(Yicai) June 17 -- Some Chinese listed companies, including Bohui Chemical Technology and V V Food and Beverage, said that they will face financial impacts due to up to 30 years of back taxes from changes in tax policies, collection of unpaid taxes, and low transaction prices.

V V Food's unit Hubei Zhijiang Liquor Industry needs to pay CNY85 million (USD11.7 million) to tax authorities after failing to make tax returns by the required deadlines for consumption taxes from Jan. 1, 1994, to Oct. 31, 2009, making it the first firm to be pursued for 30 years of taxes, the parent company announced on June 13.

However, the tax watchdog in Yichang, China's central Hubei province, denied requiring 30 years of tax payments, noting that it was just a standard recovery of taxes.

Changes in tax policies and incorrect understanding are the main reasons companies have to pay back taxes, an expert told Yicai, adding that the low prices of related transactions are also a reason for such problems.

More companies have subsequently announced requirements to make tax payments for past years.

Bohui Chemical said that due to tax changes, relevant authorities required it to pay consumption tax on 'heavy aromatic derivatives' under 'heavy aromatics' starting last July. The firm suspended production at main facilities on June 12 and will cut salaries and begin layoffs, it noted, adding that it may lose CNY300 million (USD41.3 million) of profits for last year and CNY200 million for the three months ended March 31.

PKU HealthCare said it paid CNY13.8 million (USD1.9 million) in taxes from 2019 to May 31, last year, after a self-inspection. ChinaLin Securities needs to make CNY29.3 million in corporate income tax payments from 2018 to 2021 and bear the corresponding overdue payment due to the lack of clear application rules for local tax preferential policies in the early stage, resulting in a CNY47.3 million dent in its profit this year.

Shunho New Materials Technology will lose CNY8 million (USD1.1 million) of its profit this year due to remedial payments of value-added taxes on the transfer of financial commodities and urban construction tax and surcharges, it announced. Shenzhen Liantronics' profit will suffer a CNY40 million drop after underpaying CNY19.8 million for its 2017 corporate income tax and overdue payments.

If the taxation process is unclear, without confirmation from relevant authorities, the development situation and the economic environment of a company should be considered and not solely focus on short-term benefits, the expert noted.

Editor: Martin Kadiev