It’s unreasonable to ask e-commerce platforms to pay taxes on behalf of sellers: VECOM
It’s unreasonable to ask e-commerce platforms to pay taxes on behalf of sellers: VECOM
The Việt Nam e-Commerce Association (VECOM) has said that a proposal that e-commerce platforms declare and pay taxes on behalf of sellers is unreasonable and should be removed from the draft amended Law on Tax Management.
Asking e-commerce platforms to declare and pay taxes on behalf of sellers is inconsistent to the established regulations and international practices. — VNA/VNS Photo Đại Nghĩa |
The proposal that e-commerce platforms and logistics service providers be responsible for providing sellers' information should also be abolished from the draft, the association said.
These two proposals go against established regulations and international practices, it pointed out.
Asking e-commerce platforms to declare and pay taxes on behalf of sellers is inconsistent with the Law on Personal Income Tax (PIT) and the Law on Value Added Tax (VAT).
The Law on VAT does not allow tax deductions or refunds for business households and individuals, according to the association which said that the proposal, if not thoroughly studied, could create unfairness and burdens on business households and individuals who are already vulnerable in the e-commerce industry.
Requiring e-commerce platforms to declare and pay personal income tax on behalf of sellers is unprecedented in countries in the region and even worldwide, according to the association. Countries such as Thailand, Indonesia, Singapore, Malaysia, the Philippines, China and the US do not have such regulations. Sellers are responsible for their own tax obligations.
According to VECOM, these proposals will increase the burden and compliance costs for enterprises.
Currently, different PIT and VAT rates are applied for different subjects, goods and services. It is almost impossible for e-commerce platforms to automatically classify sellers, goods and services to calculate taxable income, which goes beyond the major operations of e-commerce platforms.
Doing so could require huge investments and weigh on operation costs for e-commerce platforms, as tax management agencies' workload would be transferred to the e-commerce platforms, which do not have the expertise needed.
This would cause uncertainty among businesses and will affect their competitiveness in attracting investments, especially as Việt Nam is making efforts to accelerate the digital economy with e-commerce as a major pillar, VECOM said, adding that any amendments must be carefully studied.
