Sportswear giant Adidas made its debut in Vietnam in 1993, but only in 2009 did it officially set up Adidas Vietnam, a 100% foreign-invested company owned by Adidas International. It opened 50 shops across the country after just two years, employing 80,000 workers in all of its activities.
Adidas has few competitors in Vietnam, which helps to explain why it had earned more than US$1bn by early 2012. However, over the years, the sportswear manufacturer has repeatedly reported losses because the huge turnover has not offset high expenditure, reports VietNamNet Bridge.
In 2012, Adidas was added to a list of the enterprises suspected of conducting transfer pricing to evade tax. It then faced a tax inspection, which could not find convincing evidence, but did find many unreasonable expense items that had helped the enterprise declare losses; these included international marketing, management costs, goods procurement and royalties.
For the full story, see the October 2014 edition of Textiles South East Asia. Not a subscriber? Sign up HERE