Enterprises to manage tax risks with digital change
Enterprises to manage tax risks with digital change
Local companies should invest more time to learn more about new tax regulations, according to experts speaking at a seminar in Ha Noi last week.
More than 400 people from different businesses gathered at the seminar, organised by Ernst & Young Vietnam and Viet Nam CFO Club, to discuss how to better accommodate to increasingly stringent tax administration system driven by digitalisation.
According to the accounting experts, together with the effect from trade wars, political instability and rapid technology advancement in the world, the local tax policies have changes and reforms to reduce costs and better fit with the international standards.
The revised Tax Administration Law, which takes effect from 1 July 2020, introduces tax administration rules for e-commerce activities. Specifically, it introduces some new regimes on the implementation and management of taxes on the internet platform (e-tax). It also sets regulations on e-invoices, which requires goods sellers and service providers to issue e-invoices connected with the local tax system to their customers.
Many enterprises thought the changes affected their business and expressed concerns about new regulatory compliance, especially e-invoicing, transfer pricing and personal income tax.
Nguyen Kim Anh, an independent accountant told Viet Nam News: “There are a lot of things to update with the change. They (the tax officials) want to digitalise everything but we (enterprises) cannot have all things digital at once.”
Kim Anh, who does the tax for three small companies at the same time, added: “Though going with the changes is difficult, I have to keep updating with them and get familiar with the new system or I can no longer keep the job.”
Huong Vu, General Director, EY Consulting Vietnam explained: “The inspection activities will be more effective given the aid of advanced technology, businesses must be better compliant to avoid tax penalties."
As of August, Viet Nam has more than 734,000 businesses, or 99.4 per cent of all businesses using e-tax declaration services, 99.8 per cent of total operating firms, according to the General Department of Taxation.
The department said the e-tax refund service was also launched in 63 cities and provinces nationwide. It was estimated there were more than 5,500 businesses using the service so far this year with total value of more than VND50.4 trillion (US$2.17 billion).
In addition, 255 firms joined a pilot programme to use the e-invoice system. The total verified revenue of 825,078 e-invoices sent through the programme was more than VND19.35 trillion ($838.8 million), with total verified tax of nearly VND1.7 trillion (about $73.7 million).
