Strongly fighting against the loss of tax revenues in the field of e-commerce

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The HCM City Taxation Department will publicize organizations and individuals of tax evasion. Photo: N. Hue.

Promoting coordination to combat losses

According to this plan, the Taxation Department of Ho Chi Minh City will disseminate the obligation of tax declaration, payment, tax policies and taxes in e-commerce business to all players operating in the field of e-commerce, to ensure taxpayers to understand the tax policy to make tax declaration.

Mr. Tran Ngoc Tam, the Director of Taxation Department of Ho Chi Minh City said that in order to collect taxes on business activities in the field of e-commerce, the Tax office can not do it alone but it needs the coordination of relevant units. Accordingly, the HCM City Taxation Department will coordinate with the Department of Industry and Trade, the Ministry of Industry and Trade, the Department of Information and Communications, and the units managing the website and social networking sites (Facebook, Google, Apple, Store) to provide a list of websites, accounts of organizations and individuals with e-commerce activities on social networks. Also, the Department of Taxation shall be in cooperation with the State Bank of Vietnam – the HCM City Branch and commercial banks to propose to provide a list of non-bank organizations licensed by the State Bank to provide intermediate payment services.

Requesting the Inspectorate to supervise the State Bank in support of the provision of statements of accounts of organizations and individuals engaged in e-commerce activities opened at commercial banks in Vietnam and non-bank organizations. It is proposed that commercial banks, non-bank organizations which are licensed by the State Bank provide intermediary payment services, statements of accounts of organizations and individuals engaged in trading activities through banks and non-bank organizations licensed by the State Bank to provide intermediary payment services.

Also, the Ho Chi Minh City Tax Department requested organizations providing transportation services for organizations and individuals engaged in e-commerce business (delivery companies, post and telecommunication companies) to provide the number of goods to be transported, the turnover collected from organizations and individuals engaged in e-commerce activities. Coordinating with the Public Security to propose to the tax office the websites of e-commerce activities which have not been declared to handle tax arrears according to regulations.

As for the solution of the Taxation Department of Ho Chi Minh City for management of business activities in the field of e-commerce, Mr. Nguyen Hoang Minh, the Deputy Director of the State Bank of Ho Chi Minh City said that if the solutions of the HCM City Taxation Department are implemented well, they will support the management of revenues from e-commerce business activities. The State Bank is also ready to cooperate with the HCM City Taxation Department when it requests.

Many experts also said that the solutions to the Taxation Department were appropriate. However, in order to effectively manage the taxation of business activities in the field of e-commerce, there is a need a support not only from the tax office but also from many parties, including the self-declaration; and tax payment of organizations and individuals engaged in business activities in the field of e-commerce.

Ceasing operations in case of tax evasion

According to the guidance of the Ho Chi Minh City Taxation Department, for individuals residing in Vietnam conduct e-commerce business, the total turnover from all types of business in the year (including other types of business of more than 100 million vnd must declare and pay VAT and personal income tax for business individuals prescribed in the Ministry of Finance’s Circular No. 92/2015 / TT-BTC of 15th June 2015.

For individuals engaged in the e-commerce business, if they have a business turnover of 100 million vnd per year or less and individuals do not have fixed places, they shall be exempt from license fees. In the case where an e-commerce business individual earns a turnover of more than 100 million vnd per year with the fixed location of a business, the license fee must be paid according to regulations.

As for the registration for tax declaration and payment, individuals conducting e-commerce business activities shall directly contact the tax offices of the localities where they reside or temporarily reside for tax payment declaration.

In the case where non-resident individuals have turnover from different production or business areas but can not separate turnover from each business sector, the personal income tax rate shall be applied according to the highest applicable tax rate. In cases where business individuals are non-residents having fixed locations in the Vietnamese territory, they must make business registration and make tax declaration as for business individuals being residents according to current regulations.

According to the leader of the HCM City Taxation Department, for effective implementation, the Ho Chi Minh City Department of Taxation shall perform the inspection and examination to bring the tax administration of e-commerce business into order, ensure that all organizations and individuals engaging in e-commerce business activities voluntarily make tax declaration and payment; and ensure that the management of tax collection is regularly contributed to the State budget.

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In addition, the Taxation Department of Ho Chi Minh City will announce organizations and individuals engaged in e-commerce business activities that commit acts of tax evasion on the mass media, ensuring that taxpayers who commit acts of tax evasion will be punished in accordance with the law. For organizations and individuals engaged in e-commerce business activities that fail to declare and pay tax, commit acts of tax evasion or fail to comply with the decisions of the tax office, the HCM City Taxation Department shall send documents to the Department of Information and Communications and the Ministry of Information and Communication to prevent the operation of the websites violating tax policy.