New law strengthens tax collection from social network providers
New law strengthens tax collection from social network providers
The revised Law on Tax Management, passed by the National Assembly, sets out regulations to collect taxes from Google, YouTube, Facebook and the like from July 1 next year, even if they do not open representative offices in Vietnam.
According to statistics from Google and Singapore’s investment firm Temasek, Vietnam’s revenue from the digital economy reached US$9 billion last year, and the figure is expected to increase to US$30 billion by 2025, Thanh Nien newspaper reported.
Meanwhile, market research firm ANTS reported that the country spent US$550 million on online advertisements in 2018. However, domestic enterprises, such as VCCorp, Zing and 24h, earned only US$150 million, while the remaining was pocketed by social network providers, such as Google, Facebook and YouTube.
Therefore, these providers must be forced to directly declare and pay taxes in Vietnam or must authorize their representatives in Vietnam to do their jobs in line with the revised Law on Tax Management.
Luu Duc Huy, director of the Policy Department, under the General Department of Taxation, said that the general department will develop a tax declaration and payment process for social network providers and publish it on its website.
The State Bank of Vietnam needs to set up a system to manage and oversee online payment transactions. The move is meant to assist State management authorities in reporting cross-border services in the ecommerce sector.
Meanwhile, commercial banks may have to pay taxes on behalf of overseas individuals and organizations that have generated revenue from ecommerce activities in Vietnam if they have so far failed to fulfill their tax obligations.
They must also provide account details of taxpayers to tax authorities within 10 working days of receiving the taxman’s request. These details include their customers’ personal information, transactions and account balances.
In response to objections that customers’ information cannot be provided to tax agencies, Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultants' Association, stated that the tax agencies are responsible for ensuring the security of taxpayers’ information.
According to Pham Dat, director of Fado.vn, a firm trading on Amazon, tax agencies should set up a cross-border ecommerce database center, allowing all tax bodies, customs agencies and banks to access and use data from the center.
