On June 30, an online conference was held to report on the performance of the tax industry in the first half of 2022. According to Mr. Thai Minh Giao, Deputy Director of the Ho Chi Minh City Tax Department, in the first six months of the year, six banks provided tax authorities with organizations and individuals with income from Google. The total amount received from abroad exceeds 4 million USD and 51,2 billion dong.
Collecting taxes from people and businesses who profit from Google
The Ho Chi Minh City Tax Department has handled 169 billion VND in arrears and fines for late payments with 38 persons who make their earning through Google. In one situation where a person had a “awful” income from Google but failed to disclose and pay taxes, the Tax Department of District 7 – Nha Be has just collected and penalized 31 billion VND. Three companies are also being examined by the Tax Department at the same time and have been penalized VND 327 million for late payments.
Mr. Giao added that the investigation’s findings for VND 24.3 billion in tax fines and arrears for a Google partner company in Vietnam (commonly known as MCN – Multi Channel Network), which is in charge of overseeing YouTube channels in Vietnam that develop their own digital content.
Tax Department of Ho Chi Minh City’s requests and suggestions
The tax authorities of Ho Chi Minh City has in the past synchronized numerous solutions to promote effective tax collection administration in order to manage e-commerce activities on a digital platform.
- By using propaganda and advice, increase the legal awareness of people and organizations so that they voluntarily meet their tax declaration and payment duties in accordance with the law.
- Create a system for sharing information and regularly assessing logistics and delivery service providers, particularly those offering organizations’ cash-on-delivery (COD) services.
- Make it mandatory for companies and e-commerce trading floor owners to ask companies and people selling products and services there to pay their taxes.
- Every year, add to the strategy by inspecting and testing at least 50% of the companies that run e-commerce trading floors in Ho Chi Minh City.
The representative of the Ho Chi Minh City Tax Department suggested during the online conference that the City People’s Committee ask the State Bank to direct the distribution of remittance transaction data from abroad to domestic businesses and individuals who receive payments from foreign companies (such as Google, Apple, Netflix, etc.) for providing services on digital platforms.
The Tax Department requires banks to be in charge of withholding tax that is owed by foreign businesses offering cross-border services that produce income in Vietnam, in accordance with the conditions of Decree 126/2020/ND-CP such as Google, Apple (cloud data storage, Apple Music (streaming music), Netflix (watch movies online), Agoda, and Booking.com before sending money abroad.
In summarizing the first half of the year, the Ho Chi Minh City Tax Department estimated realizing 169,924 billion VND, which is up 21% from the same period in 2021 and 63 percent of the estimate for 2022. According to projections and compared to the same period, state budget revenue is progressing well. Some revenue streams, like the VAT increase of 15.6% and the CIT increase of 8.6% over the same period, demonstrate the recovery and growth of local companies.