Foreign suppliers pay over VND7,360 billion to the State budget

VCN – The Tax authority will apply big data analysis to monitor foreign businesses, organizations and individuals with income generated in Vietnam but not yet registered and declared taxes.
37 foreign suppliers pay over VND3,100 billion in taxes 37 foreign suppliers pay over VND3,100 billion in taxes
Foreign suppliers pay 1.8 trillion VND in taxes Foreign suppliers pay 1.8 trillion VND in taxes
Foreign suppliers pay over VND7,360 billion to the State budget

Closely control foreign enterprises with income generated in Vietnam but have not yet registered and declared taxes

The direction by the Ministry of Finance to the General Department of Taxation for officially launching the e-Portal for foreign suppliers to register, declare and pay taxes directly has affirmed that Vietnam is one of the four leading states in the ASEAN region applying cross-border tax collection via an online e-portal.

Mr Nguyen Bang Thang, Director of the Large Taxpayers Department (General Department of Taxation), said that the State revenue from foreign suppliers from March 21, 2022, to the current date reached VND7,363 billion, including VND3,478 billion in 2022 and VND3,919 billion in 2023.

Motivated by the "taxpayer-centric approach" motto, tax authorities will continue to create maximum favourable conditions for foreign suppliers and domestic organizations to expand and develop their business in Viet Nam.

However, the tax authorities will apply strict sanctions and handle violations under provisions of the law for organizations that intentionally commit tax violations.

Facing the news that tax management for cross-border advertising services, typically TikTok, has shown signs of violating tax laws, Mr Nguyen Bang Thang said that the General Department of Taxation reported the Ministry of Finance, submit to the Government and the National Assembly for the promulgation of legal documents related to tax registration, declaration and payment by organizations and individuals engaged in e-commerce business and cross-border services providers.

Article 42 of the Law on Tax Administration No. 38/2019/QH14 stipulates that foreign suppliers must register and declare taxes via the e-portal of the General Department of Taxation or authorize the domestic organizations to declare and pay taxes as prescribed in Circular No. 103/2014/TT-BTC.

The foreign suppliers and authorized domestic organizations must self-determine revenue and declare and pay the corresponding tax.

Tax authorities regularly coordinate with relevant agencies to review and check data, analyze risks of declaration of foreign suppliers and authorize organizations to take measures to inspect and strictly handle violations (if any).

The Director said that the tax authority will apply big data analysis to determine and control foreign businesses, organizations and individuals that have revenue generated in Vietnam but have not yet registered and declared taxes.

Taking appropriate tax administration measures

The model and operation of e-commerce business activities have many changes compared with the former model. The management of e-commerce business activities and tax management for foreign suppliers faces many difficulties in Vietnam and advanced countries worldwide.

The experience of countries such as the US and the EU shows that close coordination between state management agencies and tax authorities is needed to build a large database for e-commerce transactions, providing cross-border services to prevent tax loss, fight malicious information and ensure security and safety in the network environment.

According to Mr Nguyen Bang Thang, a large database in management plays a key role. Therefore, the General Department of Taxation advised the Ministry of Finance to report to the Government on the management of e-commerce business activities and digital business platforms. The Prime Minister quickly issued Directive No. 18/CT-TTg dated May 30 on promoting connection and data sharing for e-commerce development, anti-tax loss, and ensuring monetary security.

The Prime Minister requested the Ministry of Industry and Trade, the Ministry of Information and Communications, the Ministry of Public Security, and the State Bank to coordinate with the Ministry of Finance, General Department of Taxation to build a tax management database for e-commerce and digital business platform to apply risk management in tax administration based on a large database.

To improve the efficiency of tax administration for foreign suppliers, Mr Nguyen Bang Thang said the General Department of Taxation had directed the Tax Departments to capture information on the declaration status of authorized organizations in the country to apply appropriate tax management measures promptly.

The Tax authority has requested foreign suppliers to provide a list of authorized domestic organizations and reviewed and analyzed data to coordinate with relevant agencies such as the Ministry of Industry and Trade, the Ministry of Information and Communications, and commercial banks to collect and review data to apply appropriate tax management measures to organizations and individuals that have not yet fulfilled their tax obligations.

The Tax man has worked with foreign suppliers to guide and disseminate the law to foreign suppliers, thereby creating favourable conditions for the suppliers to comply well with Vietnam's tax laws, including the responsibilities of foreign suppliers for the tax declaration and payment obligations of authorized economic organizations.

By Hoài Anh/Ngoc Loan

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