Addressing challenges in e-commerce tax management

	PM urges measures to remove obstacles to e-commerce
	Foreign service providers have paid VND4,039 billion of tax in the first half of 2024
	Vietnam’s e-commerce market grows fastest in SEA

The General Department of Taxation has collected, operated, and allocated permissions for the use of a database system on e-commerce.

Focusing on preventing tax losses and protecting domestic production

Experts noted that e-commerce, with its new business models, allows business owners to evade taxes more easily compared to traditional business forms, due to digital technology's ability to secure business information. This has posed a challenge for tax authorities in managing and fully collecting taxes from e-commerce activities.

Mai Son, Deputy Director General of the General Department of Taxation, stated that in Vietnam, the E-commerce market was expanding and diversifying its operational models. With a rapid growth rate considered the fastest in Southeast Asia, new challenges have emerged for tax management, such as managing all revenue sources, identifying taxpayers, and applying modern, effective management practices that align with international norms, based on risk compliance management principles supported by a large database on e-commerce from tax administration and State management data from related ministries and sectors.

The General Department of Taxation viewed managing taxes on E-commerce and digital platform businesses as a key task to prevent tax losses, protect domestic production, and promote the development of the digital economy. Following the directives of the Government and the Ministry of Finance, in the first six months of the year, the General Department of Taxation issued directives requiring provincial and city tax departments to strictly manage taxpayer groups, intensify the review of e-commerce databases, and continue enriching the database. Additionally, the quality of information provided by platforms is being reviewed, with audits and inspections of companies in the e-commerce sector being organized. Efforts are also being intensified in managing taxes in sectors such as television services, media, content creation, and income generated from online advertisements on cross-border platforms, as well as individuals selling via livestreams on social platforms.

The E-commerce database system has been collected, operated, and permissions allocated to local tax authorities for tax management purposes in e-commerce activities. This database includes domestic and cross-border e-commerce data. The domestic e-commerce database is sourced from four main channels: e-commerce platforms, inspections and audits, internet data scanning tools, and regular tax management information. The cross-border e-commerce database is built from sources including foreign suppliers, Vietnamese organizations, and individuals filing and paying taxes on behalf of foreign suppliers, information on foreign organizations and individuals earning income on Vietnamese e-commerce platforms, and tax filing records.

Continuing to collect, update, and enrich the e-commerce database

Assessing the implementation of Directive 18/CT-TTg by the Prime Minister on enhancing and sharing data connectivity to support e-commerce development, prevent tax losses, and ensure monetary security, Deputy Minister of Finance Cao Anh Tuan noted that the General Department of Taxation had actively coordinated with ministries and sectors to agree on detailed plans for data connectivity, sharing standards, and norms. To date, the General Department of Taxation has achieved several positive outcomes in collaboration efforts, such as completing over 90% of the review and synchronization of the Ministry of Public Security's database with the tax code database to implement the transition to using citizen identification numbers as tax codes, and integrating the use of electronic identification accounts (VneID) with the tax management platforms of the Tax Department.

Thanks to these efforts, tax management in e-commerce activities has seen positive results in the first half of the year. For instance, in reviewing e-commerce platforms required to provide information to the Tax Department, 383 platforms have reported data to the e-commerce portal, an increase of 22 platforms compared to the cumulative number reported over the previous five quarters (from Q4/2022 to Q4/2023). In reviewing the information provided by these platforms, after implementing a review and requiring the platforms to resubmit accurate and comprehensive data nationwide, there has been a noticeable improvement in the platforms' awareness and compliance with information disclosure regulations. Of the reviewed platforms, 18 out of 361 have resubmitted data as required.

For tax collection results from organizations and individuals engaged in e-commerce activities, in the first five months of 2024, the managed revenue amounted to VND1.8 million billion (equivalent to US$71 billion), with taxes paid totaling approximately VND50 trillion, an increase of 23% compared to the average tax collected in the first five months of 2023.

According to Mai Xuan Thanh, Director General of the General Department of Taxation, from now until the end of the year, the tax sector will continue to collect, update, and enrich the e-commerce database from various information channels and apply professional measures to maximize the use of the database for effective tax revenue management in e-commerce activities. Additionally, efforts will be made to quickly establish an electronic portal for individual e-commerce businesses and actively advise local governments to direct relevant agencies to coordinate with the Tax Department in implementing e-commerce tax management solutions.