Online sales on Facebook (Illustrative image. Source: internet)Hanoi (VNS/VNA) - The COVID-19 pandemic has become a golden opportunity fore-commerce trading floors, as well as social networks such as Facebook.However, the country has lost billions of dong in tax revenue due to e-commerceas there are no specific regulations on the sector.
During the pandemic, owners of these platforms have seen business increase aspeople stay at home and spend more online.
Streaming platforms are also becoming more popular, including Iflix ofMalaysia, WeTV of China and Netflix from the US.
In Vietnam, Netflix started providing services from early 2016 withpackages ranging from 180,000 VND to 260,000 VND per month. The total number ofpaid subscribers in Vietnam has reached over 300,000, meaning Netflix couldearn hundreds of billions of dong from the country. However, most Netflixsubscribers in Vietnam register to use the service and pay fees online or bycredit card.
Nguyen Duc Huy, Deputy Chief Officer of the General Department of Taxation,told Tien Phong (Vanguard)Newspaper that Netflix has not set up a branch in Vietnam yet. This enterprisehas not done the necessary procedures to obtain a license to provide online TVservices in the country, leading to tax losses. However, the tax industry doesnot have specific sanctions for this case.
Deputy head of the Hanoi Taxation Department Vien Viet Hung told the newspaperthat more individuals are earning an income from YouTube, Facebook and appmarkets such as the Google Playstore and iOS Appstore. According to Circular92/2015/TT-BTC guiding the implementation of the Law on Value Added Tax (VAT)and Personal Income Tax (PIT) for resident individuals having businessactivities, individuals with income from a business with turnover from 100million VND a year or more must pay tax. Individuals receiving income fromFacebook, Google and YouTube are classified as business individuals, paying taxat the rate of 5 percent VAT and 2 percent PIT.
The department identified more than 1,100 individuals operating in software,electronic services and online games had a total income of 4.8 trillion VND inthe last three years (2016-19). Of which one person had an income ofup to 140 billion VND. As of July 24, more than 100 individuals registered,declared and paid more than 10 billion VND in PIT and VAT on total revenue ofmore than 151 billion VND. However, the department assessed that the proportionof individuals earning income from e-commerce activities voluntarilyimplementing tax obligations was still low.
Dang Ngoc Minh, deputy director of the General Department of Taxation said thetax industry has cooperated with relevant agencies to control the money flowtransferred from abroad to local organisations and individuals. At the sametime, through inspections, the General Department of Taxation has collected ahuge amount of tax.
In Hanoi, since 2017, the tax department has reviewed and sent SMSnotifications to 13,422 Facebook accounts involved in online sales. Up to now,over 2,000 individuals have registered and were issued with a taxidentification number used to declare and pay taxes. The total taxes and finescollected from this type of business totalled more than 22.7 billion VND.
For organisations and individuals with incomes from foreign social networks(Google, Facebook, YouTube), through data from joint-stock commercial banks,there were more than 18,300 opening accounts at banks with a total income of 1.46trillion VND.
The total amount of tax, fines and late payment interest collected from accountson foreign social networks was about 14 billion VND.
He said the department is inspecting service providers selling throughe-commerce. They collected a list of 9,510 cases of business activities on thee-commerce floors provided by a firm with the total amount arising fromwithdrawals of 211 billion VND.
For house rental activities, specifically organisations and individuals postinginformation through foreign websites, the tax authority has reviewed 483addresses. Of which, 107 organisations have paid about 9.4 billion VND while 68individuals have paid 634 million VND.
Minh said, in 2019, the General Department of Taxation inspected and discoveredthat one individual received 41 billion VND from Google for providingadvertising services on a game, but had not declared or pay tax. Theinspection team retrospectively collected and fined more than 4 billion VND.
In order to properly and fully manage and collect taxes from organisations andindividuals in e-commerce and online services, he said that the tax departmentwill co-ordinate with the Ministry of Public Security and the Ministry ofInformation and Communications to identify taxpayers. They would also collectdata from shipping companies, intermediary apps, banks and e-wallets todetermine cash flow. The General Department of Taxation would thus bettermanage taxes for organisations and individuals./.
VNA
