(Source: Inside retail Asia/Vietnam Briefing |June 22, 2017)
Government officials in Ho Chi Minh City have sent tax demands to 13,500 Vietnam Facebook retailers, urging online businesses to declare earnings and submit their taxes.
Under Vietnam’s law, online retailers earning more than VND 100 million (US$4400) a year are required to declare taxes. Taxes are required to be submitted to the municipal and trade department of the city.
This move aims to target only long-term and unregistered business. With the e-commerce industry thriving, the government hopes that the taxation of online transactions will reduce the city’s tax losses.
The government has been contemplating collecting taxes since February 2017 from online businesses on platforms such as Facebook, YouTube, Instagram, and Zalo, a local social media app. They believe, once sellers are registered with the trade ministry, they can be held accountable for products and services and protect customers from fraudulent transactions or subpar products. Tax authorities hope to work closely with the Ministries of Trade and Information, the banks, and postal services to oversee such transactions.
With over 40 million Facebook users in Vietnam, the social networking site has emerged as the primary medium for retailers. Small and home-based business owners have had their revenue grow manifold once they switched to online sales. Through Facebook, more than 50 individuals have earned over US$1 million in a year. Annual e-commerce spending rose by 22 percent to US$160 last year.
The market has been expanding almost 20 percent annually and is currently worth US$4 billion. It is expected to rise to US$10 billion by 2020, driven by broader adoption of smartphones and growing use of Facebook as an online marketplace.
Read More: https://insideretail.asia/2017/06/22/vietnam-facebook-retailers-chased-for-tax/#daily
