Strictly handle individuals with high income who avoid paying taxes

The tax office recommends that all transactions with income should be declared and pay taxes.

Be voluntary, if do not want to be criminally prosecuted for tax evasion

On August 7, 2018, according to leaders of the HCMC Tax Department, an individual with an income of 41 billion VND from Facebook and Google… has paid 3 billion VND of tax arrears. Earlier, at the end of July 2018, the HCMC Tax Department has collaborated with the banks to detect that the individual who wrote a game program which was on social networks such as Facebook, Google, and Youtube… and ran advertising on these programs, was paid more than 41 billion in the two years of 2016, 2017 without tax declarations and payments. The HCMC Tax Department has issued the decision to collect 3 billion VND and a fine for late payment of 1.1 billion VND. The individual has worked with the HCMC Tax Department and paid tax arrears, and for the fine for late payment alone, committed to pay the full amount of tax arrears.

In other cases, the HCMC Tax Department has sent information to the Quang Nam Tax Department on the case of L.T.V having a permanent address in Tien Canh commune, Tien Phuoc district, Quang Nam province, that has a large income of $US 727,680 (16.7 billion VND) from Google without declaring tax and payment.

According to the HCMC Tax Department, commercial banks now provide tax authorities with a lot of data, and tax authorities have also sent documents to individuals with high incomes to fulfill their tax obligations… The HCMC Tax Department has directed its units to send documents to invite all individuals with high incomes from foreign organizations without making tax declarations and payments for work. If they do not answer the phone, then they will send messages.

According to leaders of the tax department, under the regulations, the personal income tax code is the life-time code, if they do not pay now, they must pay later and cannot evade because the longer it is, the more they must pay. For a person who generates income from Google or other social networks, the above revenue is a one-time payment, not an annual balance.

According to the leaders of the HCMC Tax Department, the tax office recommends that all income transactions should be self-declared and paid by taxpayers. If they do not make a self-declaration, when the tax authorities detect, they will be fined, pay for late payments, and even be treated as tax evasion criminals, which will be detrimental to individuals concerned... In fact, individuals who have paid income from an organization outside the territory of Vietnam, if he or she does not make a self-declaration, he or she cannot hide their income. Because information will gradually be accumulated through the centralized data system, anywhere in any province, and if the payment is carried out through the bank, it is reflected in the system. Tax authorities only need to contact the banks, then it knows all of these payments.

Coordinate for collection

The above cases of collecting tax arrears will also affect a large number of individuals that have not fulfilled their tax obligations. Currently, the tax authorities are continuing to coordinate with commercial banks to find individuals with high-incomes from foreign organizations who have not declared tax payment to collect for the state budget.

Under the provisions of Circular No. 92/2015/TT-BTC dated June 15, 2015, of the Ministry of Finance, individuals earning incomes of 100 million VND, or more from business a year, must pay tax. Based on the percentage of Value Added Tax, Personal Income Tax is calculated on the turnover defined in Circular No. 92 of the Ministry of Finance, where the service sector has a percentage of Value Added Tax of 5%, and the corporate income tax rate is 2%. Thus, individuals having incomes from foreign networks, such as, Facebook, Google and YouTube... must pay a tax rate of 7% on their income (including 5% of Value Added Tax, and 2% of personal income tax).

However, some tax experts said that the determination of sales and income sources is very difficult as regulations lack control tools. According to Nguyen Thi Cuc, Chairman of the Vietnam Tax Consultancy Association, for large business households, money is transferred through banks, electronic wallets, but tax authorities can determine the turnover, make inspections, thanks to the testing of these units.

At the same time, on the bank side, the money transfer agency is also responsible for providing information. However, with units and individuals trading via Facebook, cash collection is harder to control. Tax authorities may coordinate with the Ministry of Information and Communication, the Ministry of Industry and Trade, and banks to view the database. Even when the database is deleted, these agencies also have the right to restore the data to investigate, recalculate the tax amount that business households evade, causing losses.

According to a Tax Inspector of HCMC, in the current Law on Tax Administration, there is a regulation on the act of tax evasion for the behavior of individuals evading tax by not registering their business, not registering for tax. However, if the individuals resolve by not knowingly paying tax in advance, it will be considered as extenuating circumstances such as a first-time violation, for not firmly grasping the provisions of law.