Vietnam to debut online portal for cross-border sale tax payment

An official electronic portal, where overseas traders selling goods to Vietnamese consumers on social media or e-commerce platforms can make tax declarations and payments, will debut on Monday.

The information was delivered by Minister of Finance Ho Duc Phoc at a National Assembly (NA) session on Wednesday, in response to the legislature body members’ queries about losses to the state coffers.

For instance, delegate Do Duc Hien, a representative of Ho Chi Minh City, asked Phoc about measures to deal with the problem of using e-commerce to sell smuggled and banned goods and to avoid tax.

Phoc added that 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 was $57.6 million, up 15.2% year-on-year.

Under the Vietnamese law, companies that do not establish legal entities in the country have to fulfill their tax obligations for taxable income generated in Vietnam’s territory through their partners in the country, organizations or individuals.

A Ministry of Finance circular issued in late 2021 stipulates that if e-commerce platforms like Tiki, Shopee, Lazada and Sendo do not declare and pay taxes on behalf of sellers, they must provide taxmen information about the traders if residing in Vietnam.

For individuals running businesses on social networks like Facebook, local tax authorities shall obtain their identities via data published online for tax collection.

Nguyen Thi Cuc, chairwoman of Vietnam Tax Consultants Association, said while traditional business owners who must rent space and incur additional expenses declare and pay taxes fully, traders on e-commerce platforms with lower costs and more profits avoid paying taxes.