Robert H.Green, a leading tax expert from U.S Skadden, Arps, Slate, Meagher&Flom Ltd. shared experience in controlling transfer pricing at a conference in Vietnam’s capital city of Hanoi on Oct 9. Mr. Green talked about methods to estimate basic costs of production and appropriate cost growth rate, prices of imported and distributed goods; common transfer pricing methods in the financial sector; and international experience against these methods. The discussion is expected to help improve transfer pricing management in particular and financial management in general in Vietnam, the Ministry of Finance said on its website. In recent years, although policies related to transfer pricing have been actively tightened, transfer pricing is getting more and more complicated, with fake losses and real profits in foreign-invested enterprises (FIEs) and transnational corporations in Vietnam. Therefore, the General Department of Taxation has drafted a program to control transfer pricing in the period of 2012-2015 that focuses on analyzing risks in transfer pricing management; processing and storing information to support tax management activities; gathering and analyzing signs of transfer pricing in enterprises in Vietnam. Transfer pricing is now among great concerns for state management agencies as it will help FIEs evade taxes, which will harm the local business environment. According to the General Department of Taxation, tax authorities last year inspected 921 FIEs that were suspected of transfer pricing. The inspectors reported total tax losses of over VND6.6 trillion, 3.5 times higher than in 2010, and collected arrears and penalties worth VND1.6 trillion, four times higher than the preceding year. (mof.gov.vn Oct 10)
