Coca-Cola Vietnam fined for tax evasion

1 min readUpdated May 26, 2025Jan 14, 202011:00 PM

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Coca-Cola Vietnam has been ordered to pay VND821.4 billion ($35.4 million) in back taxes and penalties stretching back over nine years.

Dang Ngoc Minh, deputy head of the General Department of Taxation, said 57.3 percent of the amount is the back tax, 35.2 percent is a penalty for delayed payment and the remaining 7.5 percent is a penalty for incorrect filing.

“The company can request a review or file a lawsuit.”

A Coca-Cola spokesperson said tax authorities had recently concluded an investigation of the 2007-15 business period, and found the company had made “minor errors” in describing its business operations which had led to a failure to file for taxes.

Though it disagrees with some of the tax authorities’ conclusions, the company would nevertheless comply with the laws, he said.

But an official from the Ho Chi Minh City Tax Department said Coca-Cola has only paid VND38.2 billion ($1.6 million) as of Thursday.

Coca-Cola entered Vietnam in 1994, and broke even only in 2013 despite double-digit revenue growth, according to the department.

Since the company reported accumulated losses of VND3.77 trillion ($162.5 million) as of 2011, it was exempt from corporate income tax.

HCMC has named Coca-Cola among businesses it suspects of transfer pricing fraud to evade tax.

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What this means

Coca-Cola Vietnam's substantial tax evasion penalty shows increasing regulatory scrutiny across Asia, particularly regarding long-standing multinational operations. While Coca-Cola asserts 'minor errors', the Ho Chi Minh City Tax Department's suspicion of transfer pricing fraud indicates a more serious challenge. The initial payment of only VND38.2 billion ($1.6 million) against a VND821.4 billion ($35.4 million) order pressures the company to demonstrate full compliance swiftly. This situation could prompt other governments to review tax exemptions granted to foreign investors, much like Panpuri's strategic market expansion in China and Japan, where regulatory landscapes are similarly complex. The critical next step is observing full payment of the outstanding VND783.2 billion ($33.8 million).

Maria Santos · Retail News Asia newsroom

Questions & Answers

How much of the total amount Coca-Cola Vietnam was ordered to pay relates to actual unpaid tax?

Of the VND821.4 billion total, 57.3 percent is for back tax. The remaining amounts cover a penalty for delayed payment and a penalty for incorrect filing, making up 35.2 percent and 7.5 percent respectively.

What is Coca-Cola Vietnam's stance on the tax authorities' findings regarding their business operations?

Coca-Cola states they made "minor errors" in describing business operations, leading to tax filing failures. They disagree with some conclusions but confirm they will comply with the laws, despite only a partial payment so far.

Why was Coca-Cola Vietnam previously exempt from corporate income tax?

The company reported accumulated losses of VND3.77 trillion ($162.5 million) as of 2011. Due to these significant losses, Coca-Cola Vietnam was exempt from corporate income tax.

For what period did the tax authorities conduct their investigation into Coca-Cola Vietnam's tax affairs?

The tax authorities concluded an investigation that specifically covered Coca-Cola Vietnam's business period from 2007 to 2015. This nine-year period is when the back taxes and penalties accumulated.

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