Heineken Vietnam pays $39.7 mln in back taxes and fines
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Heineken Vietnam Brewery has paid VND917.2 billion ($39.7 million) in back taxes and fines for a 2018 transaction.
Singapore-based Heineken Asia Pacific Pte. Ltd. had, at the end of 2018, struck a deal valued at over VND4.8 trillion ($207.7 million) with the Heineken Vietnam Brewery. Under the deal, the Singaporean firm transferred its entire stake in its Vietnamese subsidiary to the latter.
The tax payable on the deal was VND823 billion ($35.6 million), but Heineken Asia Pacific claimed it was exempt from paying it under the double taxation agreement signed by the governments of Vietnam and Singapore.
However, the General Department of Taxation ruled that the tax had to be paid because the real estate value in the deal was over 50 percent of the assets involved in the deal.
The department confirmed that it has received in full the payment of back taxes and fines.
Another major FDI corporation, Coca-Cola Vietnam, has been ordered to pay VND821.4 billion ($35.4 million) in back taxes and penalties stretching back over nine years.
The company, which has been suspected of engaging in transfer pricing fraud to evade taxes, has paid VND471 billion ($20.4 million), or 57.3 percent of the amount, at the time of writing.
Vietnam collected VND18.8 trillion ($813 million) last year in back taxes and fines, according to the General Department of Taxation.
Questions & Answers
Q.What was the reason Heineken Asia Pacific initially claimed it was exempt from paying this tax?
What was the reason Heineken Asia Pacific initially claimed it was exempt from paying this tax?
Heineken Asia Pacific claimed an exemption under the double taxation agreement between the governments of Vietnam and Singapore. It believed this agreement meant it did not have to pay the tax on the transaction.
Q.Why did the General Department of Taxation rule that Heineken had to pay the tax despite the double taxation agreement?
Why did the General Department of Taxation rule that Heineken had to pay the tax despite the double taxation agreement?
The General Department of Taxation ruled the tax was payable because real estate value in the deal exceeded 50 percent of the total assets. This specific condition invalidated Heineken's claim for exemption under the agreement.
Q.Has Coca-Cola Vietnam paid all of the back taxes and penalties it was ordered to pay?
Has Coca-Cola Vietnam paid all of the back taxes and penalties it was ordered to pay?
No, Coca-Cola Vietnam has not yet paid the full amount. It was ordered to pay VND821.4 billion, but has currently paid VND471 billion, which is 57.3 percent of the total.