An amended law for improving taxation on e-commerce activities in Vietnam passed on June 13 will come into effect on July 1, 2020. Successful implementation would require close co-operation between banks, ministries, businesses and organizations.
Under the amended law, the Ministry of Industry and Trade together with the Ministry of Finance will provide data and information on organizations and individuals involved in e-commerce activities, while the State Bank of Vietnam (SBV) will develop a nationwide e-payment system for e-commerce platforms and strengthen its supervision of cross-border e-commerce.
Commercial banks will be obligated to deduct tax for overseas organizations or individuals that earn income from conducting e-commerce activities in Việt Nam. This might require the banks to change their data management, so that they can provide the information required by tax agencies.
Use of cash for e-commerce and avoiding issuing bills can make it difficult to track transactions. However, these sellers might still have physical traces such as such as locations and warehouses. To enhance tax management, electronic bills is one of the best ways, according to Ta Thi Phuong Lan, the General Tax Department’s deputy director of tax management for households and small- and medium-sized enterprises.
Many foreign e-commerce operators have not yet set up offices in Vietnam, though they are earning significant revenue. Tax agencies would work with local businesses, with which those foreign organizations co-operate to do business and commercial banks to keep track of those organizations’ earnings.
The general director of the electronic cross-border trade platform Vietnam Fado JSC recommended the simplification of tax-paying procedures for e-commerce businesses. He said that complex procedures and restrictions such as foreign businesses not being allowed to receive payments directly from Vietnamese individual buyers, lead both sellers and buyers to search for easier and possibly illegal solutions.
(Sources: Vietnam News)