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Intel cleared of Vietnam tax fraud

Never crossed the 17th parallel

The Vietnamese Ministry of Finance (MOF) has denied a rumor that Intel dodged the laws to evade the tax it should have paid for the $100 million capital transfer deal. 

HCM City Taxation Agency investigators found that that Intel Asia Holding was sold to another subsidiary of the same group at $100 million, which was equal to the cost price. Since the capital transfer deal did not generate profits, the transferor did not have to pay the corporate income tax. This comes as the HCM City Taxation Agency’s December report had doubts about the foreign invested enterprises’ behavior of evading tax. The method involves businesses claiming that a selling price equal to the buying price to evade tax.

In 2006, Intel came to Vietnam with the initial investment capital of $1 billion which it poured into its seventh production basis in the globe. At that time, the presence of Intel in Vietnam was hailed as Vietnam’s great achievement which was the reward for its efforts to attract foreign direct investment.

MOF has confirmed Intel has suffered unjust accusation of tax evasion, and that the Intel’s capital transfer case is different from the other suspected cases like Massan, Pho 24 or Coca Cola. It was just a straight restructuring of Intel rather than anything significant.

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