The Ministry of Finance (MOF) wants the State Bank of Vietnam (SBV) to instruct commercial banks to withhold taxes from transactions with Facebook and Google, but SBV said it is not authorized to do so. Ministries disagree on solutions to collect tax from Google, Facebook MOF has vowed to collect tax from Google’s and Facebook’s earnings in Vietnam, and is drafting a regulation on tax management over e-commerce activities. Under the draft regulation, cross-border services must make payments via the national payment portal NAPAS. This will allow taxation agencies to control revenue from services to collect taxes. The tax payments will be carried out under the withholding mode. Tax amounts will be deducted from revenue when making payments via NAPAS. SBV’s Governor Le Minh Hung said MOF has the legal right to issue regulations, guide tax declarations, and report and collect tax. SBV doesn’t have the right or skills in this field. Under current laws, … [Read more...] about Ministries disagree on solutions to collect tax from Google, Facebook
Vietnam tries to get a grip on Facebook, Google operations
The complicated issue of taxing foreign companies like Facebook and Google was raised by Vietnamese authorities during a meeting on Wednesday. Over the last two years, Vietnamese businesses have spent a total of VND120 billion ($5.2 million) on Facebook and Google services, according to data from the Ministry of Finance cited at the meeting. Due to the fact neither company has representative offices in Vietnam, tax authorities can only charge Vietnamese advertising agencies and businesses that use Facebook and Google services. Facebook and Google are known to use a complicated sales routing method to European countries in order to avoid tax, which makes it impossible for countries that use their services to collect tax from them. Tax is just one reason why Vietnam’s government is seeking ways to control the two giants and other foreign companies’ activities in Vietnam. The other concern is internet security, which was the focus of the Wednesday meeting between the National … [Read more...] about Vietnam tries to get a grip on Facebook, Google operations
Vietnam pulls plug on demand for Facebook, Google to install servers in the country
Vietnam has made a u-turn on a draft bill that would have required foreign companies such as Facebook and Google to install servers in the country. The draft was submitted by the Ministry of Public Security last year over national security concerns, but faced strong opposition from international organizations and companies. The Vietnam Chamber of Commerce and Industry said the bill went against the commitments Vietnam had made when it joined the World Trade Organization and EU-Vietnam Free Trade Agreement. A joint letter sent by the U.S., Australian, Canadian embassies and the European Union in August 2017 also voiced strong concerns over the bill, saying it went against the trade commitments Vietnam had made. This opposition prompted a meeting on Wednesday between the National Defense Committee (CNDC) and Diplomatic Committee, which concluded that foreign companies do not need to install servers in Vietnam. However, authorities decided that a clause in the bill … [Read more...] about Vietnam pulls plug on demand for Facebook, Google to install servers in the country
Facebook and Google dodging Vietnamese taxmen since 2016
Leaning on the excuse of “having no official representative office” in Vietnam, billion-dollar Facebook and Google have been avoiding their tax obligations since early 2016. Facebook and Google have been operating without paying a single dong of tax in Vietnam Over the past two years, the Vietnam-based partners of the two social media giants have been paying VND120 billion ($5.25 million) in total corporate income tax (CIT) on their behalf. Specifically, as shown in a recent report provided by the Ministry of Finance (MoF), the Vietnamese tax authorities could only administer tax regulations on the income generated by their partners, advertising agencies, as well as businesses who directly purchased Facebook and Google’s services in Vietnam. Previously in 2017, the domestic partners of Facebook and Google were reported to pay a total VND73.2 billion ($3.2 million) of tax, VND39.1 billion ($1.71 million) of which was value added tax (VAT) and VND34.1 billion … [Read more...] about Facebook and Google dodging Vietnamese taxmen since 2016
Tax payment of Google & Facebook in Vietnam considered not sufficient
According to the report of the Committee for National Defense and Security about the draft Law on network security, which was introduced in the meeting of the National Assembly on April 4, until now Google and Facebook have not had any official representative in Vietnam yet. As a result, regarding their online advertising activities, tax authorities can only collect tax from revenues earned by their Vietnamese partners / advertising agencies or direct service buyers which are based in Vietnam. Preliminary statistics show that in 2016, on behalf of Google, YouTube, and Facebook, domestic companies paid a tax amount of about VND46.86billion (approx. $2.05million), consisting of VND25.28billion ($1.1million) of value added tax and VND21.58billion ($946,138) of corporate income tax. In the first 9 months of 2017, on behalf of those companies, domestic companies also paid a tax amount of VND73.2billion ($3.2million), including VND39.08billion ($1.71million) value added tax and … [Read more...] about Tax payment of Google & Facebook in Vietnam considered not sufficient