No silver lining for Silver Shores’ hopes

Hoang Viet Cuong, deputy head of the General Department of Customs (GDC), said the department had rejected Silver Shores’ debt moratorium proposal. Silver Shores is the investor behind Crowne Plaza Danang hotel with 585 rooms.

“Pursuant to the Law on Tax Administration, the company would have to implement its tax obligation to the state budget in line with the legal regulations,” said Cuong.

Silver Shores’ tax burden, totaling $1.3 million and related to an import tax for the goods that formed the project’s fixed assets, has built up over the past three years following changes to the tax exemption it was granted in 2006.

The exemption was granted under Decree 149/2005/ND-CP detailing the Law on Import and Export Tax. Circumstances changed when the Ministry of Finance (MoF) released Circular 79/2009/TT-BTC effective from June 2009, which required enterprises to choose among only a few import tax exemption conditions.

In July 2011, the GDC sent Silver Shores an import tax bill amounting to $1.3 million. But, the property developer disputed the bill and sent several documents to the MoF to support its move.

The company has proposed authorities allow it to continue enjoying tax preferences as specified in its investment certificate. It also asked the MoF to permit it to delay the payment until the MoF has a final decision on the case.

However, under Article 48 of the Law on Tax Administration, during the time to address the claim, the taxpayers would still be required to pay enough tax, except the case that the competent state agency decided to delay the tax payment for them.

Regarding the company’s proposal to continue enjoying tax preferences as specified in its investment certificate, Cuong said the GDC was working with other related ministries and agencies and would have an answer for Silver Shores.

Previously, a senior official at the Policy Department under the GDC told VIR that in addition to Silver Shores, there are four or five projects around the country which have been caught in this entanglement. “Therefore, treatment should be consistent for all enterprises,” the GDC official said.

A Silver Shores source said that  the company was gradually paying some parts of its tax duty of $1.3 million, while still pressing its argument for tax preferences. The source said that at a time when foreign investment was trending downward, the state should not issue policies that inspire uncertainty among foreign investors.

The source also claimed that under the Law on Investment 2005, in case where foreign investors were affected by a change in the policies and laws of the country, the Vietnamese government should have a reasonable solution to ensure their legitimate interests.