Cross-border transactions are in the crosshairs as Decree 126/2020/ND-CP – the latest regulation on tax administration – is to come into effect on December 5, said senior tax officials in a press conference on Tuesday.
Commercial banks are to be required to turn taxpayers’ account information over to tax agencies. For the time being, the agencies only require the names of the owners, account numbers and the dates on which the accounts were opened or closed, according to Lưu Đức Huy, head of the Department of Tax Policies under the Vietnam General Department of Taxation.
Huy stressed the need for tax agencies to be able to monitor the cash flow generated by transnational businesses, especially those that operate online.
“The single most important tool for us is to closely monitor the cashflow and this could be achieved with the cooperation of commercial banks,” he said.
For instance, commercial banks and other financial institutions have an obligation to fulfil any tax duties of their foreign-based clients, who sold goods and services – including e-commerce products and services – into Việt Nam’s market yet failed to register or failed to declare income or meet financial duties to the country’s tax authority.
In cases the banks were unable to do so, they must compile a list of transactions and the amount transferred, which will later be submitted to the general department.
“Commercial banks are among many other tools at our disposal to monitor and manage revenue by e-commerce businesses in and out of the country,” Huy said.
Internet giants such as Google, Facebook and Youtube are likely to be singled out and put under scrutiny under the new decree.
Not just business-to-business transactions, personal account transactions will also be monitored, said Đặng Ngọc Minh, the general department’s deputy head.
“We prefer foreign-based businesses to register with the tax authority. However, should they fail to comply we will be collecting evidence and request commercial banks to track personal accounts that were involved,” Minh said.
Meanwhile, payments made to personal bank accounts from Google, Facebook and Youtube will be monitored for irregularities. In the meantime, tax agencies continue to encourage individuals to come forward and register and declare income with the authority.
The general department has been working on a solution for big tech companies such as Amazon, Netflix, Google, Facebook and Youtube to meet their financial duties for businesses in Việt Nam.
This article was originally published on Vietnamnews
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Source: Vietnam Insider