The Ho Chi Minh City: Tax debts of real estate companies rise

	Ha Tinh Customs has not yet collected VND 29 billion of irrecoverable tax debts
	The Ho Chi Minh City Tax Department: Concentrating on debt collection at the end of the year
	HCM City Tax Department: severely prevent tax loss from real estate

The real estate project of Ben Thanh - Sao Thuy Company with arising tax arrears. Photo: T.H.

Debt hundreds of billion dong

In the list of companies with tax debts announced by the Tax Department of Ho Chi Minh City late last week, many real estate companies owed hundreds of billions for land taxes, including the case of Ben Thanh - Sao Thuy Co., Ltd, with a debt of 356 billion VND, leading the list of large tax debt companies.

Ben Thanh - Sao Thuy Company Limited (a joint venture between Ben Thanh Land - a 100% State owned enterprise and Sao Thuy Company Limited - a private enterprise) incurred the above tax debts at the Tax Sub-Department of District 1 following the conclusion of State Audit of a land allocation project of HCM City People's Committee for this company. Accordingly, the State Audit has asked the Tax office to supplement the land use fee of the project with the amount of 330.9 billion dong and the registration fee 334.6 million dong. Talking with us, a representative of the accounting department for this company also admitted that the amount of tax debt was land use fee and registration fee.

After the non-effective debt reminder, Tax Sub-Department of District 1 applied many measures to enforce tax debts for this company to recover debts to the State budget, such as issuance of tax debt enforcement decision by deducting money from the bank account; Preventing the company’s use of invoices to recover tax debts to the State budget, but so far the company has not paid taxes. As of October 31, 2018, total tax debts that Ben Thanh - Sao Thuy had not paid to the State budget reached nearly 356.5 billion dong.

According to Ho Chi Minh City Tax Department, the Tax authorities are still creating conditions for the company to pay the debt owed. However, if the company’s ineligibility to pay tax is deliberate, the Tax authorities will have to take more severe tax enforcement measures, which is the proposal to revoke the business registration license under legislation.

Real estate tax debts rise more than 50%

In addition to the above cases, there are a series of real estate companies with large tax debts up to hundreds of billion dong. Specifically, the Thai Thinh Joint Stock Company owes more than 119 billion dong; Branch of Binh Duong Construction Stone Company in HCMC owes over 118 billion VND; the Hong Quang Real Estate Construction and Investment Joint Stock Company owes over 96 billion VND; the Diep Bach Duong Real Estate Co., Ltd. owes more than 35 billion; the Thang Long Real Estate Trading Services Joint Stock Company owes more than 10 billion; the Saigon Phuong Nam Real Estate Joint Stock Company owes more than 14 billion; Nam Huy Hoang Design and Construction Consultant Joint Stock Company owes over 17 billion VND...

For the cases of tax debts mentioned above, the Tax Department of Ho Chi Minh City applied measures to enforce tax debts in accordance with regulations for the companies, such as blockading the bank accounts to deduct tax money; Preventing the use of invoices by notifying that the invoices were not worth using... However, many cases are still unlikely to be recovered. For example, the tax debt of more than 119 billion of Thai Thinh Joint Stock Company, according to the reporter's understanding, this company was licensed in 2004, closed tax code by the end of 2013.

Many real estate companies owing tax debts from a few dozen to several hundred billion for non-submission to the state budget as mentioned above, has caused the tax debts from house and land projects in the area of Ho Chi Minh City to skyrocket. According to the Ho Chi Minh City Tax Department, by the end of October 2018, the total debts (until 90-day debt and over 90-day debt) were estimated at over 9,500 billion VND, up 25 to 34% compared to December 31st, 2017. In particular, the debts related to land was 1.826 billion, up from December 31st, 2017 of 663 billion, equivalent to a 57.01% increase.

HCM City: Announce list of enterprises owing nearly 300 billion VND of tax debt VCN – HCM City Tax Department has published the list of 333 enterprises that owe tax debts ...

With many measures to recover debts, in the past 10 months, the Tax Department of Ho Chi Minh City recovered and processed more than 5,500 billion. Of which, collection by debt management measures was 3,225 billion, collection by enforcement of tax debt was 2,335 billion.

According to the Ho Chi Minh City Tax Department, to complete the target budget collection in 2018, in addition to measures to increase revenue, the HCM City Taxation Department has directed the units to accelerate debt collection in the last months of year, tightening enforcement measures for tax debts with the companies which fail to fulfill their tax obligations…