The Ministry of Planning and Investment (MPI) will finalise a draft resolution this month to improve the management and use of foreign direct investment (FDI).

Do Nhat Hoang, Head of the MPI’s Foreign Investment Agency, told the press on January 4 that the resolution is needed to combat transfer pricing (selling goods or services among company divisions in different countries, often used as a means to evade taxes), which remains a challenge for Vietnam, and curtail the growing black list of FDI businesses that report losses year after year while keeping expanding production.

Under the draft, ministries and agencies will coordinate with each other to define specific criteria to attract beneficial FDI and do away with poor performing FDI projects.

The draft will regulate the responsibilities of each agency and introduce a post-licence inspection, examination and supervision mechanism across all levels of authority to make FDI management effective.

According to Hoang, the MPI has submitted an anti-transfer pricing project to the Government. However, as this is a complex field involving tax, custom and corporate management, the Government has assigned the Finance Ministry to coordinate with the MPI to work out specific measures for implementation.

He noted that in the coming time, the two ministries will complete a legal framework to prevent transfer pricing, train experts to handle transfer pricing issues and build an international price comparison database.

First of all, the two ministries will work together this year to issue legal regulations to prevent transfer pricing as early as possible and continue conducting inspections, Hoang said.

The MPI reported 1,100 newly licenced FDI projects and 435 additional capital projects between January 1 and December 15, 2012, with total capital exceeding 13 billion USD. Japan was the largest investor with 5.13 billion USD.

Vietnam expects to attract 13-14 billion USD in foreign direct investment (FDI) this year.-VNA