Minister of Finance Ho Duc Phuc has just signed a report to the National Assembly deputies on a number of issues related to the group of issues questioned at the 3rd session of the 15th National Assembly. According to the meeting agenda, Minister Ho Duc Phuc will sit in the “hot seat” to answer questions about the financial sector.
The report of the Ministry of Finance mentioned tax management for business activities on digital platforms. Regarding tax collection management for cross-border goods and services, according to current regulations, tax is collected through organizations in Vietnam (tax paid on behalf of foreign contractors) with an average revenue of over 1,100 billion VND/year.
From 2018 to the end of April 2022, these units have declared and paid taxes with a total amount of more than 5,111 billion VND, of which some large corporations such as Facebook is 1,965 billion VND; Google is 1,902 billion; Microsoft is 651 billion dong.
Tax authorities increase revenue, prevent tax loss from digital platforms
Also according to the Ministry of Finance, in 2018, tax revenue from cross-border e-commerce and digital services reached VND 770 billion; in 2019 reached 1,168 billion dong; 2020 will reach 1,143 billion VND, in 2021 it will reach 1,591 billion VND, in the first 4 months of 2022 it will reach 437 billion VND.
Regarding tax collection management for Vietnamese organizations and individuals that have income from providing cross-border digital services, e-commerce business activities, accumulated until the end of April 2022, the tax authority has revenue from handling violations and preventing loss of revenue is about 735 billion VND (the revenue in the first 4 months of 2022 is 176 billion VND).
However, the Ministry of Finance pointed out that the characteristics of the digital economy and the rapid development of e-commerce in Vietnam have posed many challenges for tax administration.
Specifically, in the context of the digital economy, organizations and individuals can conduct cross-border business activities without being taxed by any country according to traditional tax management principles, All countries are based on the physical presence of taxpayers, while businesses and individuals can distribute income to the most tax-friendly locations according to the regulations of each country.
Another difficulty pointed out by the Ministry of Finance is the inability to determine the tax base. In the digital environment, business activities can be carried out through a website present in a certain market area without the need for the physical presence of taxpayers there. Typical for this activity is online advertising and interactive activities through the platform of social networks.
The Ministry of Finance also emphasized the difficulty when not clearly distinguishing the type of income as a tax base. According to the agency, in the digital economy, it is difficult to distinguish certain types of income, especially royalties, service fees and business profits. A typical example is revenue related to software, digital information content products, applications posted on the Internet, … it is difficult to determine the amount paid for copyright, service fees or profits. business profits.
The Ministry of Finance also acknowledged that it is difficult to control business transactions to manage tax collectors for e-commerce business activities. Because the e-commerce business owner does not need to go to the store or shop in the traditional way, the transactions are completely done electronically, the server can be located in a foreign country. many stalls on 1 trading floor…
In addition, controlling cash flow is also not easy. Along with the development of the digital economy, non-cash payment methods are also very diverse such as: payment via bank, electronic payment, peer-to-peer payment (P2P), electronic money. ..
The Ministry of Finance said that in Vietnam, it is more difficult to control domestic e-commerce business transactions when the payment system in the form of COD (cash on delivery) is applied more commonly than other commercial banks. non-cash payment method.
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