E-commerce tax collection: Seen from talking numbers

	E-commerce tax collection: Great potential - Huge challenges
	Need for a legal corridor to manage e-commerce tax
	E-commerce tax administration: Management agencies must provide sufficient information

Business on an e-commerce platform is growing very fast. Illustration

The numbers increase

VND1,151 billion is the amount collected by tax authorities from Vietnamese organizations and individuals earning income from e-commerce businesses and providing digital services since 2018. This number was gradually increasing and increased rapidly over the years. For example, if 2021, the new tax collection reached VND 261 billion; in 2022, this figure has increased to more than VND 600 billion.

Along with that is more than VND 3,444 billion of forty-two foreign suppliers declared and submitted through the portal for foreign suppliers since March 21, 2022. These suppliers come from countries and regions such as the United States; Netherlands; Korea; Singapore; Hong Kong; Ireland; Lithuania; Switzerland, and Australia. Notably, six major foreign suppliers, including Meta (Facebook), Google, Microsoft, TikTok, Netflix, and Apple (accounting for 90% of the market share in the revenue of e-commerce services, doing business on cross-border digital platforms in Vietnam), have done tax registration, tax declaration and tax payment. Vietnam is currently one of the four leading countries in the ASEAN region to collect taxes on foreign suppliers through an online portal.

It can be seen that the above figures are the result of a long process of efforts to implement solutions to prevent revenue loss in the tax industry because this is a relatively new and growing business field, not only in Vietnam but also in Vietnam. South but also in the world.

In big cities, the growth rate of this business form is robust, requiring the tax agency to "balance the brain" to ensure against loss of budget revenue and create a fair and transparent business environment.

At the Tax Department of Ho Chi Minh City, this unit adds a plan to inspect and examine at least 50% of businesses that are owners of e-commerce trading floors located in their areas of responsibility, assigning inspection and inspection departments to manage businesses that are owners of e-commerce trading floors. In addition, for enterprises that deliver goods and provide freight forwarding services to buyers who have received authorization to collect sales proceeds, the Tax Department has written requests for these businesses to provide information to the tax authorities about the number of goods transported amount collected on their behalf. Periodically provide once every six months, no later than the 30th day of the following month.

For enterprises operating as payment intermediaries, the Department requests once every six months, no later than the 30th of the following month, to provide data on the amount of money transferred from buyers to business establishments that sell goods, providing services through intermediary payment units (according to each business establishment that receives money).

Thanks to the above close measures, by the end of November 2022, business organizations and individuals selling goods and providing services on e-commerce floors via Youtube, and Facebook, through sales apps have paid more than 552 billion dongs of tax to Ho Chi Minh City Tax Department.

In Da Nang, as of November 2022, the total tax paid to the state budget for e-commerce business, business on digital platforms and the network environment is VND 86.7 billion. The total tax declared and paid by the enterprise is VND 81.9 billion; the total tax paid by business households is 4.8 billion VND. Da Nang Tax Department directs tax departments and branches in the district to regularly monitor and strengthen tax management for e-commerce and digital business activities.

Strengthen interdisciplinary management

It can be seen that, with the characteristics of the digital economy and the rapid development of e-commerce in Vietnam, the practice has been posing many challenges for the management of e-commerce activities as well as the public sector tax administration. In the past time, under the direction of the Ministry of Finance, the General Department of Taxation has implemented many essential solutions to strengthen the responsibility of taxpayers, the responsibilities of related people and intermediary organizations. For example, e-commerce trading floors will coordinate more closely with tax authorities in tax administration and also reduce administrative procedures in tax declaration and payment. The tax sector also promotes applying information technology solutions, technology 4.0, Big Data technologies, and AI... to risk management in tax management.

Another essential solution is strengthening coordination among relevant tax administration departments for e-commerce activities. The Ministry of Finance has signed a cooperation agreement with the Ministry of Information and Communications and the Ministry of Industry and Trade. It is developing and signing a cooperation agreement with the State Bank in cash flow management, including information security and safety regulations. In addition, the tax sector will strengthen coordination with the Cybersecurity Department and the Ministry of Public Security in checking information of individuals with large incomes from cross-border platforms.

The tax industry has constantly researched, explored, and learned tax management experience from domestic and foreign experts, actively absorbing comments and suggestions, including proposals for collecting value-added tax at source for e-commerce activities. This is a solution recommended by the OECD. It has been successfully applied in some countries such as Argentina, Ecuador and Paraguay. However, to implement this solution, it is necessary to strengthen the legal basis, such as amending the Law of value-added tax, Personal Income Tax Law or Tax Administration Law and implementation manuals.