On November 27th, the Vietnam Chamber of Commerce and Industry (VCCI), in collaboration with the Ministry of Finance, organized a conference in Ho Chi Minh City to listen to the opinions of businesses in the South regarding tax and customs policies and administrative procedures in 2020.
One of the focal points of the conference was the issue surrounding Decree 126, which stipulates that commercial banks are obligated to provide customer account information to the tax authorities.
Regarding this matter, the General Department of Taxation affirms that individuals conducting online business on e-commerce platforms and digital platforms such as YouTube, Google, etc., must declare and pay taxes. Accordingly, individuals with income from activities on cross-border advertising service platforms in Vietnam will be subject to retroactive collection of taxes that have been evaded for a long time.
Mr. Dang Ngoc Minh (Deputy Director General of the General Department of Taxation) further explained that, in reality, the income generated through online platforms is very large. Therefore, the regulation requiring commercial banks to provide customer account information to tax authorities aims to support the review and collection of income tax from individuals doing business online, ensuring fairness between traditional businesses and businesses on digital platforms.
YouTuber worried about being charged back taxes.
Many content creators (especially YouTubers), online sellers (on Facebook, Google, etc.), and freelancers have expressed concerns about the regulations in Decree 126. These concerns include the possibility of individuals being subject to back taxes and the potential leakage of personal information by commercial banks.
Some YouTubers share that if they receive money directly from YouTube (via Western Union – an international money transfer service headquartered in the US), most YouTubers have already paid taxes to avoid potential back taxes later. However, if they receive money through an intermediary company, the company handles the tax payment, so they don't worry too much about it.
Discussing the issue of information security when collecting taxes from individuals doing business online.
Following government regulations allowing heads of tax authorities to request banks to provide transaction information, account balances, etc., individuals and businesses without any tax violations are expressing dissatisfaction with the disclosure of their personal information and transaction history to third parties.
They hope that the process of providing and handling information between the two parties will also be transparent so that the public can feel secure.
Regarding security when providing customer account information to the tax authorities, Mr. Minh further explained that the tax authorities have a great responsibility to maintain the confidentiality of all information of each individual and business, including revenue, tax amounts, private information, etc., not just bank accounts.
On the other hand, requesting users' bank account information is consistent with international practice. “Banks cannot cite customer confidentiality as a reason to evade their responsibility to provide information to the tax authorities, because the tax authorities use this information to monitor citizens and businesses to ensure they fulfill their tax obligations to the state budget. Previously, banks in Switzerland maintained 100% confidentiality, but this regulation no longer exists.”
Also at the conference, Mr. Chung Thanh Tien, Director of Dong Hung Accounting Services Co., Ltd., asked: "What solutions does the Ministry of Finance have to support businesses in 2021 when the economic situation remains difficult?" Mr. Nguyen Quoc Hung, Deputy Director of the Tax Policy Department (Ministry of Finance), replied that during the Covid-19 pandemic outbreak, the Ministry of Finance reported to the Government and the National Assembly to propose a series of solutions to support businesses and people.
In 2021, the Ministry will continue to closely monitor the situation, conduct research to further extend the deadlines for tax and land rent payments, and explore expanding the scope of tax extensions. For industries that continue to be affected by the pandemic, the Ministry of Finance will advise the Government and the Standing Committee of the National Assembly to further reduce environmental protection taxes, cut other fees to reduce input costs, and continue proposing reductions in corporate income tax, etc.
