Close-up of bird's nest business issuing invoices of over 34,000 billion VND in 7 days

On July 22, responding to VTC News, a representative of the Ho Chi Minh City Tax Department said that the enterprise that issued an invoice of 34,000 billion VND in 7 days was Hubnest Bird's Nest Company Limited.

This enterprise was established on October 11, 2022 with tax code 0317512399. Hubnest Bird's Nest Company has a registered address at 435R Pham Van Dong, Ward 11, Binh Thanh District. The representative is Ms. Pham Thi Huong (born in 1992, residing in District 10, Ho Chi Minh City). The charter capital of the enterprise is 2.5 billion VND and has only 1 employee.

Close-up of bird's nest business issuing invoices of over 34,000 billion VND in 7 days - 1 — The registered business location of Hubnest Bird's Nest Company Limited in Binh Thanh District has issued invoices worth more than VND34,000 billion in 7 days. (Photo: Chau An)

The business lines of Hubnest Bird's Nest Company are wholesale of food (not operating at headquarters); wholesale of beverages; retail of food, foodstuffs, beverages, cigarettes, and tobacco; retail of food in specialized stores; retail of beverages in specialized stores.

According to VTC News reporters, the registered business address of Hubnest Bird's Nest Company is a 3-storey house with a width of about 3.5 m. This is also the business location of another enterprise.

Close-up of bird's nest business issuing invoices worth over 34,000 billion VND in 7 days - 2 — The house at 435R Pham Van Dong is also the business location of another enterprise. (Photo: Chau An)

According to the Ho Chi Minh City Tax Department, the value-added tax (VAT) declaration data for the first quarter of 2023 of Hubnest Bird's Nest Company shows that this enterprise has issued 6 electronic invoices and declared revenue of 34,567 billion VND, with no VAT payable.

According to the Ho Chi Minh City Tax Department, the Binh Thanh District Tax Department has made an initial report to this unit about the incident. Specifically, the content of the enterprise's invoice shows "VN30F2210 index futures contract October 2022; VN30F2211 November 2022; VN30F2212 December 2022; VN30F2301 January 2023; VN30F2302 February 2023; VN30F2303 March 2023". In the buyer's name section, it shows "customer did not take invoice".

Although the input invoice did not generate VAT, the enterprise determined the purchase value on the VAT declaration through the detailed transaction list of a large securities company headquartered in District 1, Ho Chi Minh City. After checking the system and discovering that the enterprise had issued electronic invoices with "huge" revenue, the Binh Thanh District Tax Department invited the enterprise to explain its operations.

According to the company's explanation to the tax authority, Hubnest Bird's Nest Company trades in bird's nests but also engages in derivative securities trading with code VN30. This company conducts transactions through a large securities company using the order matching method.

Although the registered capital of the enterprise is only 2.5 billion VND, the revenue generated in the first quarter of 2023 is up to 34,567, tens of thousands of times higher than the registered capital. The enterprise said that because the capital turnover of the enterprise is large because the characteristic of derivative securities activities is a very large leverage ratio, 4 times the capital.

Specifically, a business can use 250 million VND in margin (equivalent to 25%) to trade a 1 billion VND futures contract and repeat the transaction many times a day.

Therefore, Hubnest Bird's Nest Company traded about 30,634 contracts, accounting for 0.5 - 0.7% of total market transactions, but the actual trading capital was only 4.38 billion VND.

Because Hubnest Bird's Nest Company has a new, unique business type with complex legal nature, the Binh Thanh District Tax Department has requested the Ho Chi Minh City Tax Department to direct, guide and decentralize management. However, the Binh Thanh District Tax Department proposed that the enterprise must still issue invoices according to regulations even though the income arising from derivative securities trading is not subject to VAT according to regulations.
Previously, as reported by VTC News, the Binh Thanh District Tax Department discovered that within just 7 days, a bird's nest company had continuously issued many invoices worth a total of more than 34,000 billion VND, equivalent to 1.5 billion USD.

Mr. Dang Khac Phuc, Head of the Binh Thanh District Tax Department, shared that when checking these invoices, the bird's nest invoice only had 40 million VND, the remaining more than 34,000 billion VND was exported to the stock market. The Tax Department sent a document to ask the securities company and reported to the Ho Chi Minh City Tax Department.

Mr. Phuc said that currently, businesses are very diverse in terms of industries, fields and business forms. Therefore, tax management also presents a series of risks, typically the illegal use of electronic invoices. Besides businesses that make profits in production and business activities, there are also a number of businesses that want to find profits outside of production.

According to Mr. Phuc, paying less tax also increases profits for businesses, this is tax evasion. From there, the supply and demand for invoices are created, leading to the formation of businesses that buy and sell illegal invoices.

In addition, tax officials do not have enough tools to check the issuance and use of electronic invoices and documents. Meanwhile, if using electronic invoices, businesses can have their headquarters anywhere and issue invoices worth thousands of billions of VND around the clock.

“ For businesses that issue electronic invoices, they can issue invoices across the border or at any time of the day. Thus, it is impossible for the tax industry to immediately detect violations,” said Mr. Phuc.

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