VietNamNet Bridge – The Ministry of Finance's inspection team has lost in a lawsuit for tax arrears, the judgement required that they return over VND7.17 billion (USD342,000) to a company in HCM City.

On March 11, the People's Court of HCM City started the hearing between Phu Nhuan Service JSC (Maseco) and the inspection team of the Ministry of Finance.

According to the Maseco, it is in the possession of a certificate issued by HCM City People's Committee stating it is entitled to preferential treatment in investment works.

The certificate is in accordance with laws on promotion of domestic investment. As a result, Maseco may legally benefit from preferential corporate income tax rates.

However, on November 19, 2012, the local Tax Department asked Maseco to pay tax arrears for 2011. After the chief accountant and other leaders of Maseco worked with the Tax Department of HCM City, they were asked to work with inspectors from the Ministry of Finance.

As of December 3, 2012, the inspectors concluded that Maseco's declaration of income for tax exemption was incorrect compared to its certification on preferential treatment. Even though Maseco also recorded their disagreement with the conclusion, they still received official documents from the chief inspectorate, saying that it must pay over VND7.17 billion of tax arrears for 2009-2011 period.

The inspectors concluded that Maseco's preferential treatment had expired and so had to pay 25% of the corporate income tax rate instead of the previous 20%.

When Maseco was unable to appeal to the Ministry of Finance, it paid the tax arrears but brought the issue to court, demanding the cancellation of the inspectors' decision and the return of the money.

After reviewing the case, the court accepted the plaintiff's demands. The inspectors' decision to make Maseco pay 25% of corporate income tax was cancelled and VND7.17 billion was returned to the company.

VNN/DTriNews