Clearing obstacles to tax refunds for businesses

Recently, several South Korean enterprises operating in Dong Nai Province have encountered difficulties related to policies handling on-the-spot import-export (E/I) and tax refunds associated with this form of trade.

Leather shoe production at Changshin Vietnam Co., Ltd., Thanh Phu Industrial Park, Tan Trieu Ward, Dong Nai Province. Photo: Ngoc Lien

Some Korean companies reported that the prolonged tax refund process and the requirement to return previously refunded tax amounts have disrupted their production and business activities, particularly by constraining capital turnover for manufacturing operations.

Enterprises facing difficulties

South Korea is currently the largest foreign investor in Dong Nai Province. Korean businesses began investing in the province in the 1990s when Dong Nai first opened its doors to foreign investment. After more than 30 years of operations, many Korean companies have continued to expand, increasing capital and investing in modern machinery, equipment, and technology. Major investors include Hyosung Group, Changshin Vietnam Co., Ltd., and Taekwang Vina Industrial JSC, among others.

Kim Young Whan, Chief Representative of the KOCHAM Dong Nai (Korean Business Association in Dong Nai), stated that some Korean companies have recently encountered issues related to in-place E/I activities and tax refunds. According to business feedback, tax refund payments have been delayed, with some enterprises first receiving approval notices and later receiving notifications of denial or even being subjected to tax audits.

Kim Young Whan explained that Korean enterprises are experiencing financial strain and have made several proposals to provincial authorities. Following policy changes on in-place E/I in 2025, some companies have been classified as high-risk and are seeking timely guidance and resolution.

Park Kang Yeon, also a representative of KOCHAM Dong Nai, added that several Korean businesses applying for value-added tax (VAT) refunds related to in-place E/I have not yet received final settlements. Many companies that had received refunds were subsequently required to return the refunded amounts and were warned of penalties for delayed repayment. These developments have created significant challenges for businesses attempting to maintain stable operations and reinvest their working capital.

Dong Nai currently attracts investment from 51 countries and territories, with more than 2,200 projects totaling 42.36 billion USD  in registered capital. Of these, 458 projects belong to South Korean investors, totaling over 8.1 billion USD, ranking first in both project numbers and total investment. Korean firms primarily operate in the footwear, textiles, wood products, and electronic components sectors.

Reviewing and addressing taxpayer difficulties

Deputy Head of the Dong Nai Tax Department, Dau Duc Anh, stated: In the first ten months of 2025, the department processed 2,200 tax refund applications worth approximately 15.7 trillion VND. Among them, over 450 applications came from Korean businesses, totaling 3.5 trillion VND, accounting for 22.5% of the province’s total refunds during this period.

However, during the implementation of tax policies, obstacles have arisen in the tax refund process for certain enterprises, including Korean firms. According to Dau Duc Anh, Deputy Head of the Dong Nai Tax Department, based on feedback from businesses, the Dong Nai Tax Department and the Dong Nai Customs Department have coordinated efforts, reported the situation, and advised the Provincial People’s Committee to propose adjustment measures to the Ministry of Finance.

Dau Duc Anh emphasized that the tax authority is responsible for inspection, not investigation, of tax matters. Korean enterprises in Dong Nai have been supported through a refund-first, audit-later mechanism to ensure cash flow. However, post-refund inspections have revealed issues related to in-place import-export (E/I) policies. The tax department is compiling the findings and will report them to the Ministry of Finance, along with proposals for any necessary adjustments. He acknowledged the cooperation of Korean businesses with local tax authorities in the process of developing tax-related policies. The tax authority, he said, welcomes and reviews feedback from businesses. Matters within its jurisdiction will be addressed, while those beyond its authority will be reported to the Ministry of Finance.

Production line at Changshin Vietnam Co., Ltd. - Illustration

Deputy Secretary of the Provincial Party Committee and Chairman of the Dong Nai People’s Committee, Vo Tan Duc, noted that Korean investment projects currently provide jobs for more than 171,000 workers in Dong Nai and neighboring areas, including nearly 2,000 foreign employees.

According to Chairman Vo Tan Duc, Korean enterprises have generally operated efficiently and in full compliance with Vietnamese laws on investment, environment, construction, and labor. Their contributions have significantly bolstered Dong Nai’s socio-economic development, reinforcing confidence not only within the province but also across Vietnam in Korean technology, product quality, and management expertise. The Chairman expressed hope that Korean investors will continue to strengthen connections and expand cooperation between Dong Nai and Korean partners and enterprises in the near future.

By Ngoc Lien - Translated by Quynh Nhu, Minho