Finance Ministry tightens control over FIE transfer pricing, domestic businesses suffer VietNamNet Bridge – Vietnamese corporations have complained that the new solution to fight against transfer pricing by controlling loan interest rates is causing problems for their operations. The government Decree No 20/2017 on tax management on businesses which have related party transactions stipulates that the total accrued expenses on loan interest must not be higher than 20 percent of the total net profit from business, plus loan interest and amortization expenses. In an appeal lodged to the Ministry of Finance (MOF), Electricity of Vietnam (EVN) said the regulation has had a big impact on the financial situation of the corporation because it makes it more difficult to arrange capital for electricity projects which require huge capital. To implement power development projects, EVN has to borrow money from many different sources and observe market rules. EVN also complained that the amounts of taxes EVN and its subsidiaries have to pay have soared after the new policy took effect in May 2017. The amount of corporate income tax that EVN GENCO 1 has to pay is VND339 billion higher than previously, while the figure is VND212 billion for EVN GENCO 3. EVN also complained that the amounts of taxes EVN and its subsidiaries have to pay have soared after the new policy took effect in May 2017. The amount of corporate income tax that EVN GENCO 1 has to pay is VND339 billion higher than previously, while the figure is VND212… [Read full story]
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