Samsung requests tax exemption for recalled Galaxy Note 7 devices

October 06, 2016 | 13:30

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South Korean tech giant Samsung has requested Vietnam for exemption from export-import and value added taxes for the faulty Galaxy Note 7 smart phones, which are currently being recalled around the global, according to newswire Vneconomy.vn.

Vietnam-based Samsung Electronics Vietnam Thai Nguyen (SEVT) is one of facilities producing the faulty devices.

In a recent document submitted to the General Department of Vietnam Customs, SEVT said under the global recall and exchange scheme announced in early September, SEVT’s domestic branches and distributors will recall smart phones from end-users and then ship them to SEVT. The company will then send back new mobile phones with new IMEIs (International Mobile Equipment Identities) and serial numbers to customers.

According to SEVT, the reason for requesting the exemption is that the recalling and exchanging processes are considered under the brackets ‘temporary importing for re-export’ and ‘temporary export for re-import’, which currently do not incur taxes.

Earlier on September 2, the company suspended sales of the oversized products and recalled 2.5 million Note 7 devices that had been shipped worldwide after faulty batteries caused the phones to explode while charging.

Note 7 products were launched in Vietnam on August 19. According to domestic distributors’ statistics, over 10,000 Note 7 smart phones have been shipped to customers.

The recall has piled increasing pressure on the company, as the Federal Aviation Administration has officially banned passengers from turning on Note 7 devices on flights, while according to the regulation, passengers are recommended to put their mobile phones airplane mode on flights only.

Besides, Samsung has to suffer a serious damage for recalling 2.5 million Note 7 devices. Although the company would not reveal an exact figure, the cost likely stands at around $1 billion, based on Bloomberg’s estimates-a huge sum, especially, when only around 35 of the handsets (less than 0.1 per cent of the total volume sold) have been found faulty.

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