Vietnam impatient as Thai supermarket giant dawdles over tax payment

By Thanh Thanh Lan   July 29, 2016 | 12:54 am PT
Tax authorities have told Central Group it faces fines if it doesn't pay up.

Central Group sealed a deal to acquire Big C Vietnam three months ago, but the retailer has yet to submit a tax return, according to Vietnamese authorities.

Central, controlled by the Chirathivat family, beat TCC Group to take a majority stake in Big C in late April this year.

The General Department of Taxation has repeatedly sent written requests to Big C Thang Long International Trade and Supermarket Service Company Ltd.- the legal entity of the hypermarket operations in Vietnam - to remind the retailer to fulfill its tax obligations.

France’s Casino Group sold its stake in Big C Vietnam to Central for 1 billion euros ($1.14 billion) on April 29, said the French retailer.

Local tax authorities said Big C Vietnam will face a fine of 0.07 percent of its total tax obligations per day for any payment delay over 90 days.

Vietnam's tax authorities collected VND1.9 trillion ($85.6 million) from the $700-million acquisition of Metro Vietnam last year.

German-retailer Metro Cash & Carry, before being sold to Thailand’s TCC International Land, was accused of falsely reporting losses for 12 years in Vietnam and failing to pay tax bills worth $23 million, according to the General Department of Taxation.

The Vietnamese government, in attempt to shore up economic momentum through foreign direct investment, has offered foreign investors low corporate tax rates and income tax deferrals or exemptions for a certain period of time.

However, tax authorities are constantly faced with foreign companies trying to avoid tax.

Vietnam is fixing loopholes in the corporate tax system so that foreign-invested companies, no matter how big they are, cannot escape the tax net.

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