How much tax have Facebook and Google paid in Vietnam?

The Ministry of Finance has just sent the National Assembly a report on the implementation of Resolution 62 on questioning activities at the 3rd Session.

The agency said that tax revenue from cross-border and e-commerce platforms increased by an average of 130% over the past 3 years (2018-2021). Revenue in 2021 alone increased by 39% compared to 2020, reaching VND1,591 billion.

From 2018 to the end of August this year, through organizations in Vietnam (paying taxes on behalf of foreign contractors), these platforms declared and paid VND5,588 billion, with 88% coming from Facebook, Google and Microsoft.

Of which, Facebook paid 2,099 billion VND, Google paid 2,115 billion VND and Microsoft paid 714 billion VND. Thus, compared to June, the tax paid by these platforms increased by 410 billion VND.

In addition, by the end of August, tax authorities also collected VND1,082 billion in taxes from handling violations of Vietnamese organizations and individuals with income from e-commerce business.

In 2021, this amount was VND261 billion. In the first eight months of this year, this tax revenue continued to increase, doubling compared to 2021, reaching nearly VND521 billion.

Since late March, the ministry has operated the e-Tax Mobile e-Tax Portal and application for foreign suppliers to declare, register and pay taxes. To date, there have been nearly 70,000 transactions via commercial banks, with more than VND308 billion.

There are 30 large foreign suppliers (Microsoft, Facebook, Netflix, Samsung, TikTok, eBay...) registered, declared on the Electronic Information Portal and paid taxes, with a tax amount of about 22.2 million USD.

However, with the characteristics of the digital economy and rapid development of e-commerce, cross-border business tax management and collection face many challenges, according to Finance Minister Ho Duc Phoc.

First, it is difficult to determine the basis for tax calculation, clearly distinguishing income as the basis for taxation... This agency believes that it is very difficult to distinguish some types of income, especially copyrights, service fees and business profits... in the digital economy.

In addition, tax management control for e-commerce businesses is also difficult because they can maintain multiple stores on one e-commerce trading floor or simultaneously on multiple floors and multiple social networking platforms.

Similarly, controlling cash flow on digital platforms and e-commerce platforms is not easy, when non-cash payment methods are quite diverse (via banks, P2P peer-to-peer payments...). Not to mention, in Vietnam, buyers and sellers still prefer COD payment (cash on delivery), rather than using non-cash payment methods.

To manage and avoid tax losses in digital platform businesses, the Ministry of Finance said it would improve tax laws. At the end of August, the agency submitted to the Government a decree amending Decree 126/2020, which stipulates that e-commerce platforms are responsible for providing information, declaring and paying taxes on behalf of sellers. At the same time, the ministry also proposed amending a number of specialized regulations to ensure a unified legal basis for managing e-commerce platforms.

The Ministry of Finance said it will upgrade the smart tax management system; build a database for risk management; apply artificial intelligence (AI) to process data, connect directly with taxpayers, as well as store information and issue warnings and propose tax management measures based on risks for e-commerce activities...

According to VnExpress