Foreign manufacturers use foreign parts suppliers to avoid tax

[William Hung]

This is pretty interesting. Are Vietnamese journalists reading this forum? @alaungphaya, @LeveragedBuyout and @Carlosa were discussing this exact topic here just a few weeks ago.

Foreign companies operating in VietNam are favouring their own foreign partners to supply parts so they could engage in transfer pricing.

English - VietNamNet News

VietNamNet Bridge – Foreign automobile and electronics manufacturers often choose foreign enterprises for their parts and accessory suppliers instead of Vietnamese companies because it allows them to engage in transfer pricing, some analysts have claimed.

Samsung, Toyota, Canon and other giants in the manufacturing industry have complained many times that they could not find Vietnamese companies capable of providing high-quality parts and accessories in their global production chains.

Vietnamese enterprises are believed to have such low ability that they even cannot make simple parts and accessories like a screw.

However, local companies have denied that this was the reason they were not being chosen for orders.

“You should not say Vietnamese cannot make screws,” said Mai Van Dan, director of a company that has made motorbike parts for the last 20 years and exports its products to the EU, a choosy market.

Dan said that the problem was not that companies were not capable enough or lacked high technologies, but that foreign manufacturers preferred foreign subsidiaries of the same groups.

“When multinational groups enter Vietnam, they follow the ‘relatives’ of the companies. And the groups prioritize orders with them,” Dan said. “It is very difficult for Vietnamese enterprises to obtain orders.”

“Moreover, I think multinational groups tend to make purchases among the member companies of the groups to be able to conduct transfer pricing more easily,” he added.

A director of a mechanical engineering company said it was nearly impossible to meet multinational top executives to discuss possible business partnerships.

“They (the multinational manufacturing groups) may cite 1,001 reasons to refuse to admit you to their production chains,” the director said.

“If you say you can make a set of accessories they have been importing from China, they set price requirements that you cannot satisfy,” he said.

I now have big respect for the Vietnamese journalists for reporting things as they really are. (unlike one Viet member here who reports from the Onion)

I will now make more outlandish threads so foreign journalists can have more ideas to write their articles. I should be employed by VN news media.

 

[LeveragedBuyout]

This is pretty interesting. Are Vietnamese journalists reading this forum? @alaungphaya, @LeveragedBuyout and @Carlosa were discussing this exact topic here just a few weeks ago.

Foreign companies operating in VietNam are favouring their own foreign partners to supply parts so they could engage in transfer pricing.

English - VietNamNet News



I now have big respect for the Vietnamese journalists for reporting things as they really are. (unlike one Viet member here who reports from the Onion)

I will now make more outlandish threads so foreign journalists can have more ideas to write their articles. I should be employed by VN news media.

VN news media may cite 1,001 reasons to refuse to admit you to their production chains, so don't get your hopes up too high.

I've also noticed that news articles from The Diplomat often cover topics a day or two after we discuss them on PDF. Either they're reading us, or they're reading the same sources as us and have similar mindsets. If they were clever, they would have their own forum to discuss the content of their articles, which are so often the subject of controversy here. But what do I know, I'm no member of the global intellectual elite.

 

[William Hung]

VN news media may cite 1,001 reasons to refuse to admit you to their production chains, so don't get your hopes up too high.

I've also noticed that news articles from The Diplomat often cover topics a day or two after we discuss them on PDF. Either they're reading us, or they're reading the same sources as us and have similar mindsets. If they were clever, they would have their own forum to discuss the content of their articles, which are so often the subject of controversy here. But what do I know, I'm no member of the global intellectual elite.

If they cite those 1001 reasons for rejecting me, at least I'd still know that it's not due to any quality issue on my part.

I'm still waiting for someone to write about my euthanasia prediction.

Hey viet journalists, please write on this, it's deadly serious and depressing:

Euthanasia in ageing East Asian society in 30 years time.

Reasons:

1. Ageing population in a country with a declining economy (e.g. Japan).

2. Cultural pressure: The Confucian emphasis on obligation and duty, that the primary role of a citizen is to be productive and contribute to the wider community.

3. In a declining economy, it will be made clear to the elderly, intentionally or not, that they are a burden to society rather than a group that contributes.

4. Loneliness: current young adult east Asians has less siblings and bear less childrens, or none at all. Loneliness will await them in their retirement years.

5. Alienation due to technology. Elderly people usually do not adopt modern technology (e. g. only a minority get into facebook/social media). Since technology are integral to the lives of the younger generation, the elderly will feel alienated from the younger generation. The faster technology progresses, the more alienation there will be.

6. Technology brings nostalgia. Forget about the dream that future technology will produce humanlike Android companion or some other cool high tech ideas to help the elderly. When you're depressed and lonely, you will long for the more simple days. The foreign technology will only make you more nostalgic and increases the depression.

All these social pressure, loneliness, depression and alienation will change the mindset of these people. Active euthanasia will look desirable and be demanded. Such is life.

 

[Carlosa]

This is pretty interesting. Are Vietnamese journalists reading this forum? @alaungphaya, @LeveragedBuyout and @Carlosa were discussing this exact topic here just a few weeks ago.

Foreign companies operating in VietNam are favouring their own foreign partners to supply parts so they could engage in transfer pricing.

English - VietNamNet News



I now have big respect for the Vietnamese journalists for reporting things as they really are. (unlike one Viet member here who reports from the Onion)

I will now make more outlandish threads so foreign journalists can have more ideas to write their articles. I should be employed by VN news media.

Very interesting, this can potentially explain why most foreign companies in Vietnam never pay taxes, they are always financially barely making it, never mind that they keep expanding like crazy, but never a profit of course, transfer pricing is a good way to make it happen.

 

[Aepsilons]

VN news media may cite 1,001 reasons to refuse to admit you to their production chains, so don't get your hopes up too high.

I've also noticed that news articles from The Diplomat often cover topics a day or two after we discuss them on PDF. Either they're reading us, or they're reading the same sources as us and have similar mindsets. If they were clever, they would have their own forum to discuss the content of their articles, which are so often the subject of controversy here. But what do I know, I'm no member of the global intellectual elite.

Well said, Sir.