NTP: Explanation for collection of income tax and VAT of 2007 and 2008

According to Decision No. 960/QDD-CT on 15/05/2009 of Haiphong Tax Department, Tien Phong Plastic JSC has to pay income tax and value added tax of 2007 and 2008:

- Income tax: VND 48,141,820,336

- VAT: VND 2,024,890,765

The Company explained for the collection of income tax and VAT of 2007, 2008 as follows:

- Equitization of company was made on 30/12/2004 and the company registered for stock trading on 12/2006

- According section 2, article 36 of Decree No.164/2003/ND-CP on 22/12/2003 of the Government, Company enjoyed income tax heaven for year 2005 and 2006, and got 50% reduction of income tax for next 3 years (2007, 2008 and 2009)

- According Circular No. 11924/TC-CST on 20/10/2004 of Ministry of Finance: Listed company registered for trading for the first times will get 50% reduction of Income tax for 2 years with effect from the first trading day.

- According Circular No. 3181/TCT-PCCS on 29/08/2006 of General Department of Taxation: Company had submitted document No. 03/KTTC-NTP on 28/2/2007 to Haiphong Tax Department to register for income tax deduction: tax exemption of 2005, 2006, 2007; 50% tax deduction of 2008, 2009. These years, the Company sent tax accounting to Haiphong Tax Department.

- On 12/8/2008, Haiphong Tax Department document No. 404/CT-TB requiring supplement of income tax. Company just gets deduction for being listed company after tax deduction for equitization expires. On  14/8/2008, company sent document No.18/KTTC-NTP to General Department of Taxation and Haiphong Tax Department for guidance and grounds for the implementation.

- On 17/2/2009, although Haiphong Tax Department did not have guidance document of General Department of Taxation, they still required the Company get deduction for being listed company after tax deduction for equitization expires. According to the Tax Law, the Company has to follow this requirement.

- Company did not account tax for foreign contractor in equipment purchase with foreign specialists’ installation and maintenance guidance. As a result, tax inspectors collected VAT of VND 1,899,904,276 and Income tax of VND 991,092,313

- Some amounts spend before, department of taxation is not accepted  to count in assessable expense and just count in it when get real pay.

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