General Department of Taxation requests Netflix fulfill tax declaration and payment

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The Tax authority expedites dissemination of tax policies, declaration and payment to all tax payers engaged in e-commerce.

Tens of thousands of inspections and audits

According to the General Department of Taxation, between January and August, the Tax sector conducted 37,620 thousand inspections, and collected tax arrears of about VND7.72 trillion into the State budget, reducing tax deductions of VND 1.1 trillion and tax loss of VND26.65 trillion.

The Tax authority has provided solutions to prevent the transfer price by enterprises such as reviewing tax declarations, and coordinated with relevant agencies as police, and customs to improve the efficiency of tax administration for transfer pricing activities.

The tax authorities has inspected and audited 258 enterprises with related party transactions; collected the tax arrears, the refunded taxes and fined VND551.65 billion; reduced revenue loss of VND7,617.34 billion and tax deduction of VND6.18 billion, and revised up taxable income by VND1,636.04 billion.

Authorties has collected tax arrears of VND271.62 billion from re-determining of the market price for related party transactions, reduced tax loss of VND6, 313.7 billion and revised up taxable income of VND 1,049.57 billion.

Regarding e-commerce inspection, to prevent and limit tax fraud and evasion for online environment, the Ministry of Finance directed the tax authority to supplement regulations related to tax administration for e-commerce activities when building the Law on Tax Administration 38/2019/QH14 dated June 13, 2019 of the National Assembly and a number of legal documents issued since 2020.

The Tax sector has also promoted dissemination of tax policies, tax declaration and payment to all taxpayers with e-commerce activities; urged taxpayers to declare and pay tax in line regulations; coordinated with relevant agencies to collect information for tax administration for e-commerce activities; inspected e-commerce operators to effectively manage.

Tax authorities have managed income from online advertising services of foreign organizations that do not establish legal entities in Vietnam such as Google, YouTube, Facebook, Amazon through their partners, advertising agencies or businesses purchasing the services in Vietnam.

The General Department of Taxation has coordinated with relevant agencies to collect information and data related to Netflix Company - a Netherland based TV entertainment service provider - and requested the company to fulfill its tax declaration and payment obligations in accordance with the provisions of Vietnamese tax law.

Strengthening inspection

To prevent revenue loss, the General Department of Taxation requires tax departments of the provinces and centrally-run cities to inspect local enterprises and avoid overlapping with the plan of the central tax authority and other agencies.

The tax departments are asked to expedite the inspection of the tax law compliance and the illegal use of invoice by enterprises, thereby handling violations related to invoice and tax.

The tax departments are requested to check the VAT refund, assess and classify the risks of tax refund dossiers to inspect 100% high risk dossiers within one year, especially for export tax refund of some items, such as: tapioca starch, rubber, cashew nuts, wood chips, and agricultural products.

The country’s top tax regulator also directed tax departments to strengthen inspection and review of tax declaration and payment for real estate business activities in accordance with the direction of the Ministry of Finance; implement risk analysis and check high-risk enterprises; strengthen tax inspection for enterprises with related party transactions

The departments are required to strengthen the implementation of measures to improve the efficiency of tax administration, tax inspection and examination for e-commerce businesses across the country.