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Vietnamese app developer, 20, required to pay $176,000 in online income tax arrears

Vietnamese app developer, 20, required to pay $176,000 in online income tax arrears

Friday, August 03, 2018, 15:04 GMT+7

A 20-year-old app developer in Ho Chi Minh City has been required to pay more than VND4.1 billion (US$176,000) in personal income tax arrears for ad revenues he collected in two years from online platforms.

The man, whose name is not disclosed by tax authorities, reportedly received over VND41 billion ($1.76 million) from Google, Facebook and YouTube between 2016 and 2017 thanks to in-app ads the companies placed in mobile games he developed.

The amount translates to some VND1.7 billion ($73,000) worth of monthly income.

According to the municipal taxman, the app developer and his team appeared surprised when they were summoned and asked to pay the tax arrears, as they said they knew “at least four to five other cases” who made a fortune from similar channels but are not paying any income tax.

The man admitted to having failed to declare and perform his tax duties, and has pledged to pay the tax arrears in due time.

The taxman of Quang Nam Province in central Vietnam is also looking into the personal income of another app developer who reportedly made up to VND30 billion ($1.29 million) from ad placements without paying tax.

Recent moves by Vietnamese tax authorities have sounded the alarm among the tech-savvy in the Southeast Asian country, as many are taking to social media to warn others of unpaid taxes.

Money talks

Q., a YouTube personality who produces videos offering reviews of tech products, said he was able to build a subscriber base of more than 100,000 in just a year since the launch of his channel.

On average, Q. says he receives $600-700 monthly from the video-sharing site thanks to advertisements placed in his videos.

The more views their videos can attract, the more money the owner gets paid at the end of the month, he explained.

A YouTube user with more than one million subscribers can easily bag $6,000-12,000 a month from producing trendy videos, Q. added.

Two girls watch a video on a popular YouTube channel in Vietnam. Photo: Tuoi Tre
Two girls watch a video on a popular YouTube channel in Vietnam. Photo: Tuoi Tre

The most popular topics of interest for the Vietnamese audience include cooking recipes, make-up tutorials, travel tips, and food reviews among many others.

An expert in digital sales says content creators can earn $0.02-0.03 per click on Google ads placed in their content, while Facebook pays around $0.3 per 1,000 views on its Instant Articles feature.

“Of course this payout amount is never fixed, but varies depending on many factors including time and content,” the expert explained.

Tax evasion

In a public statement, a Facebook representative in Vietnam claimed there were around 50 self-made dollar millionaires in Vietnam in the 19-20 age group who made their fortunes from the Internet.

A recent inspection by Vietnamese authorities with the collaboration of four major local banks found that Google and Facebook transferred more than VND500 billion ($21.42 million) in payments into personal accounts owned by thousands in Vietnam.

So far only a tiny fraction of the amount has been subject to personal income tax.

Many app developers and content creators employ tax-evading tactics including the use of electronic wallets and cryptocurrencies to avoid identification, according to experts.

In 2015, the Vietnamese developer behind the 2013 hit mobile game Flappy Bird was made to pay more than VND1.4 billion ($60,000) in tax for the income he had reaped from the historically popular app.

But cases like that are rare in Vietnam, where authorities still struggle to tax online incomes due to lack of relevant regulations.

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Tuan Son / Tuoi Tre News

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