South Korean companies operating in Vietnam are facing increased management burdens due to frequent tax reforms and varying regulations from local governments. Some tax regulations allow only a 15-day preparation period before implementation, prompting calls for at least six months to a year of advance notice for companies to adapt.
On October 21, during the '2026 Tax and Customs Policy Forum,' domestic companies urged the Vietnamese Ministry of Finance to enhance the predictability of tax operations and expedite tax refund processes. They also suggested extending the grace period for companies to adjust to new laws and regulations.
The primary concern for businesses is the uncertainty surrounding tax-related regulations. Some laws provide only a 15-day preparation period before they take effect, making it challenging for companies to adjust internal procedures and comply with new rules.
Lee Mi-yeon, South Korea's ambassador to Vietnam, emphasized that South Korea is the largest foreign investor in Vietnam based on cumulative investment and a key trading partner. Investment from South Korea in Vietnam has reportedly increased by about 160% compared to the previous year. However, she noted that "some South Korean companies are struggling due to unpredictable policy changes and adjustments to corporate tax incentives." She specifically pointed out that "the interpretation and application of tax laws vary by region, making it difficult for companies to operate under consistent standards."
Samsung Electronics has suggested that the scope of tax support should be broadened to support companies' localization efforts. The current preferential policies are concentrated in specific industries such as artificial intelligence (AI) and semiconductors, and there is a need for a more balanced approach to ensure that companies across various sectors can benefit.
The cost burdens faced by the electronics and display manufacturing sectors were also highlighted. With rising international prices for AI semiconductor chips, companies are seeking expanded tax support in advanced technology sectors to enhance their competitiveness.
The Vietnamese government outlined existing support systems for high-tech industries. Le Duc Huy, Deputy Director of the Tax and Fee Policy Department at the Ministry of Finance, stated that several policies are being implemented to promote innovation and digital transformation. He explained that large-scale high-tech projects meeting certain criteria could qualify for a preferential corporate tax rate of 10% for up to 25 years.
There were also calls for uniform enforcement standards for tax laws. Nguyen Thi Quynh, president of the Vietnam Tax Consulting Association, explained that multinational companies are subject to various regulations simultaneously, including value-added tax, corporate tax, personal income tax, customs duties, origin regulations, and investment incentives.
She pointed out that when tax authorities, customs authorities, or local governments provide differing interpretations of the same issue, it becomes difficult for companies to accurately understand their tax obligations. Therefore, it is essential to minimize regional discrepancies in tax law interpretations and establish consistent enforcement standards.
Gu Bon-kyung, head of KOTRA's Southeast Asia and Oceania Regional Headquarters, stated, "While we acknowledge the Vietnamese government's efforts to improve the business environment for foreign investors, tax reductions alone are not sufficient." He emphasized that a transparent and predictable business environment that safely protects companies' technology and investment assets is also a crucial support measure.
The Vietnamese Ministry of Finance has expressed its intention to incorporate the demands of South Korean companies into the policy improvement process. Cao Anh Tuan, Deputy Minister of Finance, acknowledged that "South Korean companies have contributed to Vietnam's economic and social development and fiscal revenue," and pledged to streamline administrative procedures and promptly address companies' requests.
Meanwhile, the Vietnamese government plans to soon revise regulations related to related-party transactions and the global minimum tax. How the consistency in tax operations and sufficient preparation periods requested by South Korean companies will be reflected in actual policies remains a key issue.
* This article has been translated by AI.
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