Investigations launched into tax evasion in HCMC corporate acquisitions

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Ho Chi Minh City tax officials have decided to launch investigations into local food chain Pho24 and hospital business Hoan My Medical Corp, two of several suspects identified by the municipal People's Committee for tax evasion in transfers and acquisitions.

An executive of the city's Taxation Department told news website Saigon Times January 9 that the probes had been going for two weeks now following a report from the committee on tax revenue losses.

The committee had said the suspected firms typically let transfers and acquisitions undergo complicated processes and had caused management difficulties to tax authorities by establishing branches in different localities.

Early last year, the Filippino-owned Jollibee Foods Corp acquired a 50 percent stake worth US$25 million in Pho24 from Viet Thai International JSC, which had bought the food company for $20 million at the end of 2011.

The Singapore-based Chandler Corp announced in June a $99-million investment in Hoan My, acquiring 80 percent of the latter's stake.

Apart from Pho24 and Hoan My, the committee cast suspicion on a number of businesses including chipmaker Intel Corp.

Late last year, Intel's subsidiary Intel Asia Holding Ltd was transferred within the US-based corporation under a $100 million deal. The transfer did not generate a capital gains tax.

But Finance Deputy Minister Do Hoang Anh Tuan told the press January 9 that many of the supposedly "suspicious" firms, including Intel, had in fact not broken any tax laws.

The transfer of Intel Asia Holding Ltd was just part of Intel's restructuring plan, he said.

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