Doing business on Facebook: Over 100 million VND/year must pay tax

To collect e-commerce tax, the Department of Industry and Trade and the Ho Chi Minh City Tax Department are conducting a survey of businesses on Facebook and representatives of units that have signed advertising and commercial contracts with social networking sites to find solutions to collect taxes.

Mr. Tran Ngoc Tam, Director of the Ho Chi Minh City Tax Department, said that according to preliminary statistics, there are currently more than 13,000 entities conducting commercial business via Facebook in the city. Currently, the Tax Department and the Department of Industry and Trade are reviewing and requesting those conducting online business to register their commercial business with the Department of Industry and Trade of the city.

The Tax Department leader also said that according to current regulations, only individuals doing business online with a revenue of over 100 million VND must pay taxes and pay in the form of lump-sum taxes. However, in terms of preventing tax losses in the field of e-commerce, tax collection from people doing business on Facebook is just a small number. Currently, the largest amount of tax lost in e-commerce is the business activities of buying and selling, advertising on social networking sites such as Google, Facebook, Agoda, Twitter, etc.

However, most of the websites with large commercial and advertising volumes are located abroad, so the City Tax Department cannot contact the website owners to request tax payments. According to the Tax Department, this is a national matter, carried out by the Government. If the websites do not cooperate in declaring and paying taxes, the Government has the right to close the websites and not allow them to connect to Vietnam.

Currently, the City Tax Department is working with units that have commercial contracts, advertising payments via banks with foreign websites to track down leads and propose tax collection solutions. According to current legal regulations, if domestic enterprises sign advertising contracts with foreign websites, they must declare and require the foreign side to pay contractor tax, then domestic enterprises will be able to include advertising costs in deductible expenses when calculating corporate income tax.

According to VNE.