Anti-transfer pricing: Harmonize anti- revenue loss target with investment attraction

VCN - Among recommendations sent to the Ministry of Finance, most voters nationwide have paid attention to inspection, examination and anti-State revenue loss and proposed to issue efficient solutions.
Replacement of Decree 20/2017/ND-CP comprehensively removes difficulties inanti-transfer pricing Replacement of Decree 20/2017/ND-CP comprehensively removes difficulties inanti-transfer pricing
Regulations on anti-transfer pricing to be revised Regulations on anti-transfer pricing to be revised
Efforts against revenue loss and transfer pricing Efforts against revenue loss and transfer pricing
2415-3246-7-3357nik1812-3
Currently, the annual tax inspection and examination plan of the tax agency is done according to the method of risk management. Photo: Thuy Linh


Anti-transfer pricing enhanced

Responding to voters’ proposals on clarifying the effectiveness of the inspection and examination of transfer prices, the Ministry of Finance confirmed that this task achieved remarkable results.

In 2018, the tax sector inspected and examined 758 enterprises with affiliated transactions;recorded tax arrears, tax refunds and fines of more than VND1,908 billion; reduced losses by more than VND8,558 billion; reduced tax abatement of VND51.88 billion and revised up taxable income of more than VND10,838 billion.

In 2019, the tax sector inspected and examined 818 enterprises with associated transactions; recorded tax arrears, tax refunds and fines of more than VND2,547 billion; reduced losses of more than VND7,818 billion and reduced a tax abatement of more than VND106.34 billion and revised uptaxable income of more than VND7,599 billion.

According to the Ministry of Finance, in the first nine months of 2020, the revenue management agencies strengthened tax inspection, examination and budget collection, thereby detecting and promptly handling violations.

In which, the tax agency conducted about 48,980 inspections at enterprises’ offices and inspected about 436,100 tax declaration dossiers of enterprises and proposed to contributed revenue to the State budget and reduced a loss of nearly VND39.68 trillion, of which VND13.27 trillion VND was contributed to the State budget (the collected amount was VND6,664 billion); and VND20.29 trillion of outstanding tax debts from the previous year was collected.

Strengthening the inspection and examination of associated transactions has created a strong effect and the number of foreign-invested enterprises declaring losses has decreased significantly.

To improve the mechanism and policy on transfer pricing management, the Ministry of Finance has submitted to the Government to submit to the National Assembly for promulgation of the Law on Tax Administration No. 38/2019 / QH14, effective from July 1, 2020. Accordingly, the Ministry of Finance completed and submitted to the Government for promulgation a Decree on tax administration for enterprises with associated transactions to replace Decree No. 20/2017 / ND-CP.

In the near future,according to the aforementioned legal documents, the Ministry of Finance will continue to promote inspection and examination of transfer pricing, focusing on groups with many member enterprises; industries with significant tax risks due to the transfer pricing behavior of associates and enterprises that have been restructuring and are at risk of taking advantage of transfer pricing for tax avoidance.

In addition, the Ministry will also focus on inspecting and examining enterprises with large proportions of associated transactions; enterprises trading with countries that have low corporate income tax rates and do not collect corporate income tax and enterprises that have big debts with foreign associates

Risk-based inspection

Voters in some provinces propose to the Government to inspect, examine and handle enterprises that violate regulations on anti-transfer pricing in production and business activities.

According to the Ministry of Finance, in the trend of integration and modernization of the global economy, with differences in tax rates and tax incentives among countries, the problem of transfer pricing and tax avoidance does not just happen in Vietnam but also in many countries around the world, including developed countries.

Multinational corporations and domestic private economic groups have increasingly complex and more sophisticated activities and take measures to arrange transactions to transfer prices and avoid taxes, transfer profits and maximize their interests. These are common difficulties and challenges for tax agencies in all countries, including Vietnam.

The problem posed in tax administration is to ensure the implementation of the target of anti-tax loss; prevent transfer pricing for tax avoidance;prevent transfer - profit, protect tax bases as well as the right to tax assessment while attracting foreign investment capital, ensuring competitiveness and fairness between domestic and foreign enterprises.

To solve this problem, the Ministry of Finance has synchronously carried out measures for tax administration, anti-revenue loss, anti-transfer pricing, anti-transfer profit and erosion of revenue sources in terms of institutions and policies; provide information and support to taxpayers; declaration management; training to improve the quality of human resources; inspecting and examining transfer prices; communication and international cooperation on tax.

The Ministry of Finance has stepped up the inspection of enterprises with associated transactions in order to monitor and prevent violations; ensure fairness in compliance with tax policies; improve deterrence and law enforcement for those who do not comply or do not comply well with the rules.

In addition, the annual inspection plan is selected on the basis of risk analysis and focusing on associates with unprofitable business results, enterprises with high proportion of associated transactions; and enterprises trading with countries that have low corporate income tax rates or do not collect corporate income tax.

