Suspicions retailer involved in transfer pricing confirmed by GDT.
Metro Cash & Carry Vietnam must pay VND507 billion ($23.63 million) in tax arrears after it was found to have conducted transfer pricing following a two-month inspection by the General Department of Taxation (GDT).
The arrears include the company’s unpaid corporate tax and reductions in value-added tax payments the firm was allowed to enjoy, among other sums.
Mr. Bui Van Nam, General Director of Taxation, said that Metro’s violations have now been fully clarified, especially in regards to transfer pricing. “All taxes determined to be violations and relating to transfer pricing price will be forwarded to the State budget,” he was quoted as saying.
Tax agencies had tried to clarify transfer pricing disputes with company previously but failed to identify any wrongdoing.
Metro Cash & Carry Vietnam began operations in 2002 with initial capital of $120 million and legal capital of $36 million. It changed its license six times, increasing its total investment to $301 million by 2013. Its set up consists of one main office and 19 branches in 16 cities and provinces, including three in both Hanoi and Ho Chi Minh City. From 2002 to 2013 it declared losses of VND1.6 trillion ($75 million) and only one year stated a profit, of VND173 billion ($7.9 million). The continual losses aroused suspicions of transfer pricing in the past.