20 August 2018, story by George Turner, an investigative journalist and researcher
ConocoPhilips and Perenco, two multinational oil companies, have launched a pre-emptive legal strike, seeking to stop Vietnam from collecting an estimated $179m in taxes on the profits made from the sale of oilfields in the country. In 2012, two UK-owned subsidiary companies of ConocoPhilips sold the oilfields to Perenco, paying no capital gains tax..This was due to “substantial shareholder exemption” rule that exists in the UK, meaning profits on the sale of shares in subsidiary companies are not subject to capital gains tax in Britain. However, Vietnam has the right to do so under the terms of the UK-Vietnam tax treaty. The dispute will be heard at a secretive but powerful international court managed by the UN. The result could mark a significant shift in the way multinationals attempt to avoid paying taxes to poorer countries.