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

Da Nang strengthens cooperative ties with Thai localities
Economy

Da Nang strengthens cooperative ties with Thai localities

Vice Chairwoman of the People's Committee of the central city of Da Nang Nguyen Thi Anh Thi on September 26 hosted a Thai delegation led by Thai Consul General in Ho Chi Minh City Wiraka Moodhitaporn, and Khon Kaen Deputy Governor Siriwat Pinijpanich, who are in the city to attend the "Meet Thailand in Da Nang" conference.

UN Special Rapporteur highly values Vietnam's progress
Economy

UN Special Rapporteur highly values Vietnam's progress

United Nations (UN) Special Rapporteur on the right to development Surya Deva had a dialogue in Geneva on September 18 with countries on his activities over the past year, during which he highly valued the Vietnamese Government's multidimensional poverty reduction approach.

Australian plums to be available in Vietnam
Economy

Australian plums to be available in Vietnam

Australian plums will soon be on shelves in Vietnam under the two-way agricultural market access agreement between the two countries that brings Australian plums to Vietnam and Vietnamese passion fruit to Australia, according to the Australian Government.

Vinamarine prohibits profiteering in emergency situations
Economy

Vinamarine prohibits profiteering in emergency situations

The Vietnam Maritime Administration (Vinamarine) under the Ministry of Transport strictly prohibits all acts of taking advantage of emergency situations, storms and floods to raise service prices inconsistent with fluctuations in total costs compared to normal conditions for profiteering.