How to curb budget losses but still encourage e-commerce is a problem to be discussed.
Trillions- dong loss
According to the current regulations, e-commerce businesses shall pay basic value added tax (VAT) of 10% and corporate income tax of 20%. For sale of goods on social networks, online sales forms, etc, individuals must pay VAT of 1% and personal income tax of 0.5% of the sales. The tax only applies to individuals with sales of more than 100 million VND per year.
Trillions- dong loss
According to the current regulations, e-commerce businesses shall pay basic value added tax (VAT) of 10% and corporate income tax of 20%. For sale of goods on social networks, online sales forms, etc, individuals must pay VAT of 1% and personal income tax of 0.5% of the sales. The tax only applies to individuals with sales of more than 100 million VND per year.
An e-commerce business website in Vietnam.
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There were a lack of specific legal guiding documents for online business concerning management, declaration, collection, payment. As well, tax management of e-commerce and online advertisements was loose in the past time, making tax administration in this field difficult. Through inspection, tax authorities have uncovered tax evation and fined hundreds of billions dong from e-commerce businesses.
Necessary specific regulations
In e-commerce tax inspection, tax officials must have IT skills. In addition to tax professional skills, tax officials must also have command of informatics, foreign languages, and knowledge of e-commerce transactions. It is necessary for credit institutions and related management agencies to join the inspection process in order to determine the cash flows; trace transactions, export transaction data history, etc. In order to enhance the control of e-commerce transactions and ensure the equality of tax obligations among business lines; it is imperative to review, amend and improve the existing tax legislations .
Firstly, the Ministry of Finance should issue circulars and official dispatches detailing the implementation of specific tax policies and administration applicable to this field, in which tax obligations, tax declaration, tax calculation and tax withhold at source, tax paid to the State budget are defined. For tax agencies, it is essential to immediately carry out tax registration and supplement information on tax changes of e-commerce business organizations and individuals. Tax registration deadline notices are made even on their “stalls” on Facebook or other social networks.
In addition to improving the policy system andapplying the risk management mechanism; it is necessary to develop and promulgate tax administration procedures for e-commerce businesses; develop a separate inspection and control process for this activity, hold specialized training courses and promote tax education for e-commerce businesses and individuals. Coordination among relevant agencies such as the State Bank of Vietnam, Ministry of Information and Communications, etc., to exchange and collect information is also very important.
Necessary specific regulations
In e-commerce tax inspection, tax officials must have IT skills. In addition to tax professional skills, tax officials must also have command of informatics, foreign languages, and knowledge of e-commerce transactions. It is necessary for credit institutions and related management agencies to join the inspection process in order to determine the cash flows; trace transactions, export transaction data history, etc. In order to enhance the control of e-commerce transactions and ensure the equality of tax obligations among business lines; it is imperative to review, amend and improve the existing tax legislations .
Firstly, the Ministry of Finance should issue circulars and official dispatches detailing the implementation of specific tax policies and administration applicable to this field, in which tax obligations, tax declaration, tax calculation and tax withhold at source, tax paid to the State budget are defined. For tax agencies, it is essential to immediately carry out tax registration and supplement information on tax changes of e-commerce business organizations and individuals. Tax registration deadline notices are made even on their “stalls” on Facebook or other social networks.
In addition to improving the policy system andapplying the risk management mechanism; it is necessary to develop and promulgate tax administration procedures for e-commerce businesses; develop a separate inspection and control process for this activity, hold specialized training courses and promote tax education for e-commerce businesses and individuals. Coordination among relevant agencies such as the State Bank of Vietnam, Ministry of Information and Communications, etc., to exchange and collect information is also very important.
