Metro Vietnam fined for tax evasion
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German multinational retailer Metro’s Vietnamese woes continue with a fine of almost US$3 million issued this week for tax evasion.
Metro has for months being trying to offload its trouble Metro Vietnam subsidiary, initially via a sale to Thai business Berlei Jucker which was foiled by a shareholder revolt. A new deal was reached with BJ’s founder Charoen Sirivadhanabhakdi through his TCC Group, but it is not clear the status of that agreement, with Vietnamese authorities impeding the cross border investment.
According to the English edition of the Tuoi Tre (Youth) newspaper in Vietnam, Metro first came under scrutiny over suspicions of transfer pricing back in 2012. Independent investigations cleared the company of wrongdoing. But the General Department of Taxation launched its own investigation and after two months concluded the company had “committed wrongdoings worth VND507 billion ($23.63 million) in a transfer pricing inspection that concluded Monday,” according to Tuoi Tre.
Metro Vietnam has been ordered to pay VND62.64 billion ($2.92 million) in tax arrears, a deputy minister of finance confirmed to Tuoi Tre.
Metro Vietnam opened in 2002, investing US$78 million in opening 19 stores in city centres. But it has reported a profit just once – of $5.41 million in 2010 – and last year decided to exit the market. In 2007 and 2008, it posted losses of $7.32 million and $8.85 million respectively.
Questions & Answers
Q.What is the total amount of the fine Metro Vietnam received for tax evasion?
What is the total amount of the fine Metro Vietnam received for tax evasion?
Metro Vietnam has been fined almost US$3 million this week. This fine follows a finding by the General Department of Taxation that the company committed wrongdoings worth $23.63 million.
Q.What specifically caused Metro Vietnam to come under scrutiny from the tax authorities?
What specifically caused Metro Vietnam to come under scrutiny from the tax authorities?
Metro Vietnam first came under scrutiny due to suspicions of transfer pricing in 2012. The General Department of Taxation’s own investigation concluded wrongdoings in a transfer pricing inspection.
Q.Which company was originally meant to purchase Metro Vietnam before the deal failed?
Which company was originally meant to purchase Metro Vietnam before the deal failed?
Thai business Berlei Jucker was initially trying to acquire Metro Vietnam. However, this sale was ultimately foiled due to a shareholder revolt against the proposed deal.
Q.How many years has Metro Vietnam been operating in the country since its establishment?
How many years has Metro Vietnam been operating in the country since its establishment?
Metro Vietnam opened in 2002. This means the company has been operating for twelve years, as the article mentions events in 2012 and the current fine this week.