The Government Inspectorate said management agencies are failing to define databases and information about transfer pricing of foreign-invested enterprises in Vietnam.
Transfer pricing still out of control in Vietnam
Although the Ministry of Finance issued several circulars aimed at preventing transfer pricing, the Government Inspectorate has said they have brought limited results due to the failure to define transfer pricing information of foreign-invested companies through their parent companies in foreign countries.
In addition, the government admitted that the cooperation between tax and customs agencies remains lax, which is among causes for current difficulties on the issue.
In 2013, the Government Inspectorate inspected 399 enterprises at export processing zones in Hanoi, HCM City, Binh Duong Province and Dong Nai Province. According to the inspection, over the last three years, the Hanoi Customs Department did not inspect any enterprises at local export processing zones. Also, in 2009, Dong Nai Province’s Taxation Agency did not inspect any companies.It is suspected that up to USD4.15 million of arrears are owed by 399 enterprises in export processing zones in the four localities, however, until now, just VND5.47 billion (USD261,900) has been collected.
Many Japanese firms have reported losses for three consecutive years, including Sumitomo Bakelite Vietnam, Meiko Electronics Vietnam Ltd. Co. and Toshiba Asia Pacific Pte. Ltd.
The Government Inspectorate has proposed that the government instruct the Ministry of Finance to cooperate with management agencies to revise policies for detecting and dealing with transfer pricing among foreign-invested companies.
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