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|A manufacturing line in the Kido factory|
According to the audited financial statement of Kido, in a recent inspection, the Binh Duong Department of Taxation identified tax arrears at Mondelez Kinh Do, which used to be a subsidiary of Kido. The arrears were accumulated before the time MIA bought the company from Kido, thus, MIA wants Kido to pay the tax arrears, according to the contents of the purchase contract between the two parties.
The representative of Kido explained that in 2000, Kido (formerly called Kinh Do) invested in a factory in Binh Duong and this factory enjoyed a special tax incentive (which was a general policy for enterprises investing in Binh Duong at the time).
In 2014, Kinh Do invested more capital to buy machines and technology lines to expand the operations and the accountant jotted down this added investment on the list of investments still subject to the incentive given for the initial investment. (It needs to be added that in 2000-2014 the company still enjoyed the special tax incentive for the initial investment.)
However, after five years (2019), the Binh Duong Department of Taxation conducted an inspection into enterprises tax payments and removed Kinh Do’s added investment from the list which can enjoy the incentive.
Kido had to make a retrospective adjustment by increasing its short-term expenditures and decreasing the undistributed profit at the time of December 31, 2017 by approximately VND15.4 billion ($669,565).
In August 2016, MIA acquired the remaining 20 per cent stake in Kinh Do Corporation for VND2 trillion ($90 million) after the purchase of 80 per cent for $370 million in November 2014.