Big data to help collect tax from foreign service providers

Experiences from other countries, including the US and the EU, showed that the development of big data on e-commerce would be critical to ensure efficiency in tax management on cross-border IT services providers.

Big data to help collect tax from foreign service providers -0
Cross-border IT services providers and social platforms including Google, Apple, Facebook, Netflix, TikTok and Microsoft, paid around VNĐ4 trillion in taxes in the first half of this year, compared to VNĐ3.5 trillion for the full last year. — Photo kinhtedothi.vn

Big data on e-commerce would help the tax watchdog to efficiently collect tax from foreign cross-border IT services providers, according to Nguyễn Bằng Thắng, director of Tax Management Department of Large Enterprises.

Statistics showed that cross-border IT services and social network providers including Google, Apple, Facebook, Netflix, TikTok and Microsoft, paid around VNĐ4 trillion (US$169.5 million) in taxes in the first half of this year, compared to VNĐ3.5 trillion for the full last year.

The tax that Việt Nam collected on the providers remained modest compared to the revenue of the retail e-commerce market which reached $16.4 billion in 2022, statistics of Vietnam E-commerce and Digital Economy Agency showed.

It was estimated that Việt Nam’s retail e-commerce market would expand by 25 per cent to hit $20.5 billion this year.

On the e-commerce market, six foreign providers namely Meta (Facebook), Google, Microsoft, TikTok, Netflix and Apple, accounted for about 90 per cent of the revenue on cross-border digital platforms in Việt Nam.

In the field of digital advertising, according to Kantar Media Việt Nam, the revenue on platforms such as Facebook, Youtube and TikTok reached $2.5 billion in 2023 and is forecast at $3.4 billion this year.

Thắng said that the tax watchdog would continue to create favourable conditions for foreign providers and domestic establishments which were seriously developing business in Việt Nam. At the same time, strict punishments would be applied to violations, he stressed.

He added that the tax watchdog regularly cooperated with relevant agencies to analyse risks related to tax declaration of foreign providers and authorised organisations for handling measures. Experiences from other countries, including the US and the EU, showed that the development of big data on e-commerce would be critical to ensure efficiency in tax management on cross-border platforms.

Admitting tax loss in e-commerce, Nguyễn Thị Minh Huyền, deputy director of Vietnam E-commerce and Digital Economy Agency, said that the legal regulations on tax collection in the industry were still in the process of being improved.

Huyền said that a mechanism for data sharing between relevant management agencies must be raised to prevent cross-border tax loss.

According to Hoàng Văn Cường, deputy of the National Assembly’s Finance – Budget Committee, the focus must be placed on strengthening digital transformation to have an adequate data for easy and efficient tax management.

The Ministry of Finance targeted to increase domestic tax collection by 5-7 per cent in 2024 with one of the focuses on enhancing the efficiency in tax collection from cross-border e-commerce.

Economy

Vietnam's potential promoted to Mexican businesses
Economy

Vietnam's potential promoted to Mexican businesses

A delegation from the Vietnamese Embassy in Mexico led by Ambassador-Designate Nguyen Van Hai has paid a working trip to Guanajuato state to explore opportunities for cooperation between Vietnam and Mexico, as well as between Vietnamese localities and Guanajuato. ​

Localities report progresses in IUU fishing combat
Economy

Localities report progresses in IUU fishing combat

Coastal localities nationwide have implemented practical and effective activities and specific measures, demonstrating their determination to join the nation’s efforts to have the “yellow card” that the European Commission (EC) has imposed on Vietnamese seafood regarding illegal, unreported, and unregulated (IUU) fishing lifted in 2024.

Da Nang Hi-Tech Park attracts 177-million-USD FDI project
Economy

Da Nang Hi-Tech Park attracts 177-million-USD FDI project

The Da Nang Hi-Tech Park continues to strengthen its position as a leading investment hub with the recent in-principle approval of a 177-million-USD project by Dentium Co., Ltd., from the Republic of Korea (RoK).This significant investment brings the total registered foreign direct investment (FDI) in the park to 875.2 million USD, spanning 13 projects.

UNGA President congratulates Vietnam on re-election to UNCITRAL
Economy

UNGA President congratulates Vietnam on re-election to UNCITRAL

Ambassador Dang Hoang Giang, Permanent Representative of Vietnam to the United Nations (UN), had a meeting in New York on November 21 with President of the 79th session of the UN General Assembly (UNGA) Philemon Yang who congratulated Vietnam on the country’s re-election to the UN Commission on International Trade Law (UNCITRAL) for the 2025-2031 term.