The branch of Suntory Pepsico Viet Nam Beverage Company in Can Tho City is subject to taxes as an expansion but not as a new investment, the Ministry of Finance has announced.

The decision was published in a recent document sent to the alliance between PepsiCo Inc. and Suntory Holdings Limited to respond to the company’s proposal for tax incentives as a new investment.

The ministry said that the branch of Suntory Pepsico in Can Tho City must be taxed as an expansion following the Law on Corporate Income Tax.

In 2008, HCM City–based Suntory Pepsico Viet Nam invested in a new a plant in Can Tho City’s Tra Noc Industrial Zone, which was granted an investment certificate. Under the certificate, the plant in Can Tho would enjoy tax incentives as a new investment, including a corporate income tax rate at 15 per cent for 12 years of operation, exemption from the corporate income tax for three years and 50 per cent discount in payable for the seven following years.

However, after an inspection in 2012, the General Department of Taxation said that the plant in Can Tho was the subject to tax as an expansion investment. Accordingly, the plant must pay an additional VND18 billion (US$789,500) in corporate income tax for 2012 and 2013 and a fine of VND3.5 billion for late payment.

In April, the company sent a document to propose taxation as a new investment, as per the investment certificate. — VNS