Vietnam customs defend $11.5mn tax, fine on S.Korea’s Posco VST over steel imports

Speaking to Tuoi Tre (Youth) newspaper, the Department of Vietnam Customs said that during a post-clearance audit, it found the company had failed to report a change in use for more than 28,277 tonnes of hot-rolled stainless steel. 

The steel was originally imported without duty for export production but was later sold domestically between January 2020 and August 2023.

Authorities said the failure to declare this shift in purpose violated tax-exemption regulations. 

The company issued value-added tax invoices to local buyers from January 2020 to July 2023 without notifying customs.

As a result, customs officers imposed VND132.6 billion ($5 million) in back taxes and VND117 billion ($4.4 million) in administrative fines.

In comments to reporters earlier the same day, Posco VST denied any attempt at tax evasion, stating it had fulfilled its tax obligations. 

However, it admitted to failing to declare the change in use promptly. 

The company, based in Dong Nai Province, southern Vietnam, said it had already paid VND65 billion ($2.5 million) in taxes via the Dong Nai Tax Department, but that amount was not acknowledged in the customs ruling.

Company legal representative Bui Quang Hung said the firm had followed procedures but made an error by submitting the declaration after the goods were sold. 

He said the ruling caused the company a financial loss of VND304 billion.

Posco VST has filed a second complaint seeking to overturn the customs decision, reduce the administrative penalty to VND11 billion ($417,300), which it says better aligns with legal regulations, and recover the VND65 billion it already paid.

Customs officials confirmed the case is under review and have requested additional documentation related to 29 import declarations.

Founded in 1991, Posco VST is one of the first foreign direct investment enterprises in Vietnam. 

The company is 95.65 percent owned by South Korea’s Posco Group and operates a cold-rolled steel plant in the Nhon Trach 1 Industrial Zone in Dong Nai Province.