Groupe Casino to pay $220 million in tax after sale of Big C Vietnam
Groupe Casino to pay $220 million in tax after sale of Big C Vietnam
Groupe Casino may have to pay $220 million in tax after selling the Big C Vietnam chain to Thai conglomerate Central Group.
Talking to Vietnam Television, Nguyen Dau, deputy chief inspector of the General Department of Taxation under the Ministry of Finance, said revenues from the sale of real estate and projects is subject to a tax rate of 20 per cent since January 1, 2016.
Groupe Casino sold Big C Vietnam to Central Group for €1 billion ($1.14 billion). Thus the payable amount is approximately $220 million.
Big C Vietnam is incorporated in Hong Kong while Central Group in Thailand. Though the two companies are headquartered outside of Vietnam, the Big C chain draws its income from Vietnam, bringing it within the scope of the regulation.
“In cases like this, companies have to file tax according to the Law on Corporate Income Tax and with a particular view to Circular 78/2014/TT-BTC guiding the implementation of the law, which stipulates that income from the sale of real estate and projects is subjected to a tax rate of 20 per cent starting from January 1, 2016,” Dau said.
Moreover, Circular 203/2015/TT-BTC of the Ministry of Finance on avoiding double taxation stipulates that companies headquartered in a foreign country that do not pay tax or pay less than 10 per cent in that country are subjected to income tax in the country where it earns the income. Therefore, Big C Vietnam is subjected to the sales tax in Vietnam because Hong Kong is not collecting tax from it.
Earlier, German company METRO Group paid VND1.9 trillion ($85.25 million) in tax when it sold its chain METRO Cash & Carry Vietnam to Thai company TCC.
