Launch of tax portal and application for cross-border digital trade platforms

VIETNAM, March 22 –

Representatives of the Ministry of Finance, the Ministry of Industry and Trade and the General Directorate of Taxes attend the launch ceremony of the Etax Mobile application. — Photo VNA/VNS Phạm Hậu

HÀ NỘI — From March 21, cross-border e-commerce platforms will be able to submit their tax declarations via a new electronic portal to or the Etax Mobile application under the direction of the Ministry of Finance.

The ministry ordered the General Tax Department to compile a list of all platforms operating in Việt Nam, their websites and registered addresses.

The General Department was asked to strengthen cooperation with foreign tax authorities to help platforms comply with Việt Nam’s tax regulations. In the event that violations have been found, General Service will work with the respective tax authorities to enforce the country’s tax regulations and penalties, if applicable.

The General Department said the platforms are expected to meet their value added tax (VAT) and corporate tax obligations based on their revenue generated from their operations in the country.

The new tax regime applies to platforms operating in Việt Nam without a registered address in the country, to individuals and companies in Việt Nam who do business with said platforms, to tax and accounting firms that represent said platforms under the legal jurisdiction of Việt Nam and commercial and intermediary banks. the payment services used by said platforms.

According to a report by the Ministry of Finance, tax revenue from cross-border e-commerce and digital services reached over VNĐ1.14 trillion ($49.5 million) in 2020 and VNĐ1.31 trillion in 2021 .

During a question-and-answer session with the National Assembly Standing Committee last week, Finance Minister Hồ Đức Phớc said that more than VNĐ5 trillion in tax revenue had been collected on the platforms in recent years. years, much of it with technology companies such as Facebook, Google and Microsoft. .

He said, however, the number was still miniscule compared to their revenue generated. Business reports from Google and Temasek indicate that Việt Nam’s digital commerce market grew by 16% in 2021 with a total revenue of up to $14 billion. The market is expected to grow by 29% per year on average during 2020-25. By 2025, the market is expected to reach $52 billion.

According to Nguyễn Thị Lan Anh, head of the General Directorate of Corporate Taxation.

“The application of tax regulations in digital business activities is very different from our traditional methods because almost all transactions are carried out electronically with servers located outside the territory. An operator can own several digital stores on the same platforms , on different platforms and on social media platforms,” she said.

The risk of losing revenue was high, as individuals and companies using social media platforms to conduct business often neglect to issue invoices and avoid paying taxes. Identifying offenders was a difficult task in itself because electronic transactions are often encrypted along with the identity of the owners.

“Companies that provide non-physical products like software, music, and consulting services are notoriously difficult to track because they don’t need the means to deliver products and services,” Hồ said. Ngọc Tú of the Institute of Financial Strategy and Funding of the Ministry of Finance. Politics.

Professor Lê Xuân Trường of the Academy of Finance said that in addition to policy reforms, the government must use technologies to counter tax losses. He urged the establishment of a task force dedicated to e-commerce activities.

“The long-term solution is an overhaul of tax regulations and built-in automation of tax regimes within the digital economy,” he said. —VNS

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