return icon Vietnamnet.vn

Bosses flee Vietnam, ignoring debts and taxes

 VietNamNet Bridge – The bad news about tax evasion and debt repudiation cases by foreign invested companies has darkened Vietnam’s foreign direct investment (FDI) landscape.

VietNamNet Bridge – The bad news about tax evasion and debt repudiation cases by foreign invested companies has darkened Vietnam’s foreign direct investment (FDI) landscape.



{keywords}

People try to unlock the door to enter the Phuoc Son Company’s office to ask for debt payments.

 

 

Tuoi Tre newspaper has reported that Austrian Harald Biebl, director of the HCM City-based Bach Hop Company, operational in Vietnam since 2005, has fled the country.

The Vietnamese partner of the company has also “vanished” since July, leaving unpaid social insurance premiums of VND586 million and VND310 million, equal to the combined June salary of hundreds of workers.

Bach Hop is not alone. Vietnam has to pay a heavy price for welcoming disreputable foreign investors. Many have left Vietnam quietly after making big money in Vietnam.

Only when local newspapers reported that the Quang Nam provincial Taxation Agency was demanding that the Phuoc Son and Bong Mieu Gold Mining Companies, both belonging to the Australian Besra Group, pay its tax arrears did people realize that the Australian gold miner had collected 7 tons of gold in Vietnam, but had refused to pay tax.

A report from the taxation agency showed that the two companies now owe VND297 billion in tax, while nine Vietnamese businesses have asked for the taxation agency’s intervention to force Besra to pay for products and services they provided to Besra in the past.

Metro Cash & Carry, a German retailer, repeatedly reported losses, and has not paid any dong in corporate income tax over the last 12 years of operation in Vietnam. Metro was recently sold to the BJC Group from Thailand for 655 million euros.

A report of the General Department of Taxation (GDT) showed that 720 out of 870 FIEs inspected by GDT in 2013 were found as evading tax or reporting losses to avoid tax, worth trillions of dong.

Also, according to the taxation body, FIEs declared a huge loss of VND68 trillion in 2013. Dr. Bui Ngoc Son from the Politics Research Institute said this has raised doubts that FIEs had conducted transfer pricing to evade tax.

Son commented that there are many reasons for Vietnam to think FIEs have conducted transfer pricing. Most of the FIEs repeatedly reporting losses have been steadily expanding their business in Vietnam.

The legal loopholes, plus mismanagement, both have helped the foreign companies to conduct transfer pricing.

A report submitted by the Dong Nai provincial Industrial Zone Board of Management to the Ministry of Planning and Investment showed that from 1995 to 2013, Nestle Vietnam took losses for 18 years and made profits for four years, with the total loss of up to $30.8 million, equal to 20 percent of the stockholder equity.

Coca-Cola, the giant soft drink manufacturer, has also reported a huge gross loss of $180 million over the last decade. Meanwhile, despite the big loss, it still plans to pour another $300 million into an expansion project in Vietnam.

Pham Chi Lan, a renowned economist, said it is now the right time for Vietnam to tighten control over FDI and FIEs, because even though Vietnam has offered many investment incentives to attract investors, it has been repaid with blows.

Dat Viet

MORE NEWS

Vietnamese athletes to receive 1 mln USD for Paris Olympic gold

Vietnamese athletes competing in the Paris 2024 Summer Olympics, scheduled for July 26 to August 11, 2024, will receive 1 million USD in bonus for each gold medal; 500,000 USD for silver and 200,000 for bronze.

VIETNAM NEWS HEADLINES FEBRUARY 1/2023

Party chief’s book on corruption fight to make debut

Google Doodle honours first female Vietnamese newspaper editor Suong Nguyet Anh

The world’s most popular search engine Google has paid tribute to Suong Nguyet Anh, the first female editor of the nation’s first women’s newspaper by posting a drawing of her on its homepage on February 1.

Banh Cuon among world top 10 dishes visitors should try in 2023

Australian travel magazine Traveller has listed Banh Cuon, Vietnamese steamed rice rolls, among the top 10 best meals from around the world that visitors should try in 2023.

Party chief directs key tasks for new year

Party Secretary Nguyen Phu Trong on Tuesday chaired a meeting of the Secretariat of the Communist Party of Vietnam (CPV) Central Committee, mapping out key tasks for the new year.

VIETNAM BUSINESS NEWS FEBRUARY 1/2023

Domestic market to drive tourism recovery in 2023: insider

Some big companies made profits in 2022, but others incurred losses

While Duc Giang Chemicals and Binh Son Refining and Petrochemical have reported big profits for Q4 and the year 2022, Vietnam Airlines and leading steel manufacturer Hoa Phat saw big losses for the year.

Vietnamese couple help German bicyclist in distress

Trung and Nhung, a Vietnamese couple, on the way to travel across Vietnam on Tet holiday, saw a foreigner who was facing troubles because of strong winds in Ninh Thuan.

Vietnam develops green agriculture to increase exports to EU

Vietnam is paying attention to mobilising resources to invest in developing green agriculture with an aim to raising the market share of its agricultural exports to the European Union.

Vietnamese team comes first at Southeast Asian Fencing Championship

Vietnam secured the first position at the 2023 Southeast Asian Fencing Championship which has taken place recently in Malaysia.

2023 - Time for Edtech to thrive in Vietnam

Experts are positive about the development of Vietnam’s education technology (Edtech) market in 2023 if local Edtech companies can overcome post-pandemic challenges.

UK imports from Vietnam in 2022 put at over US$6 billion

United Kingdom (UK) imports from Vietnam amounted to US$6.06 billion last year, rising by 5.2% over 2021, according to the General Department of Vietnam Customs.

Five more registration officials in Hanoi prosecuted for soliciting bribes

Police of Hanoi’s Thuong Tin District has started legal proceedings against five officials at 2915D Registration Centre for taking bribes.

Thai Thi Lien, Vietnam's matriarch pianist and pedagogue, passes away

Thai Thi Lien, one of the founders of Vietnam's National Academy of Music, passed away on Tuesday peacefully at her home at the age of 106, her son Tran Thanh Binh said.

VN striker Tien Linh vies for Asia’s Best Footballer Award 2022

Vietnamese striker Nguyen Tien Linh has been listed among the 25 nominees for the Best Footballer in Asia 2022 award organized by Titan Sports of China.
back_to_top