The tax authorities in District 7 and Nha Be District, Ho Chi Minh City collected tax arrears and fines totaling VND31 billion (US$1.3 million) from an individual who earned a healthy income through Google but failed to make tax declarations and payments.

Thai Minh Giao, deputy head of the Ho Chi Minh City Department Taxation, said the department had collected VND169 billion ($7.25 million) in tax arrears and fines for late tax payment from 38 individuals who earned income through Google.

In addition, three enterprises were asked to pay VND327 billion ($14 million). 

The municipal taxman also inspected some Google partners in Vietnam which manage YouTube channels in the country and collected VND24.3 billion ($1.04 million) in taxes and fines from them.

The Ho Chi Minh City taxation department’s tax and fine collection was based on the information provided by four local commercial banks.

The banks provided a list of individuals and organizations earning income topping $51.2 million and VND21.4 billion ($917,200) from Google.

By inspecting three Google partners in Vietnam, they also received information about other local people and organizations providing online services for foreign firms but failing to make tax declarations and payments, Giao said.

The department proposed the Ho Chi Minh City People’s Committee ask the Ho Chi Minh City branch of the State Bank of Vietnam to direct commercial banks to provide information about transactions of local domestic individuals and organizations with foreign ones as required by tax agencies.

The tax authorities requested that commercial banks deduct taxes from the money that foreign cross-border service providers in Vietnam, such as Google (advertising services), Apple (cloud storage services and online music listening services), Netflix (streaming services), and Agoda and Booking.com (online hotel room booking services), transfer abroad in line with Government Decree 126 detailing a number of articles of the Law on Tax Administration.

Collecting e-commerce taxes from logistics, goods delivery service providers

To manage e-commerce platforms, the Ho Chi Minh City Department of Taxation pooled information about logistics and delivery service providers, especially those offering cash on delivery services, while instructing individuals and organizations trading on e-commerce platforms to fulfill their tax obligations. 

For owners of e-commerce platforms in the city, the department asked them to encourage their customers to comply with tax regulations and inspect these platforms.

The tax authority also requires payment intermediary service companies to provide information about the money transferred from consumers to online traders every six months.

Inspectors, those managing business households and individuals, and tax authorities will later review the revenue declared by traders on e-commerce platforms.

If the figures are different from those provided by payment intermediary service companies, tax agencies will collect tax arrears and fines in line with the law.

According to the Ministry of Finance, cross-border service providers, such as Google, Facebook, and Microsoft, declared and paid taxes totaling more than VND4.5 trillion ($192.9 million) from 2018 to April this year.

Facebook settled nearly VND2 trillion ($85.8 million), Google paid around VND1.9 trillion ($81.5 million), and Microsoft cleared a VND651 billion ($27.9 million) tax.

Tax agencies also collected VND735 billion ($31.5 million) from Vietnamese individuals and organizations providing cross-border services and trading on e-commerce platforms in the period.

The figure was VND176 billion ($7.5 million) in the first four months of this year.

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