Vietnam ministry strengthens tax administration for e-commerce

30 major service providers, including Microsoft, Facebook, Netflix, Samsung, TikTok, and eBay, have registered, declared themselves on the Portal, and paid taxes totaling around $22.2 million.

According to the Ministry of Finance's data, the amount of contractor tax collected from 2018 to the present from e-commerce transactions made through Vietnamese enterprises was VND 5,588 billion ($229 million)

In particular, starting in 2021, when the annual revenue would be roughly VND 1,591 billion ($65 million), up 39% from 2020, the average revenue will reach 130%.

Some global merchants, including Facebook at VND 2,099 billion ($86 million), Google at VND 2,114.6 billion ($86.7 million), and Microsoft at VND 714 billion ($29 million), are authorized to report their income and pay taxes in place of making substantial contributions to the state budget.

The Ministry of Finance acknowledged that managing taxes for online retailers still presents significant administrative challenges.

By the end of August 2022, the tax authorities had accumulated VND 1,082 billion ($44 million) from addressing infractions and averting income loss for Vietnamese businesses and people who are self-employed through online sales.

It is challenging to identify between different forms of revenue in the digital economy, particularly royalties, service fees, and company profits. It is also challenging to oversee business transactions and supervise tax collectors for e-commerce business operations.

The Ministry of Finance also noted that the cash-on-delivery (COD) payment method makes it challenging to manage cash flow.

It was suggested that various regulations be changed in order to achieve agreement on tax administration. Additionally, the administration of taxes and the information technology framework for tax declaration, payment, and collection will be enhanced.

the taxman will create a database to manage risks in e-commerce, use artificial intelligence (AI) to analyze data, give warnings, create a smart tax management system, and step up inspections of e-commerce services, paying particular attention to those offered by foreign companies.

Source: Nguoi Lao Dong