Tax inspections within 5 years for foreign retail businesses
VCN- The Deputy Director General of the General Department of Taxation, Mr. Cao Anh Tuan has just signed a document requesting the Taxation Department of provinces and centrally-run cities to review and inspect foreign retail businesses.
Many foreign retail businesses will be subject to tax inspections within 5 years.
The review and supplementation of the inspection plan must be reported to the General Department of Taxation before 10th May 2017.
Based on tax management information, local Taxation Departments have analyzed and assessed the tax risk to select foreign invested enterprises to declare, settle personal income tax in localities and propose to the inspection plan in 2017 of the Taxation Departments.Accordingly, the General Department of Taxation has required Departments of Taxation to work with the Department of Planning and Investment, and the Department of Industry and Trade to review and identify retail brands in localities and identify owners (100% Vietnam’s capital or foreign-invested enterprises).
According to the contents of the tax inspections, issued together with the above-mentioned official letter, the tax office shall inspect some contents such as corporate income tax, VAT, personal income tax and contractor tax.
The inspection period is 5 years (2012-2016) and will be carried out for years that have not yet been inspected.
In order to collect the right and sufficient budget, avoid losing tax, in fact, the foreign invested businesses have been paid attention by the tax authorities.
In 2015, the General Department of Taxation has inspected information on inspection results at Metro Cash & Carry Vietnam Co., Ltd. Through inspections, after many consecutive years of losses, the General Department of Taxation requested the company to reduce losses and collected a retrospective tax of 507 billion vnd. Including: Adjustment of foreign contractor tax on salary payments paid to Metro Cash & Carry Germany for payment to foreign employees working at Metro Cash & Carry Vietnam Ltd. of 62 billion vnd. Also, it is proposed that the company must adjust the deduction of input VAT on the amount of advertisement, marketing and sales support from suppliers of 110 billion vnd.
Or in mid-2016, Big C Hai Phong and two related businesses were also inspected for the anti-transfer pricing.
According to a recent report of the General Department of Taxation (by November 2016), the Taxation had conducted inspections and audited 329 enterprises with associated transactions. Since then, the Taxation collected, retrieved and fined an amount of more than 607.5 billion vnd; reduce a loss of 5,162.2 billion vnd; reduced a deduction of more than 2 billion vnd and adjusted to increase taxable income of more than 2,121 billion vnd.
In which, through inspections and re-determination of the market price for associated transactions, the authorities have collected 211 billion vnd; reduced a loss of 3,922 billion vnd, adjusted an increase of taxable income of nearly 1,966 billion vnd.
In 2017, the General Department of Taxation will focus on collecting international documents on risk assessment and selection of inspection cases in transfer pricing audits.
At the same time, the Taxation will continue to develop and consolidate the organizational structure of the tax inspections and examination at all levels, especially the inspection units of transfer pricing at some large Tax Departments; inspections at the Taxation Branches, meeting the requirements of the tax inspections and examination.