According to the recently approved amended Law on Tax Management, companies that have not opened their representative offices in Vietnam such as Google, YouTube and Facebook are obliged to pay taxes. However, experts say, to effectively manage this source of taxes, banks are urged to tighten their grip on e-commerce operations.

Currently, Google and Facebook provide online advertising services in Vietnam in two different ways: Firstly, via domestic ads agents and secondly, online trade and online payment with credit cards and e-wallets.

For the second mode of operation, difficulties can be seen in tax management.

According to ANTS, a leading technology-driven advertising platform in Southeast Asia, in 2018, total spending for online advertisement in Vietnam hit some 550 million USD, but domestic ads agents raked in only 150 million USD. A huge amount of taxes was not collected.

The amended Law on Tax Management regulates giants such as Google, YouTube and Facebook are obliged to pay taxes although they are yet to open their representative offices in Vietnam. However, tax agencies cannot be successful in tax managment without coordination from banks and businesses.

Experts say strengthening the management of cross-border money flows plays an important role in tax collection from e-commerce operations. -VNA