­­HÀ NỘI — Starting from March 21, cross-border e-commerce platforms may send in their tax forms via a new e-portal at http://etaxvn.gdt.gov.vn or Etax Mobile app under the management of the Ministry of Finance.

The ministry has ordered the General Department of Taxation to compile a list of all platforms operating in Việt Nam, their websites and registered addresses. 

The general department was told to step up cooperation with foreign tax authorities to help the platforms follow Việt Nam's tax regulations. In the event where violations have been found, the general department will work together with respective tax authorities to enforce the country's tax regulations and penalties if applicable. 

The general department said the platforms are supposed to meet their duties on value-added tax (VAT) and corporate income tax, based on their revenue generated from operations in the country.

The new tax regime is applied to platforms operating in Việt Nam without registered addresses within the country, individuals and businesses in Việt Nam who conduct businesses with said platforms, tax and accounting firms that represent said platforms under Việt Nam's legal jurisdiction and commercial banks and intermediary payment services employed by said platforms. 

According to a report released by the Ministry of Finance, tax revenue from cross-border e-commerce and digital services reached over VNĐ1.14 trillion (US$49.5 million) in 2020 and VNĐ1.31 trillion in 2021.

In a Q&A session with the National Assembly's Standing Committee last week, minister of finance Hồ Đức Phớc said over VNĐ5 trillion in tax revenue has been collected from the platforms in recent years, with a large amount from tech corporations such as Facebook, Google and Microsoft. 

He said, however, the number was still minuscule in comparison to their generated revenue. Business reports from Google and Temasek said Việt Nam's digital commerce market expanded by 16 per cent in 2021 with total revenue up to $14 billion. The market has been forecast to grow 29 per cent annually on average in the 2020-25 period. By 2025, the market has been forecast to grow to $52 billion in size. 

One of the greatest challenges in collecting tax from digital platforms was the absence of physical representative offices and the complexity in how to categorise income tax, intellectual property fee, service tax and profit in digital commerce activities, said Nguyễn Thị Lan Anh, head of the general department's business tax division.

"Enforcing tax regulations in digital commercial activities is vastly different from our traditional methods as almost all transactions are done electronically with servers located outside of the territory. One operator can own several digital stores on the same platforms, on different platforms and on social media platforms," she said. 

The risk of losing out on revenue was high as individuals and firms using social media platforms to conduct business often neglect to issue invoices and avoid paying taxes. Identifying violators was a challenging task by itself as e-transactions are often encrypted as well as owners' identities. 

"It is notoriously difficult to track businesses that provide non-physical products such as software, music and consultation services as they don't require a means to deliver products and services," said Hồ Ngọc Tú from the finance ministry's Institute for Financial Strategy and Policy. 

Prof. Lê Xuân Trường from the Academy of Finance said along with policy reforms, the Government must employ technologies to counter tax loss. He urged the establishment of a dedicated task force for e-commerce activities. 

"The long-term solution is a revamp of tax regulations and integrated automation of tax regimes within the digital economy," he said. — VNS