Vietnam taxman goes after US tech giants
Netflix told to set up representative office and servers in the country to pave way for tax collection
22 Oct 2020 | Nguyen Tuong Thuy

Vietnamese authorities have asked Netflix to set up a representative office and servers in the Southeast Asian country to pave the way for the US streaming giant to pay taxes. The General Department of Taxation also told the company to make reports on its revenues in Vietnam since its 2016 entry so that the body could calculate its tax liability.

In recent years the government has been seeking to collect taxes from technology giants such as Facebook, Google and YouTube, as well as individuals they employ in the country.

There are around 64 million internet users across the country of 97 million people. Currently Netflix has around 300,000 subscribers there, with each paying 180,000 to 260,000 Vietnamese dong (US$7.75 to US$11.19) monthly.

Aside from Netflix, other foreign technology companies also have no brick-and-mortar offices in Vietnam and are not paying taxes, although the Cybersecurity Law requires all foreign firms with revenue from online activities to store their domestic data within the country and submit their business figures to tax authorities.

Minister of Information and Communications Nguyen Manh Hung had earlier cited the case of Facebook, which he said was estimated to have generated US$1 billion in advertising revenue in the country in 2018 alone, but had paid no taxes. A retroactive collection of taxes from the firm could amount to hundreds of millions of dollars, he added.

According to his ministry, online advertising accounts for a big part of advertisement spending in Vietnam, with Google and Facebook being the most popular platforms. The ministry is working on a draft decree revising and supplementing some regulations pertaining to advertising.

General Department of Taxation, meanwhile, is intensifying retroactive collection. Vu Manh Cuong, director of the inspection agency under the department, told a press briefing in Hanoi on October 20 that in the capital alone, data supplied by 45 commercial banks show that there were 18,304 organizations and individuals engaged in online business via Google, Facebook and YouTube, with revenues totalling 1.462 trillion Vietnamese dong, or US$63.56 million. Tax authorities have so far collected some 14 billion Vietnamese dong, or nearly US$609,000, from them.

While still unable to force foreign tech giants like Google and Facebook to pay taxes, authorities are taxing Vietnamese for their online revenues.

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