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Formosa Suspected of Tax Evasion in Vietnam

Hung Nghiep Formosa Ha Tinh Steel Company – the firm which recently came under scrutiny after central Vietnam's mass fish death – is once again in hot water this week, as both the Ha Tinh customs department and Ha Tinh tax department have accused the firm of tax evasion.

According to Tuoi Tre, the province's customs department have uncovered irregularities in “most inspections” of Formosa's tax returns since 2013. The government agency also claimed that a February 2016 inspection of the company revealed 19,497 receipts from Formosa containing false deductions and other infractions.

As a result, Formosa is now required to pay VND5.5 billion (US$245,850) in back taxes to the Ha Tinh customs department, reportsTien Phong.

For a more specific example, reports VnExpress, an October 2014 equipment shipment for the company was valued at US$348,659 by the contractor tasked with bringing Formosa's goods through customs. The commercial invoice from abroad, however, valued the same shipment at over US$1.42 million.

After customs officials looked into the discrepancy, Formosa withdrew the original commercial invoice, re-declaring the value of the shipment at US$470,690 instead of the US$1.42 million from before. In this way, the company was able to avoid paying higher taxes on its imported goods by devaluing the cost of the shipment.

At this point, you might want to put on your thinking caps because this is where it gets confusing. In addition to the customs department, it turns out that Ha Tinh's tax department – a different branch of government altogether – is now also charging Formosa an additional VND225 billion (US$10.05 million) in back taxes, according to VietnamNet.

Though the explanation for this additional charge is vague at best, officials from the provincial tax department in Ha Tinh cited expired and unapproved construction contracts as the reason for their decision, reports Lao Dong.

Though Formosa has already paid the Ha Tinh tax department, the company is still contesting the charge.

[Photo via Ha Tinh Economic Management Board]

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