Recently, an online conference reporting on the tax sector's performance in the first half of 2022 took place on June 30th. Mr. Thai Minh Giao, Deputy Director of the Ho Chi Minh City Tax Department, stated that in the first six months of the year, four banks provided the tax authorities with information on individuals and organizations receiving income from Google. The total amount received from overseas was over US$51,2 million and VND 21,4 billion.
Collect taxes from individuals and organizations with income from Google.
The Ho Chi Minh City Tax Department has processed tax collection and late payment penalties against 38 individuals with income from Google, totaling 169 billion VND. Specifically, the District 7 - Nha Be Tax Office recently collected and fined 31 billion VND from one individual who earned a substantial income from Google but failed to declare and pay taxes. Additionally, three businesses were also subject to tax collection and late payment penalties totaling 327 million VND.
In addition, Mr. Giao also stated that the inspection results resulted in the collection of back taxes and penalties totaling 24,3 billion VND from a Google partner company in Vietnam (commonly known as an MCN – Multi-Channel Network) responsible for managing YouTube channels that produce their own digital content in Vietnam.
"Through inspections of partner companies, the tax authorities have uncovered additional domestic organizations and individuals providing online services to foreign organizations that have not yet declared and paid taxes," Mr. Giao said.
Requests and proposals from the Ho Chi Minh City Tax Department.
To manage e-commerce activities on digital platforms, the Ho Chi Minh City tax authorities have implemented a comprehensive set of solutions to enhance effective tax collection management.
- Enhance the legal awareness of individuals and organizations to voluntarily fulfill their tax declaration and payment obligations as prescribed by law through propaganda and guidance measures.
- Establish a mechanism for providing information and conducting periodic inspections of logistics and delivery service providers, especially those offering cash-on-delivery (COD) services to e-commerce businesses, for the tax authorities.
- Businesses that own e-commerce platforms are required to urge organizations and individuals providing services and goods on these platforms to fulfill their tax obligations in full.
- Annually, the inspection and audit plan will include at least 50% of businesses that own e-commerce platforms located in Ho Chi Minh City.
At the online conference, representatives from the Ho Chi Minh City Tax Department proposed that the City People's Committee request the State Bank of Vietnam to direct the provision of transaction data on money transfers from abroad to domestic organizations and individuals who receive income from foreign organizations (Google, Apple, Netflix, etc.) for providing services on digital platforms.
According to Decree 126/2020/ND-CP, the Tax Department requires banks to deduct the tax payable by foreign organizations providing cross-border services that generate income in Vietnam before transferring money abroad, such as: Google; Apple (cloud data storage, Apple Music (online music streaming); Netflix (online movie streaming), Agoda, Booking.com (online hotel booking).
In the first six months of the year, the Ho Chi Minh City Tax Department estimated that it collected 169.924 billion VND, reaching 63% of the 2022 budget target, a 21% increase compared to the same period in 2021. State budget revenue collection is progressing well compared to the budget target and the same period last year, with some revenue sources showing the recovery and development of businesses in the area, such as VAT (up 15,6%) and corporate income tax (up 8,6%) compared to the same period.
