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Vietnam’s Normal Division of Taxation (GDT) introduced the launch of an internet portal for abroad suppliers concerned in cross-border actions. International cross-border companies that derive revenue from Vietnam can register, declare and pay tax by means of the online portal with out submitting bodily paperwork to the Vietnamese tax authorities.
Cross-border overseas companies are these with out everlasting institutions in Vietnam and perform e-commerce and different companies with companies and people in Vietnam.
Earlier, overseas companies needed to depend on an agent or third occasion to declare and pay taxes.
On-line platform for direct tax fee
International cross-border companies are required to undergo an preliminary registration process on the internet portal the primary time they entry the platform. They should have a sound e mail handle to interact instantly with Vietnam’s tax authorities.
As soon as registered, all the data together with in regards to the e-commerce platform, tax identification quantity, and e mail used will likely be despatched to the tax authorities, after which they might have the ability to pay tax instantly on the portal.
Steps for registration embrace:
- The overseas cross-border enterprise accesses the online portal of the GDT to file the tax registration file.
- The portal will ship a affirmation code to the e-mail handle registered by the cross-border enterprise.
- The cross-border enterprise makes use of the affirmation code to submit the tax registration file on the portal.
- The portal sends a receipt discover of the digital tax file to the cross-border enterprise.
- After receiving the tax registration file, the tax authority will examine particulars and data within the tax registration file
- If accredited, the tax authority will ship a transaction code to entry and pay tax on the portal. If not, then the tax authority will notify of any further paperwork to be submitted for correction and resubmission.
There aren’t any charges or costs for utilizing the online portal.
International cross-border companies are required to make quarterly tax declaration. The primary direct registration could be completed utilizing Kind 01/NCCNN whereas subsequent quarterly declarations could be made utilizing Kind No. 02/NCCNN as per Round 80.
Cross-border suppliers are required to pay VAT and CIT calculated as a proportion of the enterprise income generated from Vietnam. Companies nonetheless can perform tax exemption or discount procedures below the related double tax avoidance settlement (DTAA).
Companies that face difficulties can contact the help offered instantly on the internet portal.
Cross border platforms to be strictly scrutinized for tax compliance
The GDT has additionally been ordered to compile a listing of all cross-border platforms in Vietnam with their web sites and registered addresses.
The event comes after Vietnam issued Round 80 guiding the implementation on the Legislation on Tax Administration. Round 80 got here into impact on January 1, 2022, and supplies steerage on tax administration for e-commerce enterprise actions primarily based on digital platforms.
As per the Round, companies that don’t register with the Vietnamese tax authorities will likely be topic to withholding funds. Enterprise organizations or firms conducting transactions with overseas cross-border platforms are required to withhold tax and deposit to the tax authorities. For people that conduct transactions with overseas cross-border platforms – the financial institution or fee supplier will likely be requested to withhold tax fee. If this isn’t potential then the financial institution or fee supplier should monitor the quantity paid by the people and report it to the tax authorities on the tenth of every month.
The GDT can even preserve a listing of overseas cross-border companies that will likely be shared with banks and fee suppliers for the gathering of taxes.
The tax authorities acknowledge that it’s difficult to tax e-commerce actions as a number of companies don’t preserve bodily workplaces in Vietnam. As well as, people and companies utilizing social media to promote companies or merchandise don’t challenge invoices and don’t pay taxes. Monitoring funds turns into more difficult when merchandise that aren’t bodily akin to software program or music are bought.
Thang Vu, Affiliate Supervisor, Tax at Dezan Shira & Associates’ Ho Chi Minh Metropolis workplace notes that the brand new portal will assist make it handy for overseas cross-border platforms to pay tax instantly quite than use a 3rd occasion. As well as, Vietnam goals to rectify the shortfall of tax assortment, significantly from overseas companies, on Vietnam-sourced revenue.
Vietnam’s tax authorities acknowledged that they’re at the very least 64 overseas service suppliers in Vietnam. Cross-border platforms like Google and Fb have been taxed US$218.5 million (VND 5 trillion) between 2019 and 2021. Vietnam’s authorities have been calling for strict tax compliance and taxing tech giants like Google and Fb saying that they account for 70 % of on-line advert revenues however don’t pay ample taxes
About Us
Vietnam Briefing is produced by Dezan Shira & Associates. The agency assists overseas traders all through Asia from workplaces the world over, together with in Hanoi, Ho Chi Minh Metropolis, and Da Nang. Readers could write to vietnam@dezshira.com for extra help on doing enterprise in Vietnam.
We additionally preserve workplaces or have alliance companions helping overseas traders in Indonesia, India, Singapore, The Philippines, Malaysia, Thailand, Italy, Germany, and the United States, along with practices in Bangladesh and Russia.
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