Besra cashes in on $12 million gold customs tax refund
Besra cashes in on $12 million gold customs tax refund
By Nguyen Trang Canada’s Besra Gold Inc. will avoid nearly $12 million in tax arrears following after-clearance inspection results conducted by the General Department of Customs on its two gold mines in Vietnam.
The Ministry of Finance last week sent a formal notification to the company that an export tax assessment totalling $12 million against the Bong Mieu Gold Mining Company and Phuoc Son Gold Company had been repealed.
“The tax assessment had been hanging over us for more than a year, causing the company significant hardship. Our ability to import supplies and equipment was suspended for a period, as was our ability to export gold. Additionally, the $12 million assessment kept investors away and limited our access to credit facilities. With the ruling now behind us, we can now rebuild our production in Vietnam,” said Besra CEO John Seton.
The General Department of Customs (GDC) claimed in April last year that Besra’s Phuoc Son and Bong Mieu gold companies operating in Quang Nam province, needed to pay VND250 billion (approximately $12 million) in export duties.
In Vietnam, 9999 ‘four-nine’ exported gold does not attract any export duty. The GDC claimed that during 2011 and 2012, several shipments did not meet the 9999 quality threshold and was therefore liable to a 10 per cent tax.
Bong Mieu was asked to pay VND47 billion ($2.26 million) and Phuoc Son VND202.6 billion ($9.7 million), according to the GDC.
In a document sent to Besra, the GDC said that to enjoy an export tax rate of zero per cent, exported gold must have an assessment certificate that ensured it met the threshold. The regulations for certification were set out under Decree 20/2006/ND-CP detailing the provisions of the Commercial Law on the provision of commercial assessment services.
However, when investigating Phuoc Son Gold Mining Company, the department claimed that the company’s certificates had not fallen under the provisions of the decree on gold content. In mid-April, Besra filed a formal complaint seeking to have the assessment withdrawn because it had not violated any regulations.
Although refining in Vietnam is significantly more expensive than in Switzerland, Bersa engaged ACB Bank to refine their gold to 9999 gold.
ACB provided Besra with a certificate from Quatest 3, a company under the Ministry of Science and Technology – Vietnam’s largest and most reputable tester, who certified their exported gold as four nine standard.
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