Vietnam real estate firms want 'unfair' tax policy scrapped

By Hong Suong - Nguyen Nga, Thanh Nien News

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Apartment buildings in Ho Chi Minh City. Photo: Diep Duc Minh/Thanh Nien Apartment buildings in Ho Chi Minh City. Photo: Diep Duc Minh/Thanh Nien


Now that they are again making profits following the recovery in the market, many real estate companies are calling for the scrapping of a tax provision they describe as "unfair" and "discriminating."
They are unhappy about the rule that prohibits them from offsetting losses in other businesses against profits in their real estate business. This restriction applies only to the property business.
Since many real estate businesses operate in other sectors such as retail and transport, the rule has caused them much “disadvantage" over the years, Nguyen Van Duc, deputy director of Ho Chi Minh City-based real estate company Dat Lanh, told Thanh Nien.
Economist Dinh The Hien urged the government to scrap the rule, which was enacted in 2004 to prevent real estate companies, who were then making humongous profits, from paying less taxes.
They were also prohibited from offsetting real estate losses against profits from other businesses, but this provision was rescinded two years ago.
It is time for the remaining provision to go too since competition is harsh in the property sector and very few businesses make huge profits like before, Hien said.
Nguyen Tran Nam, chairman of the Vietnam National Real Estate Association, said it is "unfair and unreasonable" that only property companies are bound by such a rule while others can freely offset profits from other businesses.
With the strong market recovery, 55 listed real estate businesses posted combined revenues of nearly VND61.75 trillion ($2.73 billion) last year, up 25 percent from 2014, according to news website Vietstock.
Their net profits grew 12 percent to around VND6.79 trillion ($300.2 million) with conglomerate Vingroup, FLC Group and Hoang Quan being the biggest earners.


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