VietNamNet Bridge – A lot of businesses have unexpectedly received a demand to pay tax arrears worth of up to billions of dong. The businesses complain that they are the victims of the unclear legal documents.

The Binh Minh Plastics JSC has been asked to pay VND117.11 billion to the HCM City Taxation Agency. The amount includes the VND74.98 billion in tax arrears and VND42.13 billion in fine for administrative violation.

Nguyen Thi Kim Yen, a member of the Board of Directors and Deputy General Director of the company, complained that her enterprise has suffered from the “jumble of unclear legal documents.”

“It’s not our fault. This should be blamed on the differences in the legal documents which regulate the corporate income tax incentives and the tax on the enterprises which list their shares on the bourse for the first time,” Yen said.

Binh Minh has lodged a complaint to the Ministry of Finance, General Department of Taxation, the HCM City Taxation Agency and the State Capital Investment Corporation (SCIC). However, no reply has been made.

A lot of other companies are facing the same situation. Viglacera Tu Son Company has been asked to pay fine and the 2010 corporate income tax arrears worth VND3 billion

The Chuong Duong Drink Company in early September received a demand to pay the tax arrears of VND6.9 billion and the fine ticket of VND3.27 billion.

The problem is that only in 2009 and 2010 did the company register to enjoy the 50 percent corporate income tax reduction for its share listing in 2006. Meanwhile, in 2007 and 2008, the company registered to enjoy the tax reduction as an equitized enterprise.

In March 2013, HMC was asked to pay VND2.5 million worth of VAT arrears and VND6.91 billion in corporate income tax arrears. The General Department of Taxation did reject its claim for the 50 percent corporate income tax reduction for the reason similar to Binh Minh’s.

The enterprise did not registered to enjoy the tax incentives applied to the companies listing shares on the bourse for the first time prior to 2009. However, the regulations were only promulgated in 2011.

Not only Vietnamese enterprises, Eastspring Investments, a foreign investment fund, has also been demanded to pay the tax of VND1.7 billion for the 2010 and 2011 fiscal years.

Most recently, the seven petroleum enterprises have received a document from the customs agency which asked to pay the tax arrears of VND350 billion. Of the seven enterprises, Petrolimex, which holds 60 percent of the domestic market share, has to pay VND170 billion.

However, the enterprises all have claimed innocent. The problem lies in the inconsistency in the legal documents – the dispatch No. 17060 dated December 7, 2012 by the Ministry of Finance and the Circular No. 194 which took effects on January 20, 2011.

The Ministry of Justice has officially requested the Ministry of Finance to annul the Circular No. 17060, saying that there is no legal foundation to collect tax arrears from petroleum enterprises. However, the finance ministry still decided to force the enterprises to pay tax.

It seems that the taxation body has been trying every way to collect tax to offset the budget shortfall.

US$1 = VND21,000

Kim Chi