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Billions of US dollars in revenue, but tax evasion in Vietnam
Said the General Department of Taxation, there are 15 global big corporations and technology companies operating across borders earning money "full of pots, full of bowls" in Vietnam. In which, Vietnam's sole online advertising revenue is about USD 1 billion, Google and Facebook duo accounts for more than 80%, or more than USD 800 million, according to the report of Vietnam Digital Marketing Trends 2021.
Despite billions of USD dollars in annual revenue, Vietnam tax amount is collected from the 15 corporations is very meager, it is VND 1,000 billion/year only. Particularly, this amount is not paid by such corporations, but it is forced to be paid by contractors and agents by declaration and payment of contractor tax through a paying organization in Vietnam. “The figures from statistics show that, from 2018 to the end of October 2021, these entities have declared and paid taxes with a total amount of more than VND 4,263 billion, of which more than VND 1,641 billion from Facebook; more than VND 1,573 billion from Google; more than VND 560 billion from Microsoft … In 2020, tax revenue from cross-border e-commerce activities gained over VND 1,143 billion”, said Ms. Nguyen Thi Lan Anh, Tax Administration Department of Small and Medium Enterprises, Business Households, individuals (General Department of Taxation).
For 2021, the tax collected from Vietnamese entities signing online advertising contracts with foreign entities that do not have legal entities in Vietnam such as Google, Youtube, Facebook with VND 1,314 billion, in which, VND 521 billion from Facebook, VND 490 billion from Google, VND 164 billion from Microsoft...
Said Assoc. Dinh Trong Thinh, an economist, "the tax revenue is not commensurate with the revenue and potential of e-commerce". With a cross-border operation model, there is no managing legal entity in Vietnam, it is very difficult to manage, monitor and collect information and data, conduct tax declaration, tax calculation and payment are not accurate and this is actually a tax evasion act…
Said Mr. Nguyen Thanh Lam, Director of the Press Department (Ministry of Information and Communications), the data on information reader and shopper behavior is in the hands of cross-border technology platforms, resulting in the most of the advertising costs flows into foreign technology companies.
Accordingly, the domination on advertising economy of foreign social networks or cross-border advertising networks not only loses the great resources to improve the advertising industry, but also make Vietnamese enterprises’ ads sometimes appear next to crappy, low-quality content, not to mention that illegal advertising content may appear on official websites.
What to do to collect properly and sufficiently?
Said Mr. Nguyen Thanh Lam, it is necessary to master technology so that user data is not controlled by foreign enterprises, thereby regulating advertising resources on good and healthy content to serve users. In 2022, the Ministry of Information and Communications will continue to coordinate with the relevant ministries and branches to synchronously deploy the economic solutions, techniques to request the cross-border social networks to comply with Vietnamese laws on handling information violations, tax payment in Vietnam.
Said the General Department of Taxation (Ministry of Finance), one of the 2022 key tasks of the tax industry is to synchronously implement the solutions in tax management for e-commerce activities, business based on digital platforms of foreign suppliers who do not have their business establishment in Vietnam.
Accordingly, the General Department of Taxation will continue to request the local tax departments to actively review data on organizations and individuals earning income from such social networking sites as Google, Facebook, Youtube…, for notice of tax declaration and payment requirements. In case organizations and individuals intentionally fail to declare and pay taxes, the tax authorities shall coordinate with commercial banks in retrieving cash flows, paying, inspecting and strictly handling the cases in accordance with law.
“The Ministry of Finance has signed a cooperation agreement with the Ministry of Industry and Trade, including the content of coordination in formulating and perfecting the law in the e-commerce field. On the basis of the cooperation agreement, the Ministry of Finance (General Department of Taxation) and the Ministry of Industry and Trade will conduct connection database sharing to exploit information to serve the state management of domestic e-commerce business activities," said Ms. Lan Anh.
The General Department of Taxation also proposed the Ministry of Finance to develop the cooperation and coordination programs with the Ministry of Public Security and the State Bank of Vietnam on the connection and sharing mechanism of databases for tax administration. Tax authorities will continue to upgrade and develop the connection and integration database system between the banking system and digital platform providers to capture tax management objects, number of transactions, sales and payable taxes, especially for cross-border transactions, commercial transactions on digital platforms, and online business.
A leader of the ministerial and branch level used to reveal that the across-border "giants" are constantly putting the pressure through diplomatic and economic routes so as not to have to open offices and set up servers in Vietnam. Vietnam applied flexible solutions, in line with international practices and laws, but there will also be more tough "sticks" to force the across-border “giants” to comply with the game rules.
Source : Baodautu
