Tik Tok, Microsoft, Netflix utilize Vietnam's tax payment web portal

Cross-border service providers like Tik Tok, Microsoft, and Netflix are utilizing the Vietnamese government's newly-launched web portal to pay taxes online.

Dang Ngoc Minh, deputy chief of the General Department of Taxation (GDT), shared the information at a forum on the nationwide adoption of electronic invoicing in Hanoi on Wednesday.

Vietnam’s GDT in late March launched a tax payment web portal for overseas suppliers involved in cross-border activities. Foreign cross-border businesses that derive income from Vietnam can register, declare and pay tax through the portal without submitting physical documents to Vietnamese tax authorities.

Cross-border foreign enterprises are those without permanent establishments in Vietnam and that provide e-commerce and other services to Vietnamese businesses and individuals. Earlier, they had to rely on an agent or third party to declare and pay taxes.

“The portal represents a tax sector breakthrough, allowing international service providers to register and directly pay taxes when doing business in Vietnam. Basically, these companies are fully adhering to tax obligations,” Minh said.

Other foreign service providers like Facebook, YouTube, and Google have also made tax payments directly via the portal.

"These firms primarily seek to enter the Vietnamese market, and when there are convenient tools available, businesses comply with tax declaration and payment," Minh added.

In addition, individuals drawing income from partnerships with foreign suppliers have also been identified by the GDT and are paying taxes, said Nguyen Thi Lan Anh, director of the Tax Administration Department for Small Enterprises and Individuals.

Tax revenue from cross-border e-commerce activities in the past years reached VND5 trillion ($218.6 million), of which $74 million came from Google. The figures of Facebook and Microsoft were $71 million and $25 million respectively. Tax collection from cross-border services in 2021 hit VND1,317 billion ($57.6 million), up 15.2% year-on-year, according to official data.

The tax proceeds mostly come from the cross-border platforms’ advertising agencies who pay in lieu of the 10% withholding tax.

As of May 24, 100% of enterprises in six localities, namely Hanoi, Ho Chi Minh City, Quang Ninh, Hai Phong, Phu Tho, and Binh Dinh have switched to using electronic invoices. The figure is 92.6% for the entire country.