Short of breath in collecting e-commerce tax

With a growth rate of 25% in 2023, Vietnam is among the top 10 countries with the fastest growing e-commerce in the world. Tax management in this field therefore also requires changes.

Review for collection

Through information collection, in the first 6 months of 2024, the Ho Chi Minh City Tax Department requested 7 individuals doing e-commerce business to explain. As a result, an influential individual (KOLs) submitted a personal income tax finalization declaration from salary and wages in 2022, with a total of additional tax and late payment of 2.2 billion VND. At the same time, this person declared that his income came from social media channels, with a total of additional tax and late payment of 36.5 million VND.

Employees of a company in District 5, Ho Chi Minh City go online to search and order products via e-commerce channels. Photo: HOANG HUNG

In Hanoi, in the first 3 months of this year, it was also announced that 41 individuals with income from e-commerce activities would be taxed. Among them, one individual declared and paid taxes late, amounting to 8.5 billion VND.

According to statistics from the tax authority, tax revenue from organizations and individuals engaged in e-commerce business activities has increased rapidly in recent years. Specifically, in 2022 it was 83,000 billion VND; in 2023 it was 97,000 billion VND and in the first 6 months of 2024 it was over 50,000 billion VND. On the other hand, the General Department of Taxation coordinated with the Ministry of Industry and Trade, the Ministry of Information and Communications and commercial banks to collect information on 929 e-commerce trading floors; 284 online sales applications; 144 million payment accounts of organizations and individuals; 130 organizations operating in the fields of telecommunications, advertising, radio and television, enriching the tax database.

According to the General Department of Taxation, by June 2024, the country had 383 e-commerce trading floors providing information, an increase of 22 floors compared to the end of 2023. Recently, the General Department of Taxation also issued an official dispatch on strengthening tax management for e-commerce activities. It requires tax departments of provinces and cities to strengthen propaganda; inspect e-commerce business organizations, businesses on digital platforms; strengthen compliance monitoring for organizations and individuals selling goods, receiving commissions from advertising in livestream sales activities. In case of detecting signs of tax law violations, make a list and coordinate with local departments and branches to inspect in the area to handle according to tax laws and specialized laws, or transfer the file to the police if tax evasion is determined.

The General Department of Taxation also sent an open letter to organizations and individuals doing e-commerce business, providing a set of documents guiding tax registration, declaration, tax payment and email lists of tax authorities for taxpayers to proactively contact when having problems. The leader of the Department of Tax Management for Small and Medium Enterprises, Business Households and Individuals (General Department of Taxation) said that the tax authority has developed a plan to inspect and examine taxpayers operating in the field of e-commerce, business on digital platforms, and livestream sales.

Order via e-commerce channel. Photo: HOANG HUNG

Tighten management

According to the 2023 E-commerce White Book, the number of Vietnamese consumers participating in online shopping increased by about 61 million, an increase of more than 7% over the same period last year; the estimated value of online shopping per person reached 336 USD/year, an increase of more than 16%. In Ho Chi Minh City alone, statistics for the first 6 months of 2024 showed that the total number of organizations and individuals doing business on e-commerce platforms was more than 90,000, including nearly 65,000 individuals, business households and more than 25,000 enterprises. Although the tax sector has made efforts to control, the problem of fighting tax fraud in e-commerce activities is still... out of breath!

According to Ms. Nguyen Thi Lan Anh, Director of the Department of Tax Management for Small and Medium Enterprises and Business Households, there are still many cases where organizations and individuals livestreaming to sell goods have not voluntarily fulfilled their obligations to declare, register, and pay taxes fully and promptly. Meanwhile, according to the Vietnam E-commerce Association, on average there are 2.5 million livestream sales sessions each month, with more than 50,000 participating sellers. In addition, the regulation on tax exemption for goods with a value of less than 1 million VND sent via express delivery and cross-border logistics services is considered a major loophole that causes tax losses. With the explosion of e-commerce platforms, about 2 billion orders each year, experts say that each order is only a few hundred thousand VND, so the value added tax (10%) lost is more than 2 billion USD!

Sharing about tax management for e-commerce activities, Deputy Director General of the General Department of Taxation Mai Son said that the tax sector focuses on promoting the need to declare, register and pay taxes. In case of non-compliance, it will be handled according to regulations. According to Mr. Mai Son, in the last months of 2024, the tax sector will implement many measures, including strengthening coordination with ministries and branches to handle violations, tightening management in the online environment with organizations and individuals who do not comply with tax laws in e-commerce activities.

Proactively declaring and paying taxes will be more beneficial

Currently, many cases of spontaneous online sales without tax registration or business registration must pay personal income tax from 5% to 35%, depending on the income level in the year. If not in compliance, when the tax authority inspects, they will be fined and have to collect all taxes from previous years. Meanwhile, if they register their business, pay taxes according to the declaration method, and fully comply with regulations on invoices, documents, and accounting, the tax obligation to be paid on revenue is only 1.5% (including 1% value added tax and 0.5% personal income tax) for goods distribution and supply activities. For other service provision activities, the tax rate is 5%.

KHANH CHAU

Source: https://www.sggp.org.vn/hut-hoi-thu-thue-thuong-mai-dien-tu-post754680.html