Transfer pricing suspected in SAScoat Viet Nam

Friday, Jun 05, 2015 14:40

A paper production line of SAScoat Viet Nam. The company is suspected of engaging in transfer pricing. — Photo
HA NOI (Biz Hub) — The Debt and Asset Trading Corporation (DATC) has asked the General Department of Taxation to investigate SAScoat Viet Nam for transfer pricing, online newspaper Investment said.

The request was made following the continuous reporting of losses by SAScoat Viet Nam.

Established in 2007 in the central province of Binh Thuan, SAScoat Viet Nam is a foreign-invested firm that specialises in producing self-adhesive paper for export and electric film screens. It has a capacity of producing 200 million sq.m of products per year.

The company has a charter capital of VND246 billion (US$11.3 million), of which SAScoat Holding A.G Switzerland holds 73.99 per cent and the remaining is held by Vietnamese partners, including DATC with 6.5 per cent.

DATC said after three years of operations, SAScoat Viet Nam continuously reported losses, although its production scale, output and revenue kept growing. At the end of 2014, the company reported losses of VND655.8 billion ($30.2 million).

However, during the period, the company increased its capital twice by VND86 billion ($3.9 million). At its shareholders' meeting last October, the company proposed to increase its charter capital by VND127.2 billion ($5.9 million), but the plan was rejected.

Vietnamese shareholders own only 26.01 per cent of SAScoat Viet Nam's charter capital, so they cannot control and proactively decide important issues relating to the company's operations.

Earlier this year, Metro Cash and Carry Viet Nam was asked to pay VND507 billion (US$23.3 million) as additional tax to the State budget, after an investigation discovered several transfer pricing violations.

Transfer pricing is setting of the price of goods and services sold between controlled (or related) legal entities within an enterprise, instead of actually purchasing them in the open market. — VNS

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