Heineken refutes Vietnam taxman

"Despite making a full payment in line with the tax assessment, Heineken Asia Pacific (Heineken APAC) does not agree with the basis on which it was issued," the company stated Tuesday.

The firm has initiated proceedings under Vietnam-Singapore Double Taxation Treaty terms to seek clarification over the taxman’s decision, it said.

Heineken added it is committed to conduct business with integrity and with respect for the laws and regulations of countries in which it operates.

The statement follows the General Department of Taxation decision to charge the Dutch beer giant VND917.2 billion ($39.7 million) in back taxes and fines for a 2018 transaction.

Singapore-based Heineken APAC at the end of 2018 struck a deal valued at over VND4.8 trillion ($207.7 million) with Heineken Vietnam Brewery. Accordingly, the Singaporean firm transferred its entire Vietnamese subsidiary stake to the latter.

Tax payable on the deal came to VND823 billion ($35.6 million), but Heineken Asia Pacific claimed it was exempt from paying it under the double taxation agreement between Vietnam and Singapore.

However, the General Department of Taxation ruled the tax had to be paid because real estate value was over 50 percent of assets involved in the deal. It also charged extra for late payment.

Vietnam collected VND18.8 trillion ($813 million) last year in back taxes and fines, according to the department.