietnam. Many solutions to support and overcome difficulties for businesses were offered by this agency "unprecedented".
Regarding the tax refund policy for expansion investment projects, according to Mr. Mai Son, Deputy Director of the General Department of Taxation, the advisory agency is considering and "it is expected to be able to refund taxes for businesses".
Regarding overtime hours, Mr. Son reiterated the regulation that each employee is allowed to work no more than 200 hours a year, with a maximum of 300 hours for specific jobs. "Enterprises need to find other solutions to harmonize regulations and ensure workers' health," he suggested.
Deputy Minister Cao Anh Tuan shared at a dialogue conference with Korean businesses, February 29. Image: General Department of Taxation.
According to data from the Ministry of Finance, Korean businesses' budget contributions have increased every year, reaching nearly 175.000 billion VND in the past 5 years. This number accounts for 11% of total budget revenue of FDI enterprises and 3% of the national budget.
As of January, Korea leads among 1 countries and territories investing in Vietnam with nearly 144 projects. Samsung is the leader among Korean corporations pouring capital into Vietnam, with over 9.900 billion USD. This year, the group expects growth of 22%.
Korean Ambassador to Vietnam Choi Youngsam said that the motivation to increase foreign investment in Vietnam is reflected from the expansion investment of companies that have invested capital, rather than attracting new ones. That is, new businesses will observe the decisions of existing units to evaluate Vietnam's investment environment.
“They react very sensitively to uncertainty,” Mr. Choi said, arguing that an opaque and unpredictable tax administration will freeze investment.
Therefore, he recommended that Vietnam maintain a stable economic ecology for businesses to operate dynamically. This is also the key to expanding the tax base and ensuring stable budget revenue.
In this aspect, Deputy Minister Cao Anh Tuan committed to continue improving policies and reforming administrative procedures to create a more equitable and favorable business environment for businesses. For contents beyond his authority, he assigned units to record and report to the Ministry of Finance for consideration and submission to the Government.
Phuong Dung
