Coca-Cola Vietnam paid $20 million in taxes in 2014. (Photo: www.wsj.com)
In a letter sent to Ho Chi Minh City’s mayor, the beverage producer said its taxable income was $16.6 million in 2014, a sharp increase from $7 million in 2013, the VnExpress.net newswire reported.
The 100% foreign-invested firm spent $210 million on expansion in the country. It has employed 2,200 workers and created 22,000 indirect jobs in the supply chain in Vietnam.
The Ho Chi Minh City taxation authority in December 2012 affirmed that Coca-Cola Beverages Vietnam reported losses from its establishment in 1994 to 2012 although its revenues grew annually. The firm said it had an accumulative loss of 3.77 trillion dong ($179 million) as of 2012, exceeding its initial investment of 2.95 trillion.
Coca-Cola Vietnam’s prolonged losses raised suspicion that the firm was involved in transfer pricing.
Vietnam’s Planning and Investment Minister Bui Quang Vinh said at a Euromoney-held business forum in Hanoi on September 30 that it could not be concluded that Coca-Cola Vietnam was evading taxes when there was no evidence. “Coca-Cola plans to continue expanding in Vietnam and pledges to make profit,” the minister added.
In October 2012, Coca-Cola Vietnam announced a new investment of $300 million over the next three years in Vietnam, to further capture growth opportunities in one of the world’s major emerging consumer markets.
The stepped-up investment, commencing in 2013, would bring to $500 million the total investment that the company and its bottling partners had committed to Vietnam from 2010 through 2015.