YouTube is currently the second most used social network in the world (after Facebook). The number of accounts on this social network has reached more than 2 billion people (in 2019). That is also the reason why this is an extremely effective channel to attract, promote products and make money that many people are interested in.
In Vietnam, according to estimates from SocialBlade.com, the world's most prestigious independent statistics site, individuals who own the top YouTube channels in Vietnam can earn hundreds of millions, even tens of billions of VND each year from YouTube. Despite having a "huge" source of revenue from the Vietnamese market, cross-border service providers such as YouTube, Google, Facebook or Netflix have not yet fulfilled their tax obligations, posing many challenges in tax management for the tax industry.
Recently, the Ministry of Finance is developing strict regulations on the responsibilities of organizations and individuals in tax registration, tax declaration, and tax payment for e-commerce business activities and digital platform-based business, as shown in the draft Circular guiding the implementation of a number of articles of the Law on Tax Administration and Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government detailing a number of articles of the Law on Tax Administration.
Talking to Lao Dong regarding this issue, a representative of the General Department of Taxation said that this agency is building a multilingual system for consulting, declaring, and providing tax codes to facilitate foreign e-commerce service providers.
How to prevent tax loss?
Mr. Nguyen Duc Huy - Deputy Chief of Office of the General Department of Taxation said that statistics of the General Department of Taxation show that in 2019, Vietnamese organizations signed online advertising contracts with foreign organizations and deducted and paid a total tax of VND 1,010 billion on behalf of foreign organizations (value added tax of VND 535 billion, corporate income tax of VND 475 billion).
In 2020, in the context of the COVID-19 outbreak and rampage, e-commerce has flourished. Through the review of the General Department of Taxation, Vietnamese organizations signed online advertising contracts with foreign organizations and deducted and paid on behalf of foreign organizations a total tax of more than VND 1,143 billion (value added tax of VND 518.9 billion, corporate income tax of VND 624.8 billion).
According to Mr. Dang Ngoc Minh - Deputy General Director of the General Department of Taxation, in the amount of tax collected, there are cases where individuals voluntarily declare and pay taxes, but there are also cases where tax authorities detect and collect taxes according to the provisions of law during inspections and audits. However, according to the assessment of economic experts, the above figure of 1,000 billion VND per year is too small compared to the scale of the current Vietnamese advertising market.
Notably, according to information from the Ministry of Information and Communications, in Vietnam, by the end of 2020, there were about 15,000 YouTube channels with monetization enabled. However, only 30% of the total number of channels, equivalent to about 5,000 channels, under the management of YouTube network companies in Vietnam, have fully declared and paid taxes. Tax Administration Law No. 38/2019/QH14 (effective from July 1, 2020) clearly stipulates that individuals with income from business activities with revenue of over 100 million VND/year will pay 2% personal income tax (PIT) and 5% value added tax, a total of 7% of revenue.
Ms. Ta Thi Phuong Lan - Deputy Director of the Department of Tax Management for Small and Medium Enterprises and Business Households and Individuals (General Department of Taxation) - said that the collection and collection of personal income tax on income sources from e-commerce activities, including YouTube, is not a new implementation but has been implemented by the Tax sector for many years, the amount collected has increased over the years, the most in Hanoi and Ho Chi Minh City.
According to Mr. Dang Ngoc Minh, a series of new regulations on tax management implemented from 2021 will contribute significantly to preventing tax losses, tax fraud, and tax evasion, especially in e-commerce and digital platforms. The General Department of Taxation has coordinated with the Banking Inspection and Supervision Agency under the State Bank of Vietnam to collect information related to the amount of money transferred by organizations/individuals in Vietnam to foreign suppliers such as Netflix through commercial banks.
| Google, the parent company of YouTube, has just announced that it will withhold and tax income for YouTube content creators (YouTubers) who are not based in the US. The new policy will start as early as June 2021. And Google is calling on YouTubers to provide tax information to Google to ensure appropriate tax payments. This means that YouTubers in Vietnam and other countries outside the US will have to pay taxes on their income earned from YouTube. |
According to Lao Dong newspaper
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