The entire company spent several months verifying the invoices.

According to tax regulations, businesses must prove the legitimacy of their input invoices and supporting documents in order to be eligible for tax refunds.

"There are cases where people bought goods several years ago, and now they can't find the business owner who issued the invoice or receipt. There are also cases where people don't want to sign the confirmation because they're afraid of revealing their income and having to pay more taxes. In many cases, it takes 3-4 trips before the person agrees to sign the invoice or receipt."

"Because we couldn't trace the origin of the invoices and legal documents for the purchase and sale transactions, the tax refund was temporarily 'suspended'. Last year, the company spent months focusing solely on verifying invoices and documents to get the tax refund," a representative of a wood business in Thanh Hoa told a VietNamNet reporter.

Compared to many other localities, the amount of tax refunds for wood businesses in Thanh Hoa is not large, only about a few tens of billions of VND last year.

"Although tracing the origin of invoices and documents takes time, most wood businesses in Thanh Hoa have had their tax refunds processed. The most difficult situation now is probably for wood businesses in Quang Ninh , where the total amount of unresolved tax refunds has reached trillions of VND," a business representative said.

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According to tax regulations, wood businesses must prove the legitimacy of their input invoices and documents in order to be eligible for tax refunds. Photo: Vietfores.

The director of a plywood company that completed its tax refund procedures in 2023 stated that the plywood industry typically purchases directly from factories, making it easy to verify the origin of invoices and documents. Meanwhile, the wood chip industry faces more difficulties because it purchases from individual households, resulting in numerous invoices and related data.

"The country has over 1 million households involved in forest planting. Tracing the origin of invoices and documents consumes a lot of resources from both businesses and tax officials. In some cases, the forest owner has passed away before the inheritance procedures for their children and grandchildren have been completed. Now, we have to verify the identity and household registration of the heirs, which takes a considerable amount of time," the director said.

If tax refunds could be processed within 2-3 months, the capital turnover would be quick. However, the verification process for invoices and documents can take 6-9 months, or even a year. With a tax rate of 8-10%, total sales of around 1,000 billion VND, and tax refunds amounting to hundreds of billions of VND, any backlog would significantly impact the business operations of the enterprise.

"One bad apple spoils the whole barrel."

According to the leaders of the Vietnam Wood and Forest Products Association, many years ago, the management of invoices and documents was poor, with widespread invoice trading, and many wood businesses evading and profiting from taxes at a serious level, leading to legal consequences. As a result, the wood industry was classified by the tax authorities as "high risk," requiring strict control over invoices and documents.

Therefore, it has happened that legitimate businesses are unfairly affected by those engaged in illegal activities.

In the middle of last year, many timber businesses, facing capital shortages and being pushed to the brink, had to send appeals to the Prime Minister because the verification process for invoices and documents was too slow, resulting in trillions of dong in tax refunds not being processed.

The Vietnam Wood and Forest Products Association has repeatedly worked with the Ministry of Finance and the General Department of Taxation to find ways to overcome difficulties for businesses. The tax authorities have taken steps to screen businesses to prioritize tax refunds, and the situation is gradually improving.

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Wood businesses have become more aware of the importance of ensuring that all input invoices and documents are properly documented from the outset. Photo: Vietfores

For about a year now, timber businesses have become more aware of the importance of ensuring proper documentation and input invoices right from the start. This is especially true as Vietnamese timber import markets have imposed a series of requirements regarding traceability and plantation certification.

However, for businesses that have not been able to fully trace the origin of valid input invoices and documents from several years ago, the issue of tax refunds remains unresolved. Hundreds of billions, even trillions of dong, are still temporarily "pending" while businesses desperately need the money to develop production and business.

Many timber businesses share the hope that, instead of exacerbating the issue of invoice fraud and shifting responsibility to businesses, it would be much better if the tax authorities had a classification system so that legitimate businesses wouldn't suffer the consequences.