By Hong Van/ Huyen Trang

Related News

Vietnam secures VND 157 billion from state enterprise divestment in 2024

Vietnam secures VND 157 billion from state enterprise divestment in 2024

VCN - The Ministry of Finance reported that in 2024, the divestment of state capital in 5 enterprises (F1) generated VND 157 billion from an initial value of VND 145 billion
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units with large asset scale and large number of inventory items, complex assets, and slow implementation progress.
Vietnam gears up for potential inflation impact in 2025

Vietnam gears up for potential inflation impact in 2025

VCN - For sound price management and inflation control, Deputy Prime Minister Ho Duc Phoc directed officials to vigilantly track both domestic and international market dynamics. The goal is to proactively develop flexible strategies and solutions, enabling a swift response to any emerging challenges.
Director General Nguyen Van Tho: streamlining apparatus to meet the requirements of customs modernization

Director General Nguyen Van Tho: streamlining apparatus to meet the requirements of customs modernization

VCN - Director General of the General Department of Customs Nguyen Van Tho said that the customs sector will focus on arranging and streamlining the apparatus, ensuring that the new apparatus can be put into operation immediately, without interruptions.
Comment

Latest News

Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

VCN - The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more; the average growth rate of the consumer price index (CPI) to about 4.5-5%.

More News

Fiscal, monetary policies support demand stimulation, price stabilisation

Fiscal, monetary policies support demand stimulation, price stabilisation

These efforts, in conjunction with the implementation of monetary policies and other macroeconomic policies, aim to solve difficulties for businesses and the public, stabilise the macroeconomy, control inflation, ensure the balance of the economy, promote economic growth, and secure social welfare and people’s livelihoods.
VN’s credit conditions in 2025 expected to be stable

VN’s credit conditions in 2025 expected to be stable

The credit conditions for Việt Nam will stabilise in 2025, after improving substantially over the past year, the rating agency VIS is forcasts.
State revenue in first month of the year equal to 14% of the estimate

State revenue in first month of the year equal to 14% of the estimate

VCN - According to the Ministry of Finance, in January - the first month of 2025, the total state budget revenue is estimated at VND275.9 trillion, equal to 14% of the estimate; meanwhile, the total state budget expenditure is estimated at VND134.4 trillion.
Securities 2025 expects a breakthrough in scale and quality

Securities 2025 expects a breakthrough in scale and quality

VCN – The positive factors inherent in the macro economy and the Vietnamese stock market will continue to create the foundation for the market to maintain stability, good liquidity, and growth in both scale and quality in the new year of At Ty 2025, Chairwoman of the State Securities Commission Vu Thi Chan Phuong said.
Cash reserves in stock accounts at six-quarter low amid margin rise

Cash reserves in stock accounts at six-quarter low amid margin rise

These funds are readily available in investor accounts, but remained undeployed as of the year-end.
Five solutions for developing stock market in 2025

Five solutions for developing stock market in 2025

VCN - On February 5, 2025, at the Gong-beating ceremony to open the stock trading at the Ho Chi Minh City Stock Exchange (HOSE), Deputy Minister of Finance Nguyen Duc Chi introduced five solutions for comprehensive development of the stock market.
Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

Minister of Finance Nguyen Van Thang works with GDVC at the first working day after the Tet holiday

VCN- On February 3, the first working day after the Tet holiday, Minister of Finance Nguyen Van Thang and the delegation visited and worked with the General Department of Vietnam Customs (GDVC).
The stock market after Tết 2025 presents both challenges and opportunities

The stock market after Tết 2025 presents both challenges and opportunities

Việt Nam’s stock market following the 2025 Lunar New Year (Tết Nguyên Đán) presents a complex landscape of risks and potential gains, driven by foreign capital inflows, economic resilience, and looming corporate bond maturity pressures, according to one securities expert.
Opportunities and challenges in Việt Nam

Opportunities and challenges in Việt Nam's crypto boom

Việt Nam boasts one of the most active investment communities in the cryptocurrency sector. However, protecting investors and promoting sustainable growth requires a robust legal framework.
Read More

Your care

The system has not recorded your reading habits.

Please Login/Register so that the system can provide articles according to your reading needs.

Latest Most read
Personal income tax proposed for interest on some bank savings accounts

Personal income tax proposed for interest on some bank savings accounts

Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.
Banks set for aggressive bond issuance in 2025 to fuel growth

Banks set for aggressive bond issuance in 2025 to fuel growth

With a higher credit growth goal set by the SBV, banks are ramping up their efforts to secure funding through bond issuance.
Central bank cuts interest rate on bills for first time in 2025

Central bank cuts interest rate on bills for first time in 2025

According to data from the financial data provider Wichart, the SBV issued VNĐ19.6 trillion of bills in the past week. The interest rate on the bills decreased by 0.1 percentage point, from 4 per cent to 3.9 per cent on February 14.
Focusing on inspecting inventory of public assets at units with large and complex assets

Focusing on inspecting inventory of public assets at units with large and complex assets

VCN - According to Official Dispatch No. 1456/BTC-QLCS on inspecting the preparation and implementation of the General Inventory of Public Assets recently issued by the Ministry of Finance, the inspection of the inventory of public assets focuses on units
The government seeks approval for revised GDP, CPI targets

The government seeks approval for revised GDP, CPI targets

The Government submitted to the National Assembly for consideration and comments on adjusting the target for the growth rate of gross domestic product (GDP) to 8% or more
Mobile Version