MANAGING TAX RISKS IN E-COMMERCE

In the first half of 2024, tax authorities addressed violations involving 4,560 taxpayers including 1,274 enterprises and 3,286 individuals, resulting in tax collections and fines totaling VND297 billion. With domestic e-commerce revenue estimated at VND1.98 trillion and taxes paid amounting to approximately VND54,000 billion, there is still much room for further tax collection, according to official assessments.

Business compliance and tax obligations

According to Ms. Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consulting Association (VTCA), the digital economy's expansion has bolstered e-commerce activities, with livestream sales sessions achieving record revenues in the hundreds of billions of VND. This growth offers brands a great chance to boost revenue and support the national economy. However, the Ministry of Finance and the General Department of Taxation have stepped up their tax management and inspections for e-commerce, leading to a significant rise in tax arrears and fines, now totaling hundreds of billions of VND. "Businesses that evade taxes face repercussions, including the potential deletion of their accounts from e-commerce platforms. This not only impacts their personal income but also hampers the overall growth of the e-commerce industry. It is crucial for households and individuals engaged in e-commerce to adhere to their tax obligations, ensuring accurate self-declaration, self-calculation, and self-payment while being accountable for the accuracy of their reported data," Cuc emphasized.

A TikTok Vietnam representative highlighted that affiliate marketing is booming on TikTok Shop, raising important tax issues for sellers and content creators. These include taxes on their earnings and personal income tax from affiliate activities. If a seller withholds tax from a creator's earnings, it is provisional. The creator might need to pay more or receive a refund based on their annual tax settlement.

Solutions for effective tax management

Many business people struggle with tax obligations due to a lack of understanding of regulations, leading to unintentional neglect. Ms. Nguyen Thi Cuc explained that the rise in reported tax evasion is due to more thorough inspections by tax authorities, not necessarily increased non-compliance. Some individuals with significant e-commerce revenues mistakenly think they are exempt from paying taxes. Sellers should recognize the benefits of fulfilling their tax obligations compared to the risks of tax evasion. Proper tax payment not only ensures compliance but also contributes to the State budget and supports overall economic growth. For those experiencing difficulties with tax payments, business households and individuals are encouraged to seek assistance from professional accounting services or tax agents for expert guidance and support.

Managing revenue in today’s e-commerce environment is very difficult due to sales across multiple platforms, requiring a large team to handle invoicing, which often leads to discrepancies between platform data and management software. The high volume of daily invoices and irregular sales timing add to the difficulty of maintaining accuracy. For business households and enterprises, the fragmentation of information across various management systems can lead to data inaccuracies. Manual processes for tax declaration and reconciliation increase the risk of errors and non-compliance. Additionally, a lack of up-to-date tax information can result in improper handling of tax obligations and associated risks. To help solve problems related to tax declaration and payment in accordance with regulations, MISA Joint Stock Company has developed a comprehensive solution set that connects directly with e-commerce platforms, synchronizes data into sales software to manage goods, inventory and revenue from multiple channels, integrates with electronic invoices, digital signatures and MISA's accounting software, automatically issues invoices and transmits data to tax authorities and performs tax declaration and reporting obligations quickly and accurately.

Source: VCCI