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HCMC tax office seeks inspection into Coca-Cola Vietnam
By Thanh Nien News -
The Ho Chi Minh City Tax Department has requested that the General Department of Taxation inspect transfer pricing activity at Coca-Cola Vietnam, an official has said.
Le Thi Thu Huong, deputy chief of the department, told Tuoi Tre newspaper the department had inspected the company for possible tax evasion, but not for transfer pricing violations.
“This time we have proposed that the General Department of Taxation, the higher tax agency, inspect transfer pricing activities,” she said.
Last October, Coca-Cola Vietnam reported that it started making profits in 2013, ending two decades of consecutive losses that were scrutinized by local tax officers several months earlier.
In a report, the company estimated its profits at US$7 million for 2013, and $16.6 million for 2014.
The report came amid allegations that some foreign invested companies may have tried to avoid taxes by abusing the practice of transfer pricing.
Transfer pricing allows related business partners to determine prices between themselves, without considering market factors. Abuses of the practice are often very difficult to prove, especially when it involves multinational corporations with a complex network of internal buyers and suppliers.