Want to be in the loop?
subscribe to
our notification
Business News
DRAFT LAW LIFTS BANKS’ ROLE IN E-COMMERCE
Payments for e-commerce transactions must be made via banks or authorised payment intermediary services, according to the draft of the amended Law on Tax Management. The draft law, which was recently released by the Ministry of Finance (MoF) for recommendation, aims to better manage and collect taxes on e-commerce businesses, which have developed strongly in Việt Nam in recent years.
Besides the tax agency, it is necessary to have close co-ordination among other relevant ministries and agencies to make tax management more effective, according to the draft law.
Accordingly, the MoF has proposed that the tax department will build databases and apply electronic tax services, such as electronic tax declaration, electronic invoices and online tax payments, ensuring that 100 per cent of taxpayers will have access to these facilities to catch up with e-commerce.
The State Bank of Việt Nam (SBV) will take measures to develop e-commerce payments and to ensure that cross-border services pay through payment service suppliers or licensed payment intermediary services.
The MoF will co-ordinate with SBV in guiding commercial banks to deduct the tax that foreign social networking sites, such as Google, Facebook and YouTube, have to pay when they transfer money from organisations and individuals to the sites.
Under the current legal regulations, every business or individual, regardless of having a business registration certificate or not, that earns over VNĐ100 million (US$4,400) from trading activities, including those on social media operating as e-trading floors, must register, declare and pay taxes. However, tax authorities find it challenging to tax e-commerce businesses as it is not easy to control online business revenues given cash payment is so common in Việt Nam.
Currently, individual traders mainly pay personal income tax based on taxpayers’ declarations. To declare and pay taxes, individual traders must register their tax codes with the tax authorities. But online traders are reluctant to make tax declarations, while the tax authorities’ facilities and personnel for tax inspection and collection are limited, failing to catch up with the swift growth of e-commerce. The common practice of cash transactions in Việt Nam also makes it impossible to determine the exact income of online shops.
In developed countries, tax enforcement and control mechanisms are mostly based on declarations of taxpayers, but most transactions are made via bank accounts rather than in cash, helping secure full and accurate declaration by taxpayers.
Experts therefore suggested that State management agencies should adopt measures to encourage online payment and reduce cash transactions to help oversee revenues of online traders. There should also be closer co-ordination between concerned authorities and intermediary payment banks.
Source: VNS
Related News
VIETNAM’S GDP TO GROW 5.5% THIS YEAR – WB
This forecast is based on the assumption of a moderate recovery in manufacturing exports in 2024, fueled by rebound growth of 8.5% year-on-year in the fourth quarter of 2023 and 17.2% year-on-year in the first quarter of 2024, reflecting strengthening global demand, said Dorsati Madani, senior country economist at the WB in Vietnam.
FARE REFUND FOR VISA REJECTION
Cathay Pacific will offer full refunds for cases of visa rejection to provide you with the confidence to explore the world with ease. If you are planning to fly to a destination that requires an entry visa, you can now book with greater peace of mind.
FOUR COMMODITIES POST Q1 EXPORT VALUE OF OVER 5 BILLION USD
The total export turnover of agricultural, forestry, and fisheries products in the first three months of 2024 is estimated to reach 13.53 billion USD, an increase of 21.8% compared to the same period of 2023.
MOIT PROPOSES SCHEME TO BOOST RENEWABLE ENERGY PROCUREMENT
The proposed Direct Power Purchase Agreement (DDPA) mechanism, outlined in the draft decree, targets organisations and individuals consuming electricity from the 22kV power grid or higher, with a monthly consumption averaging 500,000kWh. However, residential households are excluded from direct procurement.
REAL ESTATE BONDS PLACE PRESSURE ON ISSUING FIRMS
The ministry’s recent report underscores concerns within Vietnam’s corporate bond market for 2023 and 2024. It emphasizes the critical need to address hindrances to the real estate sector in line with the objectives provided in Government Resolution No. 33/NQ-CP, which aims to stabilize the industry.
DA NANG CUSTOMS FOCUSES ON DEVELOPING CUSTOMS-BUSINESS PARTNERSHIPS
Da Nang Customs Department issued an action plan for developing customs-business partnership in 2024. One of the new events this year is the workshop on “Settlement reports for enterprises engaged in outsourcing, export production and export processing” held in Da Nang Customs Department on April 16, 2024.