Recently, Electric Construction Consulting JSC (code: TV2) announced that it had received a decision from the Ho Chi Minh City Tax Department regarding administrative penalties for tax violations during the 2023 tax inspection.
According to the announcement, the company has timely made adjusted declarations and paid money to the state budget according to Decision No. 2386/QD-CT, including: Corporate income tax of VND 3.86 billion, personal income tax of VND 74 million, late payment of VND 152 million, and administrative violation fine of VND 794 million; at the same time reducing the amount of VAT still deductible in the next period (December 2023) of more than VND 1.5 billion.
“Corporate income tax arises mainly due to the requirement to recognize revenue for projects that have received advances and are being implemented but have not completed acceptance procedures with customers,” the document states.
Thus, the total amount of tax penalties at TV2 is nearly VND 5 billion, and the deductible VAT amount is VND 1.5 billion.
The Ministry of Industry and Trade terminates the BOT contract of Song Hau 2 Thermal Power Project.
In a related development, Electric Construction Consulting 2 has faced a challenge as the “super project” BOT Song Hau 2 could not be implemented. Previously, the Ministry of Industry and Trade issued Document No. 4579/BCT-DL dated July 1, 2024, notifying Song Hau 2 Thermal Power Company, Ltd. about the termination of the BOT contract of Song Hau 2 Thermal Power Project.
The BOT contract for the Song Hau 2 Thermal Power Plant project was signed between the Ministry of Industry and Trade, Toyo Ink Group Berhad (investor), and Song Hau 2 Thermal Power Company, Ltd. (project enterprise) on December 29, 2020.
In March 2023, TV2 and Sunway Construction (Malaysia) signed an EPC contract worth $2.42 billion for the Song Hau 2 Thermal Power Plant project. TV2’s proportion in the EPC contract is $1.09 billion (26.5 trillion VND), equivalent to 45% of the total contract value.
This project was expected by Vietcap analysts to start in early July 2024 and contribute a total revenue of 26,500 billion VND to Electric Construction Consulting JSC (TV2) in the period of 2024-2028 – equivalent to 70% of the company’s total revenue in 2024-2028.
The document states that, according to Clause 23.2(b) of the BOT Contract, the Ministry of Industry and Trade issued Document No. 7756/BCT-DL dated December 2, 2022, notifying Song Hau 2 Thermal Power Company, Ltd. about the non-compliance with an important clause of the BOT Contract due to failure to meet the Mandatory Financial Closing Date as prescribed in the BOT Contract.
As Song Hau 2 Company has not been able to arrange finance within the time limit prescribed in Clause 23.2(b) of the BOT Contract, this has constituted a “Project Developer’s Breach” as per Clause 23.2 of the BOT Contract.
On November 9, 2023, the Ministry of Industry and Trade issued Document No. 7921/BCT-DL to Toyo Ink Group Berhad and Song Hau 2 Thermal Power Company, Ltd. regarding the timing and conditions for arranging finance for the project.
According to Clause 23.4 of the BOT Contract and following Document No. 7921/BCT-DL, the Ministry of Industry and Trade issued Document No. 2109/BCT-DDL dated April 1, 2024, notifying Song Hau 2 Thermal Power Company, Ltd. about the “Project Developer’s Breach” and the intention to terminate the BOT Contract.
As the 90-day period has expired since the Ministry of Industry and Trade issued the “Notice of Intention to Terminate” but Song Hau 2 Thermal Power Company, Ltd. has not been able to arrange finance for the project. Therefore, according to Clause 23.4 of the BOT Contract, the Ministry of Industry and Trade also officially notified Song Hau 2 Thermal Power Company, Ltd. about the effectiveness of the termination of the BOT Contract of the project.
Reacting negatively to this information, TV2 quickly “evaporated” with many consecutive floor sessions from the beginning of July. TV2’s market price witnessed a 45% decline within two months, pushing the price down to 29,200 VND/share on August 8.
Previously, this electricity stock had set a “hot” increase of 46% in the period from May 15, 2024, to June 10, 2024, thereby reaching a historical peak of 53,100 VND. Currently, TV2 has recovered slightly to 34,000 VND/share at the close of August 19. Looking at the price chart, it is easy to recognize that the “pine tree” pattern has been established.
Xuyên Việt Oil’s tax debt amounts to 1.529 trillion VND.
In the latest 2023 released by the Ho Chi Minh City Tax Department, one entity accounted for 50% of the total debt of over 3,100 billion VND from 166 businesses.
Tax Exemption for Corporate and Personal Income in Ho Chi Minh City
Government Decree No. 11/2024/NĐ-CP dated February 2, 2024, also specifically stipulates the exemption of corporate income tax and personal income tax in Ho Chi Minh City.
How to retain FDI businesses by implementing a global minimum tax?
The implementation of a global minimum tax will directly impact the interests of foreign direct investment (FDI) businesses enjoying tax incentives in Vietnam.
Can Tho: What’s Holding Back the 02 Key Projects under the Resolution 45 of the National Assembly?
Resolution No. 45/2022/QH15 of the National Assembly has assigned the city of Can Tho and central ministries and agencies to collaborate on implementing two key projects that have strategic significance for the development of the Mekong Delta region. These projects include the dredging and recovery of the marine route from Dien An to Can Tho, as well as the establishment of a center for linking, producing, processing, and consuming agricultural products from the Mekong Delta region in Can Tho. However, up until now, the implementation of these two projects still faces numerous difficulties and challenges.
