E-commerce platforms may choose not to declare and pay tax on behalf of sellers.
This is new information as per Circular 100 issued by the Ministry of Finance, replacing the previous Circular 40.
This regulation will help e-commerce platforms to relieve their finances.
However, a representative of the General Department of Taxation said that although it would not be compulsory for e-commerce platforms to pay tax on behalf of sellers, Circular 100 still had strict regulations to avoid loss of tax revenue.
Circular 100 gives e-commerce platform owners two choices. One is to pay taxes on behalf of individuals if authorised by sellers.
The second is for platforms to provide the information of business individuals, such as the name, age, address, tax number, telephone number, sales revenue and bank account number, to the tax authority.
Ta Thi Phuong Lan, Deputy Director of the Individual Income Tax Management Department, said that between the two options above, the plan to pay taxes on behalf of individuals would be more favourable for e-commerce platforms. Because the plan to share the seller’s information with the tax agency would take much time and manpower.
“If declaring or paying tax on behalf of sellers, e-commerce stores only have to do it monthly or quarterly and can do it all at once. Thus, the exchanges will not have to provide information,” she said.
If providing seller information, the platform will have to provide information on each transaction, but the number of e-commerce transactions is currently up to 3.5 million transactions per day, according to Lan.
The data is very large, it will consume a lot of human and material costs compared to declaring or submitting instead.
Recently, the Ministry of Finance and the Ministry of Industry and Trade signed an agreement on sharing data on e-commerce platforms and information about individuals selling on them.
Circular 100 will take effect from January 1, next year and is a legal corridor to manage tax obligations for sellers on e-commerce platforms, helping to limit the loss of tax revenue on current e-commerce platforms.
A report by the Vietnam E-commerce Association revealed that the average growth rate of Vietnamese e-commerce was forecast to be 29 per cent in the 2020 – 2025 period, with the scale estimated to be 52 billion USD by 2025.
With an increasingly large scale, tax revenue from e-commerce is significant and Circular 100 will contribute to combat tax losses.