Oct 29, 2012

Vietnam - Tax debt wave could still hit Silver Shores

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Prospect for the US-backed resort developer Silver Shores to overturn the Ministry of Finance’s determination on its huge tax duty remains dim.

A senior official at the Policy Department under the General Department of Customs (GDC) told VIR that Silver Shores would have to pay $1.3 million in import tax for the goods that formed the project’s fixed assets.

The GDC last week also sent a document to the Ministry of Planning and Investment to ask for opinions to address this case.

“Apart from Silver Shores, there are around four or five projects around the country which have been caught in this entanglement,” the GDC official said. “Therefore, treatment should be coherent for all enterprises.”

Two weeks ago, Danang People’s Committee also sent a document to the Ministry of Finance (MoF) seeking a reasonable solution for the case.

Silver Shores’ tax burden has built up over the past three years, following changes to an import tax exemption it was granted in 2006. The exemption was granted under Decree 149/2005/ND-CP detailing the Law on Import and Export Tax.

Circumstances changed when the MoF released Circular 79/2009/TT-BTC effective from June 2009, which required enterprises to choose among only a few import tax exemption conditions.

In July 2011, the GDC sent Silver Shores an import tax bill amounting to $1.3 million. But, the Danang-based property developer disputed the bill and sent several documents to the MoF to support its argument.

The company has proposed authorities allow it to continue enjoying tax preferences as specified in its investment certificate. It also asked the MoF to permit it to delay the payment until the MoF has a final decision on the case.

Silver Shores said that despite the dispute it would continue working with relevant management agencies to continue importing goods to serve its projects.

According to the GDC official, Decree 149 also regulated that the MoF was responsible to guide the implementation of import tax incentives to ensure proper management. “Circular 79 was released to aim at fairness among enterprises in enjoying the tax incentives,” said the source.

Nguyen Trang | vir.com.vn

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