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Mr. Luu Duc Huy, Director of Tax Policy Department under the General Department of Taxation.

Reality has shown that many individuals now have income related to e-commerce, particularly from foreign websites such as Google, Facebook, etc. So, with which regulations does the legal system of tax administration have to manage these cases, sir?

The tax collection for these cases is based on the Law on Tax Administration. Accordingly, if organizations or individuals earn over VND 100 million per year, they must declare and pay personal income tax (PIT) and value added tax (VAT).

E-commerce activity can generate income from two ways. Firstly, organizations and individuals living in Vietnam who run advertisements and sign contracts for business via websites (Google, and Facebook), they must pay fees to these websites. Thus, foreign organizations and individuals will receive an income from the Vietnamese side.

In this case, according to the provisions of law, organizations and individuals paying the fees (in Vietnam) shall carry out the tax deduction before paying the fees to organizations and individuals having overseas e-commerce.

Secondly, through these websites, organizations or individuals in Vietnam can also earn money when providing services to e-commerce sites.

According to the provisions of the Law on Tax Administration, organizations and individuals who receive incomes from such websites, they must declare and pay tax according to the provisions of Law on tax to the tax agencies.

The legal provisions on taxable objects are clear. What have the tax agencies done to manage tax for individuals who have incomes from e-commerce?

Over the past time, the General Department of Taxation has reviewed and discovered more than 14,000 accounts engaged in e-commerce. Accordingly, the General Department of Taxation has notified Ho Chi Minh City and Hanoi Tax Departments of the more than 14,000 accounts.

The General Department of Taxation also sent a written request to Tax Departments to guide and disseminate tax policies to organizations and individuals engaging in e-commerce activities in order to fulfil their tax obligations. The tax agencies at all level were requested to review and understand the organizations and individuals engaging in e-commerce activities so as to urge them to register for tax declarations and payments according to regulations.

The General Department of Taxation also required tax agencies to conduct inspections and examinations of individuals engaging in e-commerce activities in order to put the tax administration for e-commerce activities into order. At the same time, tax agencies at all levels were requested to advise the People's Committees in provinces and cities to direct relevant agencies and departments (Department of Industry and Trade, Department of Planning and Investment, Provincial Police, Department of Information and Communications) to coordinate with them in tax management for organizations and individuals engaging in e-commerce business in their localities.

On the other hand, the tax agencies also collaborated with credit institutions to exchange data and information in accordance with Joint Circular No. 102/2010 / TTLT-BTC-NHNN. Accordingly, related organizations and individuals shall provide relevant documents to determine the tax obligations of taxpayers.

So, how will the tax agencies deal with the cases that have taxable income?

Recently, Ho Chi Minh City Tax Department has reviewed and discovered some individuals with incomes from e-commerce, particularly via electronic websites such as Google, Facebook, etc.

In cases where business individuals subject to tax payment refuse to declare and pay tax, the tax agencies are authorized to handle according to the Law on Tax Administration.

If through the inspection and examination the tax agencies discovers that the organizations or individuals have failed to register tax declaration, or have committed acts of tax evasion, they shall transfer the dossiers to the police agency for investigation and prosecution in accordance with the law.

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So, for the individual who must pay tax arrears in Quang Nam, but to this date has not fulfilled his tax obligation, what will the tax agency do for this case?

In this case, if the tax agency has enough basis to determine that the individual has committed acts of tax evasion, it shall transfer the dossier to the police office for investigation. In cases where there are signs of tax evasion, the tax agency shall prosecute the case according to the law.