Launching a new tool, Google, Facebook, Netflix are ready to pay taxes
Since Circular 80, major cross-border service providers such as Google, Facebook, and Netflix have all expressed their support and are willing to pay taxes.
After three months, since Circular 80/2021/TT-BTC took effect, on March 21, the General Department of Taxation held a ceremony to announce the Portal for overseas suppliers ( Etaxvn.gdt.gov.vn) and deploying Electronic Tax Application on mobile platform (eTax Mobile).
The implementation of this new regulation will remove obstacles about the legal framework for many years cross-border business can directly pay tax on revenue from transactions with individual Vietnamese customers.
Mr. Nguyen Van Phung, Director of the Large Corporate Tax Department (General Department of Taxation) shared around this issue.
|Mr. Nguyen Van Phung|
Mr. Phung said: In recent years, a number of foreign enterprises have provided services to the Vietnamese market by cross-border method. However, we only collect the tax through the contractor tax mechanism.
According to the provisions of Circular 103/2014/TT-BTC guiding the tax obligations applicable to foreign organizations and individuals doing business in Vietnam or earning income in Vietnam, foreign organizations receive income from Vietnam through the sale of goods and services into Vietnam must be obliged to pay tax. With this regulation, since 2014, we have had regulations to assign tasks to Vietnamese organizations such as banks, advertising service providers, etc., when paying foreign parties, they must Withholding tax is called contractor tax.
However, this regulation has not yet collected tax from transactions between cross-border enterprises and customers who are individual users in Vietnam. For example, Netflix Company provides a service, the money of individual users will be paid directly to the company, so no tax has been collected. Thus, although Vietnam has a legal framework for taxing these units, the regulations are incomplete, leading to certain limitations in enforcement.
Aware of these inadequacies, the Ministry of Finance has developed a Law on Tax Administration and guiding Decrees and Circulars to overcome shortcomings in cross-border tax collection. This tax administration law has created a big turning point in tax administration for activities ecommerce (E-commerce), especially foreign suppliers that do not have a presence in Vietnam, create a solid legal framework for tax authorities as well as ensure a fair business environment.
– How will the tax collection here be implemented, sir?
In addition to the above legal documents, the Ministry of Finance has reported to the Government the tax administration project for e-commerce. The project is elaborately built, has many specific solutions, and is being actively implemented.
Especially, for foreign suppliers, we apply two mechanisms in parallel. One is a foreign contractor tax mechanism, the other is an electronic portal for foreigners to declare directly.
But we recommend that the mechanism of submission through the Portal will be better and more transparent. Through the portal, foreign enterprises providing services in Vietnam will declare and fully pay taxes to state management agencies. This portal will overcome the situation that previously foreign enterprises did not know where to declare and pay taxes.
|Portal for overseas suppliers launched on March 21|
– How will the portal work, sir?
The portal is built and managed by the Large Corporate Tax Department, along with other functional departments. The portal will help foreign businesses that do not have a presence in Vietnam to register, declare and pay taxes.
After successfully completing the tax registration procedure for the first time, the Portal sends information about the electronic transaction account and tax identification number to the registered taxpayer’s email address to carry out the procedures. about taxes on the Portal. Based on the percentage of revenue received, the enterprise will pay the corresponding tax amount including value-added tax and corporate income tax to the tax authority.
In addition, the Portal also has the function of looking up information stored on the system, serving the periodic inspection activities of the tax industry.
– How do you expect this system to improve tax collection for this sector?
In the past time, the tax industry has collected nearly 5,000 billion VND from business activities on the internet, mainly through the contractor tax mechanism. With the new tax collection mechanism, this number will continue to increase, estimated at 20-30% per year.
During the working process, we noticed that since Circular 80, major cross-border service providers such as Google, Facebook, Netflix have all expressed their support and are willing to pay taxes. Businesses all affirmed that this tool will bring benefits to all parties because of its clear policies, transparent processes, convenient procedures, and tools for checking, declaring and paying taxes. They also understand that, if they want to do long-term business in a country, they must comply with tax obligations.
In the management work, we will take professional tax measures to inspect, control and determine the obligations of each party according to their assigned functions and tasks.
– Thank you Sir!
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