In an era of rapid e-commerce growth, tax management for this activity has become a significant challenge for tax authorities in Vietnam. The explosion of online transactions not only opens up vast opportunities for the economy but also raises numerous complex issues regarding tax management and collection. Therefore, the General Department of Taxation has issued many policies to enhance tax management of e-commerce activities. What issues should businesspeople be aware of?
In this article, BLawyers Vietnam presents 07 important tax notes concerning e-commerce activities in Vietnam for the upcoming period.
1. Tax authorities will strengthen public information activities on tax management of e-commerce activities
In the future, tax authorities in various provinces and cities of Vietnam will intensify efforts to enhance understanding and awareness of tax obligations of organizations and individuals engaged in e-commerce activities, livestream selling, and digital platform business activities through the following means:
- Publicizing information in mass media;
- Organizing training conferences on tax policies;
- Conducting direct dialogues with taxpayers;
- Sending open letters to organizations and individuals involved in e-commerce activities; and
- Establishing dedicated phone numbers and email addresses to support taxpayers.
Thus, in the beginning, tax authorities will focus on disseminating policies and guiding businesspeople regarding e-commerce-related taxes, thereby enhancing voluntary compliance with tax laws.
2. Tax authorities to focus on reviewing and updating e-commerce databases
Tax authorities will review and update the e-commerce database to ensure comprehensive input information for tax management. Accordingly, tax authorities will implement measures to review and identify e-commerce platforms required to provide information and urge them to do so in accordance with legal regulations. Additionally, they will review to ensure the quality of information provided by these platforms and collaborate with departments, agencies, local authorities, commercial banks, financial companies, etc., to identify individuals, business households, and organizations engaged in e-commerce activities.
This will gradually establish a solid database of businesspeople/taxpayers and strengthen the tax authority’s management foundation.
3. Tax authorities’ use of databases
Along with the actions mentioned in note 2 above, tax authorities in various provinces and cities of Vietnam will actively exploit the databases operated and delegated by the General Department of Taxation to local authorities from the following data sources:
- Information provided by e-commerce platforms;
- Information collected through inspections; and
- Information gathered from the Internet for tax management purposes concerning e-commerce activities.
4. Strengthening of tax collection management
To ensure tax collection from e-commerce activities is carried out strictly and efficiently, the tax authority’s management of tax collection will be implemented as follows:
- Assigning departments and civil servants to group subjects according to management requirements to include in the review lists and the data for the review lists;
- Notifying businesspeople on the review list of their obligation to declare and pay taxes according to regulations of e-commerce activities. However, tax authorities will prioritize supporting and guiding e-commerce businesspeople to fulfill their tax obligations voluntarily; and
- Reviewing and comparing the database with the tax declaration and payment status of organizations and individuals engaged in EC activities to identify cases of non-declaration or incomplete tax declaration, thereby recovering taxes and imposing penalties according to the procedures and regulations of the Law on Tax Administration 2019.
5. State agencies to plan and coordinate inter-agency in information collection
In the future, tax authorities in various provinces and cities of Vietnam will proactively develop plans; advise the People’s Committees of provinces and centrally-governed cities; and propose coordination methods with relevant departments and agencies to collect information on e-commerce businesspeople in a timely and comprehensive manner; and handle tax violations according to legal regulations.
6. Enhancing control of electronic invoices
Regarding the issuance of electronic invoices, e-commerce businesspeople must strictly issue electronic invoices and ensure that 100% of e-commerce transactions are recorded and entirely issued with electronic invoices. Additionally, tax authorities will gradually tighten control over input invoices, ensuring the correct declaration and payment of taxes according to the law, from production to circulation, and from importing to sales.
7. Intensifying inspections of e-commerce and digital platform businesses
Tax authorities will increase inspections of organizations, including e-commerce platform owners, transportation units, payment intermediary organizations, agents of foreign suppliers without permanent establishments in Vietnam, advertising media units, etc., from the planning stage to the implementation stage.
Moreover, tax authorities will also enhance the monitoring of organizations and individuals selling goods and receiving commissions from advertising in livestream selling activities. If signs of tax violations are detected, tax authorities will coordinate with local departments to inspect and handle them according to the law. If there are signs of tax evasion, the records will be transferred to the police for handling.
This ensures transparency, fairness, and prevents tax loss in the e-commerce environment.
The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at info@blawyersvn.com. BLawyers Vietnam would love to hear from you.
Date: 13 August 2024
Writer: Thanh Huynh
