Unilever Vietnam asked to pay tax arrears
VietNamNet Bridge - The decision by the government's taxation body to force Unilever Vietnam to pay tax arrears without imposing a fine has raised controversy.

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According to the General Department of Taxation (GDT), in 2009-2013, Vietnamese laws did not offer corporate income tax (CIT) incentives to investors who expanded their business in Vietnam. 

Unilever Vietnam violated the laws when it did not declare tax on income it earned from the expanded business.

In principle, when inaccurate tax declarations are discovered, the company has the responsibility of paying tax arrears, and a fine for violations and delays in tax duty fulfillment. 

The decision by the government's taxation body to force Unilever Vietnam to pay tax arrears without imposing a fine has raised controversy.

However, in this case, Unilever asked the taxation body to exempt it from the fine and the proposal was accepted.

Dang Dinh Dao, former head of the Hanoi Economics University’s Institute for Economics and Development Studies, commented that Unilever, like any other enterprise which violates the law, must pay fine as stipulated.

“There must not be any exception,” he said, adding that the taxation body’s decision to excuse Unilever from the fine is "difficult to understand".

“I don’t understand the reasons behind the taxation body’s decision. But I am afraid that the decision would create a precedent in the business environment and an uneven playing field,” he warned.

Phuong Ngoc Thach, chair of the HCM City Association of Science for Economy and Management, commented on Dat Viet that Unilever’s claim for exemption from fine showed it defief Vietnamese laws.

The expert blamed Vietnam’s policies on giving special treatment to foreign invested enterprises (FIEs). Local authorities tend to offer high investment incentives to attract foreign investors to their localities and forgive their wrongdoings.

Thach said that Vietnam had become a ‘paradise’ for foreign investors because they can save billions of dollars in tax.

Many FIEs set up factories in Vietnam just to assemble components and accessories imported from other countries. However, they still ask to treat them as high-technology firms.

The tax refund Formosa Ha Tinh received, for example, was even higher than the tax sum it paid. By the end of May 2015, it had paid VND13.8 trillion in tax, but it had a VND14.6 trillion in tax refund.

Meanwhile, Formosa Ha Tinh was found as the culprit which caused mass fish deaths in a serious catastrophe in the central coast. For this, it had to pay VND11 trillion in compensation.

The Government has been asked to compel the Taiwanese invested firm to compensate losses incurred by locals when it released toxic water into the ocean in April.

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Kim Chi

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