Adidas Vietnam under the tax authorities’ microscope
VietNamNet Bridge – The General Department of Taxation has asked the HCM City tax office to review the relations between Adidas Vietnam and a number of companies in the global system of Adidas to determine the costs that this firm declared for tax calculation.


The inauguration of Adidas Vietnam's 50th store in HCM City in late 2011.
Photo: Saigon Times.


This request was made after the Ho Chi Minh City Tax Department consulted the General Department on the tax policy for Adidas Vietnam.

Based on the report of the Ho Chi Minh City Tax Department and the current regulations, the General Department of Taxation said that the transaction between Adidas Vietnam and a number of companies in the global system of Adidas may be linked transactions (transactions between the parties that have mutual operating, control or capital contribution and investment operations).

Not having sufficient evidence to make a conclusion, the General Department of Taxation asked the Ho Chi Minh City Tax Department to check the relations and commercial contracts between Adidas Vietnam and other companies in the global system of Adidas, as well as with retailers. These companies include Adidas AG (parent company), Adidas Singapore, Adidas International Trading BV...

Under the current regulations, the determination of the relations between Adidas Vietnam and the above-mentioned businesses will be a major influence on the determination of taxable income and expenses of Adidas Vietnam.

Adidas came to Vietnam before 2008 and by the end of 2011, it opened a total of 50 stores in major cities.

According to Adidas Group's annual report 2011, Adidas Vietnam has VND23.7 billion ($1.2 million) of chartered capital and it is wholly owned by Adidas International BV (based in Amsterdam, the Netherlands). Adidas International BV also owns 100% of the charter capital of the Adidas International Trading BV.

Meanwhile, Adidas Singapore is under the direct management of the parent company (Adidas AG).

In the January-September period of 2012, Adidas globally earned more than Eur3 billion of profit, up 7.6% over the same period.

Translated by S. Tung
From VNE
Vietnam, Adidas, tax, FDI, price transfer
 
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