The HCMC People’s Court on Thursday dismissed the beverage giant’s administrative lawsuit seeking to annul the tax claim, which was issued on Dec. 25, 2019, by the director general of the General Department of Taxation.
At the time, tax authorities found the firm to have made incorrect tax filings for the 2007-15 business period and ordered it to pay VND471 billion in back taxes and VND288 billion in penalties for delayed payment.
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A Coca-Cola factory in Ho Chi Minh City. Photo courtesy of Coca-Cola Vietnam |
The tax department explained in documents submitted to the court that from 1994 to 2015, Coca-Cola Vietnam consistently reported losses, resulting in no business income taxes for those years except for 2015, when it paid VND115 billion.
However, its net revenues steadily grew during the period, reaching VND197 billion in 2001, VND1.13 trillion in 2008 and VND6.82 trillion in 2015.
Tax authorities conducted an inspection on the company’s tax filings for the period in 2016-17 and concluded in December 2019 that it had made incorrect filings that led to less tax than it should have paid.
Coca-Cola Vietnam lodged a complaint in 2020 to have part of the order removed, but the tax department dismissed the request, prompting the firm to file a lawsuit in 2022.
During the course of the case, the firm said it disagreed with some of the tax authorities’ conclusions but could not produce sufficient evidence.
The tax department said its inspection and decisions were conducted in accordance with the law, which the court affirmed.
After its appeal was dismissed, Coca-Cola Vietnam said it respects the court’s procedures and judgment but maintains that it has always fully complied with tax regulations. It is considering its next course of action, it added.
Coca-Cola entered Vietnam in 1994, becoming one of the first U.S. companies to invest in the country after relations between the two nations normalized.
In recent years, the company has invested $136 million to build a new factory in the southeastern province of Tay Ninh and expressed its desire to continue contributing to Vietnam’s development.
