Bank seeks tax breaks for taking over ailing finance company

Thursday, Oct 22, 2015 17:31

Saigon-Ha Noi Commercial Joint Stock Bank (SHB) asks Ministry of Finance for free tax in the first three years after merging with Vinaconex Viettel Finance (VVF). — File Photo
HA NOI (Biz Hub) — The Sai Gon-Ha Noi Commercial Joint Stock Bank does not want to pay tax for two years after it acquires troubled Vinaconex Viettel Finance Company at the end of this year, and has sought a waiver from the Government.

In a petition to the finance ministry and the central bank, citing VVF's large amount of non-performing loans, it has also sought a 20 per cent reduction in corporate tax from 2018 to 2020.

But the wish list does not end there. The bank wants its shareholders too to be exempted from income tax arising from converting VVF shares into SHB shares at a ratio of 1:1.

It wants SHB Consumer Finance Company Limited, as VVF will be called post-acquisition when it becomes a wholly-owned subsidiary, to be exempt from tax for the first three years, and a 50 per cent waiver for the next two.

The bank also hopes a tax-free period from 2013 to 2015 for acquiring another embattled lender, Habubank, at the end of 2012.

It has asked the State Bank of Vietnam for permission to take VVF's bad debts, amounting to VND263 billion (US$11.7 million) as of the end of June, off its balance sheet to make its finances look better.

SHB has also sought the central bank's permission to seek foreign strategic investors who could acquire or tie up with SHB Consumer Finance Company after a certain period.

Since the bank has been working on non-performing loans and other problems following its merger with Habubank in 2012, it wants the central bank to allow it to make provision for bonds issued by the Vietnam Asset Management Company for 10 years. — VNS


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