PepsiCo fights to retain privileges

July 12, 2016 | 14:27

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Suntory Pepsico Vietnam Beverage has not stopped fighting to retain tax incentives for their factory in Can Tho City, despite several failed efforts in the past.

photo source: internet

On June 13, the company (PepsiCo) sent a document to the Prime Minister requesting a meeting with relevant authorities to the dispute. Prime Minister last week directed the Ministry of Finance to come up with an answer to PepsiCo’s request.

Since 2014, SPVB have been decrying the inconsistencies in tax incentives granted to its Can Tho plant during different periods. Several proposals and requests were submitted to seek for explanation from the government’s authorised bodies.

In 2008, the $30 million project in Can Tho City received an investment certificate from Can Tho Export Processing and Industrial Zones Management Authority.

The new plant was considered “a new investment project” and was therefore entitled to a preferential CIT rate of 15 per cent for 12 years, three-year tax exemption, and a 50 per cent reduction over the next seven years.

However, in 2014 the General Department of Taxation (GDT) after an investigation ruled that the plant was in fact an “expanded investment project,” and cut down on its privileges, issuing only three years of CIT exemption and a 50 per cent CIT reduction in the five (not seven) following years.

Then in 2015, GDT sent PepsiCo the tax bill of VND24.3 billion ($1.1 million), including VND18.04 billion ($823,744) in tax arrears and VND6.26 billion ($285,844) in late payment fees and administrative violations [declaring the wrong tax liability].

PepsiCo’s situation is not unique amongst foreign enterprises, as Piaggio Vietnam and Yamaha Motors have undergone similar battles.

By By Thanh Xuan

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