Vietnam Taxman to Clamp down on Alleged Tax Evading Foreign Firms

Tuan Minh

23:09 20/09/2017

BizLIVE - Vietnam’s tax authority will once again tighten monitoring over companies suspected of evading taxes, with a focus on foreign-invested enterprises having prolonged losses.

Vietnam Taxman to Clamp down on Alleged Tax Evading Foreign Firms

Transfer pricing will again be the target of strict inspection in Vietnam. Photo: Internet

The General Department of Taxation has asked local tax authorities to enhance supervision and inspection of foreign-invested companies and those firms that have continuously posted losses but keep expanding operations.
In addition, foreign companies that run surprise losses after preferences end, and those conducting frequent transactions with affiliates in countries with low taxes will also be subjected to close watch.
“[Agencies] need to pay attention to and inspect companies that transact with affiliates and declare unreasonable losses, especially those operating in the sectors of manufacturing, assembly of electronic components, garment and textile, footwear, processing, metal production, etc.,” the General Department of Taxation noted.
The Vietnamese taxman has shown particular concern over transfer pricing and is striving to fight tax evasion. A large number of foreign transnationals such as Coca-Cola, Pepsi have been targeted as they are expanding presence in the Southeast Asian country despite prolonged losses. However, few cases have been brought to light.