VietNamNet Bridge – The HCM City Planning and Investment Department, the governing body that has oversight over wholesale chain Metro Cash & Carry, has said that it has not received any official notice from Metro about its ownership transfer to the Thai BJC Group.

The HCM City Taxation Agency has also said it has not received any information about the transfer.

The management bodies still cannot say if Metro has to pay an assignment duty for the deal.

However, a source has said Metro will have to pay the assignment duty and the margin between the transfer capital and investment capital, between the selling price and the cost price, which is $578 million.

Regarding the selling price, local newspapers quoted a press release they received from Metro as saying that Metro was sold for 655 million euros, or $879 million.

The amount of capital that Metro injected into 19 wholesale centers over 12 years remains unclear.

Analysts, after considering Metro Vietnam’s report, estimated that by May 2013, the German distributor had poured $301 million into the distribution chain.

There had been no updates about the investment capital until the day the transfer deal was officially made, a couple of weeks ago.

However, analysts believe that the investment capital from June 2013 to now is modest.

During that time, when the national economy was in a difficult period, Metro postponed its network expansion plan, while focusing on goods trading.

Lawyer Le Thanh Kinh from Le Nguyen Law Firm said if the figures are accurate, Metro would have to pay major taxes, about 20 percent of the profits.

Reuters has quoted its two sources as saying that the transfer deal will boost Metro's earnings before interest and taxation (EBIT) in the 2014/15 fiscal year by about 400 million euros.

Bloomberg also asserted that the transfer deal will help Metro raise its EBIT by hundreds of millions of euros this year.

Many people are are eager to know how much Metro will have to pay in assignment duty before it leaves Vietnam.

Vietnam did not collect any dong in corporate income tax from Metro over the last 12 years, since the distributor repeatedly reported losses, despite receiving many preferential incentives from authorities.

In the past, taxation bodies sometimes failed to collect assignment duties because of the legal loopholes the involved parties exploited to evade tax.

A lawyer said that in some cases the involved parties carry out capital transfer deals but acted as if they only changed the names of the members in business registration certificates.

In other cases, the sellers and buyers agreed to fool taxation bodies by declaring the same selling and cost prices to prove that transfer deals did not bring profits, and therefore, did not have to pay tax.

Metro, in the press release, said that it would obey the laws and the decisions made by Vietnamese governmental agencies.

TBKTSG