Joining many FTAs, Vietnamese firms are worried about being sued for tax evasion

VCN - According to the Ministry of Industry and Trade, up to now, the risk of evading trade remedies and origin fraud for goods is increasing, especially in the context of the escalating US-China trade conflict, Vietnam participated in many new generation FTAs such as the CPTPP and EVFTA.
joining many ftas vietnamese firms are worried about being sued for tax evasion Origin of goods- important requirement to enjoy EVFTA tariff preferences
joining many ftas vietnamese firms are worried about being sued for tax evasion How to capitalise on EVFTA opportunities amid COVID-19
joining many ftas vietnamese firms are worried about being sued for tax evasion Rice exports to EU anticipated to make breakthroughs through EVFTA
joining many ftas vietnamese firms are worried about being sued for tax evasion
Steel is the industry facing the most cases of evading trade remedies. Photo: Nguyen Thanh


Frequency of investigations doubled

In recent years, there have been cases when trade remedies have been applied, this has affected manufacturing enterprises to overcome them by moving production out of the countries or economies where the measures are applied.

According to the Ministry of Industry and Trade, because of favorable policies for foreign investment, Vietnam is one of the choices of enterprises deciding to shift production. However, after receiving new production capacity, exports from Vietnam increased rapidly, making it easy for Vietnam to become the object of monitoring, investigating and applying additional trade remedies measures by importing countries.

The main cause of this problem is that import partners suspect goods do not meet the condition of "significant transformation" in Vietnam.In particular, the doubts about Vietnam's goods which “transforming significantly” in Vietnam mainly focused on itemsbeing subject to trade remedies, which are exported in large quantities, increasing dramatically to countries or items suspected of producing capacity in Vietnam.

In terms of data, the Ministry of Industry and Trade stated that in the period 2000 - 2016, there were 15 cases of evasion of trade remedy tax on Vietnam's exports, an average of a case per year.

However, in 2017 and the first quarter of 2020, there were seven new cases initiated, an average of2 cases were initiated each year.

Initiating investigation of tax evasion itself

Recently, ministries and branches have implemented many measuresto evade trade remedies and origin fraud. However, up to now, the risk of evading trade remedies and origin fraud is increasing, especially in the context of escalating US-China trade conflict and joining many new generation FTAssuch as the CPTPP and EVFTA.

The Ministry of Industry and Trade cited that, most recently, the United Stateshas investigated tax evasion the most for Vietnam with 10 cases,accounting for nearly 50% of the total number of cases, initiated the tax evasion investigation withstainless steel products from Vietnam.

It is relatively rare when the US authoritiesinitiate their own investigations without requests of US enterprises. This shows that the United States is strengthening the management of goods being subject to tax of trade remedies to ensure the effective implementation of the measures taken.

Notably, in addition to initiating its own investigation of the case, the United States is ready to accept requests for tax evasion investigations even though the plaintiffs of the case have filed the documents over the prescribed deadline. In addition, Vietnam's sued products are not limited to industrial products, but are also at increased risk for agricultural products.

In the current context, some experts assessed that if Vietnam did not take positive measures to deal with the problem of illegal evasion of trade remedies, especially through origin fraud, it would affect specific enterprises and industries. In the long term, this would negatively impact the competitiveness of our economy, especially in the context of joining a series of FTAs with high requirements on origin.

In the context of increasing protectionism, especially for many product groups such as steel, aluminum, agricultural products, fishery products, to minimize the possibility of application of trade remedies, it is necessary to have an overall and long-term strategyin developing production chains and improving added value for Vietnam's exports.

According to the Ministry of Industry and Trade, in addition to the Government's efforts, enterprises also play an important and decisive role to limit the risk of lawsuits for tax evasion and origin fraud.

Specifically, enterprises must be resolute in not participating, abetting the frauds of origin or illegal transshipment. In fact, if these acts are detected, the importing country will impose "sanctions", in many cases the enterprise will lose the entire export market involved.

joining many ftas vietnamese firms are worried about being sued for tax evasion Ready to take advantages of opportunities from EVFTA

VCN - It is expected that, after being ratified by the National Assembly, the European -Vietnam Free ...

In addition, if detecting signs of violations, enterprises should proactively coordinate with functional agencies to investigate, prevent and avoid the behavior of some enterprises affecting fair production and business enterprises.

By Thanh Nguyen/ Binh Minh

Related News

Import and export turnover increases to US$ 51 billion

Import and export turnover increases to US$ 51 billion

VCN – Import-export turnover in June saw a slight decrease but remained at a high level, the General Department of Vietnam Customs announces.
Preliminary assessment of Vietnam international merchandise trade performance in the first half of May, 2024

Preliminary assessment of Vietnam international merchandise trade performance in the first half of May, 2024

The Vietnam Customs Statistics announced that in the first half (01-15/5/2024) of May-2024, Vietnam’s total exports of US dollars 14.64 billion and imports of US dollars 17.26 billion resulted in a trade deficit of US dollars 2.63 billion. Accordingly, the total value of export and import turnover of Vietnam in the first half of May was US dollars 31.9 billion, went up by 7.7% as compared to the second half of April-2024.
Preliminary assessment of Vietnam international merchandise trade performance in the first 4 months of 2024

Preliminary assessment of Vietnam international merchandise trade performance in the first 4 months of 2024

Highlights 1. According to trade statistics of Vietnam Customs, in April of 2024, a 5.4% downwards in total external merchandise turnover of Vietnam was recorded as compared to the result of March 2024. Exports went down 7.7 %, to USD 31.05 billion and imports decreased 2.9%, to USD 29.99 billion in terms of month-on-month basis. As a result, there was a USD 1.07 billion surplus in Vietnam’s trade balance in this month.
Orders increase, exports in the first 5 months of the year continue to prosper

Orders increase, exports in the first 5 months of the year continue to prosper

VCN - Export turnover to most markets and major trading partners in the past 5 months has recovered well and reached high double-digit growth.

