Foreign direct investment (FDI): Declaring loss to avoid taxes

Typically, a garment company from Taiwan, has declared losses in many years, but revenue and scale operations have grown up 10 times. When the Department of Taxation detected this situation and asked the companies for explanation, the business results in 2009 in 18 of 20 companies was profitable. Even some companies themselves have committed to declare profits.

In 2008, among 1254 FDI companies filing tax reports there was 708 companies reporting losses (accounting for 61.35%). Company reported losses are mostly Asian companies, led by South Korea (up 30% of enterprises reported losses), Singapore (12.57%), Japan (9.04%), Taiwan ( 7.49%). These “Losses” enterprises mostly runs bussines in manufacturing technology, media, clothing, leather shoes ...
The question is whether a story of "transfer peicing" from companies with FDI in the parent company abroad, as compared with garment section and at the same time, FDI enterprises reported losses, most VN clothing companies have interest.

FDI enterprises reported losses have common features, this company has customers and suppliers are companies within the network or its parent company abroad, particularly in countries, territories where income tax rate in business with no, or lower tax rates than in Vietnam.