Recently, the issue of tax avoidance through transfer pricing has been receiving more attention from authorities and the media, not only in Vietnam, but worldwide.

The workshop aims at giving participants a better understanding of typical business practices within specific economic sectors, such as the textiles and automotive industries, and thereby reducing the scope for tax avoidance and evasion within these sectors. It also allows at improving the understanding of transfer pricing rules and regulations applied in Vietnam, thereby improving business certainty and encouraging inward investment.

Mr. Bryan Fornari, representing the EU Delegation to Vietnam, said: "The EU is actively contributing to the process of ensuring coherent and comprehensive tax policy in Vietnam. As part of our broader cooperation with Vietnam in the area of Public Finance Management and oversight, we are pleased to develop the General Department of Taxation’s capacity to adopt, and effectively implement, transfer pricing rules in a clear and consistent manner. In doing so, we are ensuring that future reforms are geared towards encouraging investment, production and business activities as well as generating adequate revenues for the state budget”.

In order to assist the Government of Vietnam to adopt and implement appropriate transfer pricing policy, the EU Delegation in Vietnam has joined forces with the World Bank and the OECD, the leading global authority on transfer pricing, to design and deliver tailored training courses for the Transfer Pricing Task Force at General Department of Taxation and for officials at provincial tax offices. As a result, a series of capacity building events has taken place in Vietnam and elsewhere in the region over the past 12 months.

The European Commission's Communication on "Tax and Development", adopted in April 2010, highlights the need to support developing countries' capacity in mobilizing domestic revenues for development.

A particular emphasis, in this regard, was placed on combating cross-border tax avoidance through transfer pricing. Abusive transfer pricing activities usually occur when multinational corporations with a network of subsidiaries located in different countries declare higher costs and higher prices in order to declare operating losses in certain tax jurisdictions and thereby reduce tax payable.

Recently, the issue of tax avoidance through transfer pricing has been receiving more attention from authorities and the media, not only in Vietnam, but worldwide.

The workshop will wrap up on March 1