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HCMC announces tax collection plan for e-commerce business

Released at: 17:02, 14/07/2017

HCMC announces tax collection plan for e-commerce business

Illustrative image (Source: misa.com.vn)

City's tax department set to crack down on e-commerce businesses not paying taxes.

by Ngoc Lan

The Ho Chi Minh City Department of Taxation has officially announced its tax collection plan for the e-commerce business, including the sale of goods and services via the internet, Facebook, and other social media.

Individuals and organizations selling goods over the internet with annual revenue of more than VND100 million ($4,400) must register and declare tax.

Tax obligations consist of licensing tax, value added tax, personal income tax, excise tax, and environmental protection tax (if any).

The amount of license tax on online businesses with annual revenue above VND500 million ($22,000) is VND1 million ($44) per year, VND500,000 ($22) per year for those with annual revenue of VND300-500 million ($13,200-22,000), and VND300,000 ($13) for those who earn revenue of VND100-300 million ($4,400-13,200).

The Department has collected information on the identity and telephone numbers of 13,422 Facebook account holders and will collect tax arrears and publish a list of all individuals and organizations found to be committing tax evasion on the mass media.

It has also assigned the tax departments in 24 districts to encourage and mobilize businesses on Facebook to voluntarily declare tax.

Many holders of Facebook accounts do not want to declare or pay taxes, however, as online trading is considered to be only a part-time job. Even large account holders are finding ways to evade taxes.

The Binh Thanh District Department of Taxation has invited 172 website owners and Facebook accounts to prepare tax declaration, with 98 having cooperated.

Of the 677 Facebook business in the city invited to work with the tax department, 500 have declined to do so.

Tax officials said that account holders have identified multiple ways to evade taxes. The most common way is to increase cash transactions, set up multiple sales pages, change locations, not accurately declare sales, and not disclose sales prices.

The Department, therefore, will take aggressive measures with business accounts on Facebook that have not provided feedback after receiving an invitation to address their tax obligations.

Tax departments in districts will play a direct role in penalizing Facebook vendors who do not register their business or pay taxes. They will also publish a list of individuals and organizations that commit acts of tax evasion.

The Hanoi Department of Taxation, meanwhile, sent text messages to 13,422 Facebook accounts that use social media network as a retail platform, urging them to go to its website and register their businesses and declare income. Nearly 2,000 have registered to date and been granted a tax code.

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