Latest News

Quality varieties spur Vietnamese rice industry

Quality varieties spur Vietnamese rice industry's growth: experts

The success of the rice sector is the fruit of a concerted effort spanning research, production and trade, with high-quality seeds delivered to farmers' hands, former Minister of Agriculture and Rural Development Cao Duc Phat has assessed.
Minister asks for FIATA’s support in dealing with increased shipping freights

Minister asks for FIATA’s support in dealing with increased shipping freights

Minister of Industry and Trade Nguyen Hong Dien has suggested the International Federation of Freight Forwarders Associations (FIATA) provide practical measures to assist Vietnamese businesses in overcoming challenges caused by the increased shipping freight rates, port congestion, and shortage of empty containers.
Efforts made to help firms deeply join global semiconductor supply chain

Efforts made to help firms deeply join global semiconductor supply chain

The Ministry of Planning and Investment (MPI) has taken various solutions to support domestic firms to join the global semiconductor supply chain more intensively, heard a meeting held on July 15 by the ministry.
What do businesses do to cope with foreign trade traps?

What do businesses do to cope with foreign trade traps?

VCN - In commercial disputes that are required to be resolved at the Vietnam International Arbitration Center (VIAC), many Vietnamese businesses are suffering disadvantages due to negligence right from the negotiation and contracting.

More News

Shifting production to expand exports to the Northern European market

Shifting production to expand exports to the Northern European market

VCN - Nordic countries often map out policies to achieve EU goals sooner than others. Among them, general principles and standards regulating manufacturers' responsibilities for textiles and garments from Nordic countries need to be paid attention by businesses.
Businesses advised to stay prudent to avoid trading scams

Businesses advised to stay prudent to avoid trading scams

Authorities have continuously warned Vietnamese businesses to stay prudent when trading with foreign partners in the face of a recent scam increase.
Leather, footwear exports to hit 27 billion USD in 2024

Leather, footwear exports to hit 27 billion USD in 2024

Export revenue of the leather, footwear and handbag sector is predicted to hit 26-27 billion USD in 2024 on the basis of the positive results seen so far, according to the Vietnam Leather, Footwear and Handbag Association (LEFASO).
Tra fish export to CPTPP market reaches 114 mln USD as of June 15

Tra fish export to CPTPP market reaches 114 mln USD as of June 15

Vietnam raked in 114 million USD from tra fish export to the signatory nations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as of June 15, a year-on-year increase of 10%, according to the General Department of Vietnam Customs.
Building a Vietnamese brand associated with green and sustainable development

Building a Vietnamese brand associated with green and sustainable development

VCN - According to experts, in the current context, branding becomes more urgent, helping to increase endogenous resources for businesses, helping businesses move towards strong development, gradually reaching further in the domestic and world markets.
Pepper export turnover up over 30% in H1

Pepper export turnover up over 30% in H1

Vietnam exported 142,586 tonnes of pepper in the first half of this year, down 6.8% in volume but up 30.5% in value, the Vietnam Pepper and Spice Association (VPSA) has reported.
Dong Nai remains FDI magnet in H1

Dong Nai remains FDI magnet in H1

The foreign direct investment (FDI) influx into the southern industrial hub of Dong Nai in the first six months of this year was equivalent to 138% of the locality’s plan for the whole year.
Vietnamese agricultural products, food expected for deeper engagement in global supply chain

Vietnamese agricultural products, food expected for deeper engagement in global supply chain

Vietnam boasts advantages and potential in agricultural production and export, yet domestic firms need to do more to join the global food supply chain more intensively, insiders have said.
Developing export markets along with trade promotion

Developing export markets along with trade promotion

VCN - Import and export of goods in the first 6 months of 2024 continue to record positive results, total turnover is estimated at USD 369.6 billion, up 16% over the same period last year.
Read More

Your care

Latest Most read
Quality varieties spur Vietnamese rice industry

Quality varieties spur Vietnamese rice industry's growth: experts

The success of the rice sector is the fruit of a concerted effort spanning research, production and trade, with high-quality seeds delivered to farmers' hands, former Minister of Agriculture and Rural Development Cao Duc Phat has assessed.
Minister asks for FIATA’s support in dealing with increased shipping freights

Minister asks for FIATA’s support in dealing with increased shipping freights

Minister of Industry and Trade Nguyen Hong Dien has suggested the International Federation of Freight Forwarders Associations (FIATA) provide practical measures to assist Vietnamese businesses in overcoming challenges caused by the increased shipping freight rates, port congestion, and shortage of empty containers.
Efforts made to help firms deeply join global semiconductor supply chain

Efforts made to help firms deeply join global semiconductor supply chain

The Ministry of Planning and Investment (MPI) has taken various solutions to support domestic firms to join the global semiconductor supply chain more intensively, heard a meeting held on July 15 by the ministry.
What do businesses do to cope with foreign trade traps?

What do businesses do to cope with foreign trade traps?

VCN - That was shared by VIAC experts at the Conference "Current foreign trade transactions: Changes in business strategy and dispute management" held in Ho Chi Minh City last weekend.
Shifting production to expand exports to the Northern European market

Shifting production to expand exports to the Northern European market

General principles and standards regulating manufacturers' responsibilities for textiles and garments from Nordic countries need to be paid attention by businesses.
Mobile Version