Unexpected Turn of Events: Phu Cuong Kien Giang Company Alleged Tax Debt
The Phu Cuong Kien Giang Joint Stock Company (referred to as Phu Cuong Kien Giang) has recently found itself in a surprising situation regarding its tax debt. The General Department of Taxation has issued a response to the Kiên Giang Provincial Tax Department, clarifying the issue of outstanding land use tax owed by the company.
According to the General Department of Taxation, based on Article 83 of the Tax Administration Law dated June 13, 2019, there are five cases in which tax debt can be written off. However, the case of Phu Cuong Kien Giang does not fit into any of these categories.
The correspondence from the General Department of Taxation states: “Based on the regulations (Clause 4, Article 18; Point c, Clause 7, Article 11; Point c.4, Clause 11, Article 13 of Decree 126/2020/ND-CP dated October 19, 2020, of the Government and Point b, Clause 1 and Clause 7, Article 59 of the Tax Administration Law), the Kiên Giang Provincial Tax Department issued Announcement No. 1340 dated July 3, 2023, but beyond the prescribed time limit (within 90 days), Phu Cuong Kien Giang Company has not paid the land use fee according to the announcement of the Kiên Giang Provincial Tax Department into the state budget, so the company must pay the overdue amount as prescribed.”
Phu Cuong Kien Giang Company is responsible for implementing the BT31 Villa Residential Area project (part of Zone I, Phu Cuong New Urban Area, Rach Gia City, Kiên Giang Province), approved by the Kiên Giang Provincial People’s Committee on July 22, 2021.
On July 3, 2023, the Kiên Giang Provincial Tax Department announced that Phu Cuong Kien Giang Company should pay more than 46 billion VND for the land use conversion fee within a 90-day period. However, the company believed that the tax amount for land use conversion was excessively high and not appropriate.
Subsequently, the company submitted a request to the Kiên Giang Provincial People’s Committee and relevant departments and agencies to reconsider the land use conversion price.
On December 19, 2023, the Kiên Giang Provincial Party Committee issued its conclusion and assigned the Provincial Department of Finance to lead and engage a consulting unit to independently determine the land price for surveying and defining. The Kiên Giang Provincial Tax Department was requested, according to its authority, to consider temporarily suspending the financial obligations of Phu Cuong Kien Giang Company in accordance with the law.
On January 8, 2024, the Kiên Giang Provincial Tax Department sent a letter numbered 30 to the General Department of Taxation, requesting guidance on the outstanding tax debt of Phu Cuong Kien Giang Company. The General Department of Taxation responded with a written document as mentioned above.
As previously reported, on February 23, 2024, the Kiên Giang Provincial Inspectorate concluded its inspection on the planning and implementation of construction planning by the Department of Construction and the People’s Committees of various districts and cities in Kiên Giang Province.
According to the inspection results, the inspectorate concluded that Phu Cuong Kien Giang Company had adjusted the detailed planning of land use in the BT31 designated area, part of Zone I, Phu Cuong New Urban Area. The company had gone through the necessary procedures for land use conversion and had issued notifications for the payment of land use fees.
However, the company had failed to pay the land use fees within the prescribed time limit of more than 46 billion VND, which is in violation of Clause 4, Article 18 of Decree No. 126 dated October 19, 2020, of the Government, which details certain provisions of the Tax Administration Law.
Furthermore, according to the inspection conclusions, Phu Cuong Kien Giang Company had also implemented partial adjustments to the commercial and service land areas in the central roundabout area of Phan Thi Rang (Phu Cuong New Urban Area) without completing the necessary procedures for land use conversion.
The unexpected turn of events surrounding Phu Cuong Kien Giang Company’s alleged tax debt highlights the complexities and challenges that businesses in the finance and economic sectors face. The company’s actions and compliance with tax regulations are now under scrutiny, emphasizing the importance of adhering to legal requirements in the ever-changing economic landscape.
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