South Korea Wants to Simplify Import Tax Payment Procedures

While appreciating suggestions from South Korean businesses, the General Department of Vietnam Customs gave solutions and plans to simplify and quicken the settlement of administrative procedures concerning import tariffs.

The Ministry of Finance recently collaborated with the South Korean Embassy in Vietnam to organise a dialogue meeting for South Korean businesses on tax and customs policies and administrative procedures.

Deputy Finance Minister Do Hoang Anh Tuan said Vietnam’s export turnover reached US$62 billion in the first six months of 2013, up 16.8 percent over the same period. South Korean businesses contributed 33 percent to export growth. Their taxes paid to the State Budget rose 27 percent. Given their contributions plus many jobs created, the Ministry of Finance holds the responsibility to solve problems and provide the most favourable conditions for businesses in general and South Koreans in particular to operate in Vietnam.

At the meeting, attending companies presented their questions about regulations on used machine import restriction, simplification and quick settlement of administrative procedures concerning import tariffs, VAT on service provision contracts, expansive investment incentives, corporate tax refund, and others.

According to South Korean businesses, the biggest difficulty for South Korean investors in Vietnam is import tax payment. Tax refund duration is usually long, which affects the efficiency of cash flows of enterprises.

The time-consuming cause is attributed to the difference in initially registered consumption rate and actual consumption rate in production process, leading difficulty in matching payment documents. Besides, the registration for change in consumption rates is also not easy. Companies have to wait for tax refund or tax exemption because customs personnel is not enough and the customs software system has a lot of errors. Time is needed to deal with these issues.

Hence, South Korean firms proposed organising training courses on export - import tax refund for customs officers. In addition, when customs authorities receive payment records, they also need to have feedbacks after viewing data to speed up payment procedures.

While appreciating suggestions from South Korean businesses, the General Department of Vietnam Customs gave solutions and plans to simplify and quicken the settlement of administrative procedures concerning import tariffs.

Accordingly, liquidation and tax refund terms are the date on which customs authorities receive adequate liquidation and tax refund request documents. Currently, according to Article 128, Circular 194/2010/TT-BTC on December 6, 2010 of the Ministry of Finance, liquidation and tax refund terms are divided into two categories:

+ Liquidation and issue tax refund or exemption decisions based on the taxpayers’ declarations will be conducted within 15 days after receiving complete tax refund dossiers;

+ Decisions on tax refund or exemption based on taxpayers’ declarations are within 60 days after receiving complete tax refund or exemption dossiers.

To support businesses, the amended Law on Tax Administration, effective on July 1, 2013, shortens the tax refund duration for the respective two cases above to 10 days and 40 days.

The General Department of Vietnam Customs said, according to Article 33, Circular 194/2010/TT-BTC, use norms must be notified to customs offices before carrying out customs procedures for the export of the first goods lot of product codes listed in the norm registration document. In fact, accurate loss rate can only be determined when exporting businesses start to recalculate. Therefore, in case declaration documents reach liquidation term but norms data are not matched with customs agencies, the General Department of Vietnam Customs instructs as follows: Taxpayers send written explanations for loss rate changes to customs units where they work with; the customs units shall inspect liquidation records, accounting books, accounting records, inventory records, warehousing data to determine the truthfulness and accuracy declared by enterprises. Based on test results, customs authorities will consider liquidity for enterprises.

The General Department of Vietnam Customs added that the draft circular amending and supplementing Circular 194/2010/TT-BTC has changed the time for norms notification. For export goods, the time for norms notification is the time of submitting finalised material use reports (the time of submitting tax refund and exemption documents). For export processing enterprises, the time for norms notification is the time of reporting on existing imports and exports (quarterly). Thus, when this circular is enacted, many problems raised by the enterprises will be removed.

Hien Thinh