|Scene at the event
Experts pointed out popular misconceptions about transfer pricing in Vietnam due to the lack of knowledge on international standards and business practices.
In his opening speech, Adam Sitkoff, CEO of AMCHAM in Hanoi, expressed his concerns regarding the widespread perception of transfer pricing as a tool for tax evasion and a violation of laws.
He said that in the context of Vietnam’s increasing integration into the global economy, transnational transactions will start to become more and more frequent.
The misconceptions about these types of transactions will create challenges and barriers for transnational investors when they decide to invest in Vietnam, Adam said.
He stressed that measures should be taken to determine appropriate prices for these transactions, including tangible and intangible transactions, services, financial or cost/share distribution.
Wayne Barford – senior advisor of the International Tax and Investment Center (ITIC) and an expert with extensive international experience in taxation and transfer pricing – said that transfer pricing is defined as the rules and methods of valuation for internal transactions or between enterprises of the same ownership or control system.
As cross-border transactions can alter taxable income, tax authorities in many countries may apply different pricing methods to conventional methods based on market prices among independent enterprises, he said.
Transfer pricing is not an illegal activity, he affirmed, noting that it is only fraudulent pricing or the abuse of transfer pricing for tax evasion that is illegal.
Nguyen Van Toan, Vice Chairman of the Vietnam Foreign Investment Business Association, highlighted the role and contributions of foreign enterprises in promoting the country’s economic development.
He expressed his wish that the Government and business community could concede on a more comprehensive and objective view of foreign firms’ business, especially in terms of legal internal transactions between enterprises in multinational corporations, in order to avoid creating negative effects on the investment climate in Vietnam.