Vietnam’s General Department of Taxation has requested local tax agencies in 20 locations Big C has operations in to ensure that the supermarket chain has fulfilled tax liabilities before renewing its business license or changing its legal representatives.
Two months after the finalization of a massive deal that sees it transferred to a Thai owner, French-owned supermarket chain Big C Vietnam is in dispute with the local tax authorities over the tax liability on a 1 billion euro (US$1.14 billion) sale.
On April 29, Thai conglomerate Central Group announced it had acquired Big C’s operations in Vietnam, including 32 outlets countrywide, from France's Casino Group.
According to Vietnamese law, parties involved in this type of transfer must declare and pay taxes within ten days of an agreement being reached.
Vietnam is expected to collect VND3.6 trillion ($160.71 million) in tax from the transfer, according to the General Department of Taxation.
However, two months after the deadline, neither Casino Group nor Central Group, which paid an enormous 1 billion euros to acquire 32 Big C outlets across Vietnam, has taken any step to fulfill their tax obligations.
Despite this, the entities set up to manage some of the Big C Vietnam stores have already made, or are in the process of making, managerial adjustments.
For instance, the entity that operates the Big C outlet in the north-central province of Thanh Hoa last month completed paperwork to have Thai national Phoom Chirathivat replace Frenchman Philippe Jean Broianigo as its legal representative.
Other stores, including the Big C Thang Long in Hanoi, have also lodged applications with the local investment department to make similar managerial changes.
Those moves have upset the General Department of Taxation, which has asked taxmen in 20 provinces and cities to review the paperwork before approving any applications from businesses under the Big C Vietnam umbrella.
“The General Department of Taxation has also suggested that local investment departments, administrations and tax agencies collaborate with each other to ensure that Big C fulfills its tax responsibility before approving its requests,” deputy head of the tax watchdog Nguyen Dai Tri told Tuoi Tre (Youth) newspaper on Sunday.
The general taxation department has worked with the finance ministry to enact measures to collect taxes from the Central Group – Casino Group transfer deal, as well as verifying whether the parties involved have bypassed any laws, Tri added.