Coca-Cola Vietnam has recently undergone scrutiny from local tax authorities over possible transfer pricing, as the company has repeatedly reported losses and has not paid a single penny of corporate income tax due to those losses since its arrival in Vietnam.
Moreover, the company is now demanding to lease more land area, yet it has only covered two-thirds of the 40,000-square-meter land plot it leased from the city.
In response, Da Nang authorities said they appreciate the wish to expand production of Coca-Cola Vietnam, but added that the demand will not be accepted.
Da Nang has created all necessary conditions for Coca-Cola to establish investment in the city, but has so far collected modest tax payments from the company, the authorities said.
“So Da Nang will have to review the effectiveness of Coca-Cola Vietnam’s projects to consider leasing more land area to the company,” they said.
Vo Duy Khuong, deputy chairman of the city’s People’s Committee, said not only Coca-Cola Vietnam, but all of the other foreign-invested businesses in the city will not be allowed to expand operation if they have a dubious financial status.
“The city will not approve any expansion proposals if the companies have engaged in transfer pricing activities,” he said frankly.
