Intel factory cleared of tax evasion

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Suspicion of tax evasion by Intel was raised after the Ho Chi Minh City People’s Committee discovered that Intel Asia Holding was sold to another subsidiary of the same group for $100 million, equal to the cost price.

As the capital transfer deal did not generate profits, the transfer did not involve the payment of corporate income tax.

Deputy Minister of Finance Do Hoang Anh Tuan said the ministry did not see any violation of tax policy for this firm. “The transfer was made solely to restructure its operations and to enhance the business efficiency of the corporation,” said Tuan

Intel Vietnam’s holding company in the US established a firm in the Netherlands, and then the Dutch enterprise founded Intel Hong Kong. The Hong Kong company later opened Intel Vietnam.

When its affiliate in Vietnam is sufficiently strong, it will belong entirely to the Dutch owner. In other words, the transfer was designed to change the ownership of Intel Vietnam.

“I think it is a positive trend because it raises the position of Intel Vietnam in correspondence with the speed of its growth. Moreover, before completing the transfer, the corporation consulted the city’s People’s Committee vice chairman Le Manh Ha and asked for opinions from the hi-tech park’s management board,” Tuan added.

Besides Intel, other big corporations have also been added to a black list of firms that have been suspected of avoiding corporate income tax when buying shares in other companies, namely Pho 24 and PT Global Investment.

Tuan also said the remaining cases on the list would be investigated to clarify the information.

In 2006, Intel came to Vietnam with an initial investment capital of $1 billion which it poured into its seventh production base worldwide. At that time, the presence of Intel in Vietnam was hailed as one of Vietnam’s great achievements and a reward for its efforts to attract foreign direct investment.