​Samsung Ho Chi Minh City complains about not receiving $22.9 million in VAT refunds

​Samsung Ho Chi Minh City complains about not receiving $22.9 million in VAT refunds

Samsung Electronics HCMC CE Complex (SEHC) has not received value-added tax (VAT) refunds of more than VND582 billion (US$22.9 million), causing difficulties in the company’s business operations, Kwon Choon Ki, general director of the company, said at a meeting on Tuesday between Ho Chi Minh City leaders and South Korean businesses.

Kwon Choon Ki, general director of Samsung Electronics HCMC CE Complex. Photo: Hong Phuc / Tuoi Tre

SEHC was established in the Saigon Hi-Tech Park in Ho Chi Minh City in 2016.

With about 5,200 employees, the company specializes in manufacturing household electronic products such as televisions, refrigerators, washing machines, and vacuum cleaners.

In 2024, its revenue reached $4.9 billion, with exports making up nearly 92 percent.

This year, the company targets a revenue of $5.6 billion, with exports expected to account for about 95 percent, or $5.3 billion.

Given the firm's export proportion of over 90 percent, the Vietnamese government allowed SEHC to convert into an export processing enterprise starting from May 2021.

However, it has yet to receive VAT refunds from June 2021 to September 2024.

The company’s leadership has had multiple discussions through meetings with the Ho Chi Minh City Tax Department, the Ministry of Finance, the General Department of Vietnam Customs, and the General Department of Taxation, requesting a resolution for this issue.

However, after three years, the company still has not received any clear guidance or solutions.

Kim Nyoun Ho, chairman of the South Korean Chamber of Commerce, stated that not only Samsung but many other businesses have also reported delays in VAT refunds.

Businesses operating in Vietnam are currently required to pay VAT of 8-10 percent when importing materials. They later provide products to exporters with a VAT rate of zero percent.

However, the delay in VAT refunds is putting local supporting businesses at a disadvantage in price competition with foreign importing companies.

Giang Van Hien, deputy director of the region II tax department, said that the department was aware of the issue and is coordinating with relevant agencies to resolve the problem.

The Ministry of Finance has also issued Decision 422 to urgently review and refund the VAT to SEHC and other companies facing similar difficulties.

On March 14, tax agency leaders met with company representatives to complete necessary procedures.

Hien added that some companies exploited the VAT refund policy to buy and sell invoices for illegal profits. The taxman is working with relevant authorities to handle this issue.

The agency needs to review businesses to determine whether their activities are legitimate or whether they are buying invoices, Hien noted.

Samsung is a leading South Korean conglomerate that established a television manufacturing plant in Ho Chi Minh City in 1995.

Currently, Samsung Vietnam operates six manufacturing plants, one sales entity, and one research and development center with about 84,000 employees.

In 2024, Samsung Vietnam's revenue reached some $62.5 billion, with export value accounting for $54.4 billion, or 14 percent of Vietnam’s total export turnover.

Samsung’s total accumulated investment in Vietnam is estimated at $23.2 billion.

Tuoi Tre News