On the 16 May 2017 in Hanoi – the European Chamber of Commerce in Vietnam (EuroCham) organised an event that gathered Vietnamese authorities and experts to discuss Vietnam’s new customs and taxation framework and its connection to the entry into force of the EVFTA.
At this event, experts and business leaders exchanged ideas on how to improve the business environment in regards to customs, trade facilitation measures, and tax regime, taking the opportunities of the EVFTA. Specifically, businesses expressed their concerns about customs audit and penalties applicable to administrative inconsistencies in tax declarations.
EuroCham Sector Commitee Chairmans with the Vietnamese authorities
Participating company representatives said that setting the rules to levy taxes and apply penalties to administrative mistakes will worsen the already challenging investment environment in Vietnam and may undermine the trust of foreign businesses, forcing them to reconsider their investments and operations in the Vietnamese market.
Challenges for relevant businesses on legal documents concerning customs values were referred to during the event. For example, the customs authorities’ ability to reject the declared value of a business; or their competence in handling the businesses’ administrative faults in customs declarations. Many businesses have been audited by the Customs authorities, have seen their Customs declarations rejected, and have been applied penalties (in some cases in the tens of billion dong); due to administrative errors found in previous declaration, some from several years ago (1)
Mr. Shivam Misra, Co-chairman of EuroCham's Wine and Spirits Sector Committee
Shivam Misra, Co-chairman of EuroCham’s Wine & Spirits Sector Committee, said: “The European business community is very concerned about the customs framework and its manner of execution. Especially if administrative errors are used to open up valuation methods or impose non-merit based heavy penalties. This undermines the confidence that businesses have in Vietnam and its investment environment. Companies might be forced to reconsider investing and also downsize operations if the environment is not conducive to business operations. We want to cooperate and su