E-commerce platform pays tax on behalf of seller
On November 19, the National Assembly Standing Committee gave opinions on explaining, accepting and revising the draft Law amending and supplementing a number of articles of the Securities Law; Accounting Law; Independent Audit Law; State Budget Law; Law on Management and Use of Public Assets; Tax Management Law; Law on National Reserves (1 law amending 7 laws).
Reporting a summary of some major issues, Chairman of the Finance and Budget Committee Le Quang Manh said that in the process of explaining, receiving and revising the Draft, some of the amended and supplemented contents of the Law on Independent Auditing are related to the provisions of the Law on Handling of Administrative Violations; amending and supplementing a number of articles of the Law on Tax Administration are related to the provisions of the Law on Personal Income Tax.
Accordingly, the Standing Committees of the Finance - Budget, Economic, Legal Committees and the Drafting Agency agreed to submit to the Standing Committee of the National Assembly a report to the National Assembly for consideration and supplementation of the amendments to the above two Laws. Therefore, it is necessary to amend the name of this draft Law to "Law amending and supplementing a number of articles of the Securities Law, the Accounting Law, the Independent Audit Law, the State Budget Law, the Law on Management and Use of Public Assets, the Tax Management Law, the Personal Income Tax Law, the National Reserve Law, the Law on Handling of Administrative Violations".
Regarding amendments and supplements to a number of articles of the Law on Tax Administration, according to current regulations, sellers on e-commerce platforms must self-declare, pay taxes and take responsibility. E-commerce platforms are only responsible for providing information to tax authorities. However, in the Draft amendments and supplements to a number of articles of the Law on Tax Administration, the Government proposes that e-commerce platforms and digital platforms must also deduct, pay taxes on behalf of, and declare the deducted tax amount for sellers (households and individuals doing business) on the platform. The dossiers, procedures, methods and responsibilities for declaring and paying taxes on behalf of e-commerce platforms and digital platforms will be specified in detail by the Government.
Suppliers operating e-commerce and digital platforms must also register, declare and pay taxes in Vietnam. Specifically, foreign suppliers operating e-commerce and digital platforms that generate income such as Facebook, Apple, Netflix... must directly or authorize their registration and tax declaration. This regulation is expected to take effect from January 1, 2025.
Prevent tax loss, reduce administrative procedures
Regarding this issue, the Standing Committees of the National Assembly and the drafting agency agreed to submit to the Standing Committee of the National Assembly a report to the National Assembly to supplement the content of amending a number of articles of the Law on Personal Income Tax. Accordingly, amending and supplementing Article 33 of the Law on Personal Income Tax, managers of e-commerce floors and digital platforms must deduct, pay taxes on behalf of, and declare deducted taxes for transactions of sellers on these platforms.
Previously, after the discussion session in the group, in the report explaining the opinions of the delegates, the Ministry of Finance - the drafting agency affirmed that technically, the floors can completely declare and pay taxes on behalf of the seller.
The Ministry of Finance said that the regulation requires e-commerce platforms to deduct, declare, and pay taxes on behalf of sellers to prevent tax losses and reduce costs and administrative procedures. Because only one contact (e-commerce platform, digital platform) needs to pay and declare tax obligations on behalf of hundreds of thousands of individuals and business households on the platform.
According to the Ministry of Finance, this regulation may cause e-commerce platforms to incur additional costs in upgrading their systems to determine the amount of tax deducted and paid on behalf of sellers, but “this level is insignificant compared to the cost of hiring additional tax and customer care personnel”. In addition, to ensure fairness, the regulation on e-commerce platforms deducting, declaring and paying taxes on behalf of sellers will apply to both domestic and foreign platforms.
Reporting at the 8th Session, Deputy Prime Minister and Minister of Finance Ho Duc Phoc said that the tax sector has applied many measures to prevent e-commerce tax losses. Tax authorities will use artificial intelligence (AI) tools to control revenue and sales on e-commerce platforms. For domestic e-commerce platforms, the tax sector will start collecting from this year. Of which, Hanoi alone has collected about 35,000 billion VND as of early November.
According to schedule, the Law amending and supplementing a number of articles of laws in the financial sector will be approved by the National Assembly on the morning of November 29, 2024.
