To ensure fairness for all taxpayers and to curb tax evasion as is currently the case, the National Assembly has passed several amendments to the Law on Tax Administration, including provisions for taxing individuals with income from online sources such as Facebook, Google, YouTube, etc.
Dr. Mai Thi Anh Tuyet (member of the National Assembly's Economic Committee) stated that the estimated tax revenue loss from e-commerce activities in Vietnam amounts to billions of USD annually due to the failure of regulatory agencies to meet the tax management requirements for this type of business.
Typical difficulties include accurately identifying taxpayers, revenue generated, business scale, and transaction processes. Furthermore, most foreign network operators do not register their businesses and do not have official representative offices in Vietnam.
Therefore, in order to implement the new regulations strictly and effectively, this revised Tax Administration Law will also assign specific tasks to each agency such as the Ministry of Industry and Trade, the Ministry of Information and Communications, the State Bank of Vietnam, commercial banks, etc., to work together to manage taxes in the most effective way.
TAXING ONLINE INCOME
Individuals running online and traditional businesses.
In reality, online businesses and individuals, and even those operating traditionally, primarily use cash payments via "cash on delivery" without issuing invoices. Therefore, to manage revenue and determine the correct tax amount, tax authorities have established regulations for tax assessment for these entities.
According to regulations, individuals engaged in e-commerce must register their warehouses, business locations, etc., with the tax authorities. In addition, the promotion of Implementing electronic invoices – That is, using electronic invoices instead of paper invoices will help tax authorities manage the revenue of these individuals, even if payments are made in cash.
Individuals with income from Facebook, Google,...
For individuals in Vietnam For those who receive income from sources such as Facebook, Google, YouTube, etc., but fail to voluntarily declare and pay taxes, the tax authorities will closely coordinate with commercial banks in addressing this issue. Provide information to identify the source of funds.This ensures the prevention of tax evasion and avoidance. The law also clearly stipulates that commercial banks are responsible for providing information on account numbers based on the taxpayer's tax identification number when opening an account at the bank.
This applies to foreign individuals and organizations that earn income in Vietnam. According to the new regulations, for individuals in this category: Commercial banks are required to deduct and pay taxes on behalf of others. This is a requirement for organizations and individuals abroad engaged in e-commerce business that generates income from Vietnam. A new point is that the paying organizations are obligated to deduct, declare, and pay the fees on behalf of the individuals or organizations making the payments.
Organizations like Facebook and Google do not have representative offices in Vietnam, but they still conduct their operations through organizations and businesses in Vietnam. Therefore, the tax authorities will have solutions to deduct and declare taxes through these organizations.
Regulations on Electronic Invoices
According to information from the draft mentioned above, the tax authorities are making efforts. Implement, develop, and refine the application. To support the issuance of electronic invoices with tax authority codes, the application has now become widespread and is being used in businesses. By 2022, the implementation of electronic invoices will be fully realized.
During the transitional period, before the nationwide implementation of electronic invoices, the regulations under Decree 51, which stipulate the use of paper invoices, will continue to apply, thus not affecting the operations of businesses.
For business households that do not have a computer to use the electronic invoice application, they can use a smartphone to download software or apps to create electronic invoices. Ms. Ta Thi Phuong Lan – Deputy Head of the Department of Tax Management for Small and Medium Enterprises and Business Households and Individuals (General Department of Taxation) added that the tax authorities will create conditions for business households to create electronic invoices using regular mobile phones.
