But they might still have to provide Vietnamese users’ information when required for ‘national security.’
Vietnam has made a u-turn on a draft bill that would have required foreign companies such as Facebook and Google to install servers in the country.
The draft was submitted by the Ministry of Public Security last year over national security concerns, but faced strong opposition from international organizations and companies.
The Vietnam Chamber of Commerce and Industry said the bill went against the commitments Vietnam had made when it joined the World Trade Organization and EU-Vietnam Free Trade Agreement.
A joint letter sent by the U.S., Australian, Canadian embassies and the European Union in August 2017 also voiced strong concerns over the bill, saying it went against the trade commitments Vietnam had made.
This opposition prompted a meeting on Wednesday between the National Defense Committee (CNDC) and Diplomatic Committee, which concluded that foreign companies do not need to install servers in Vietnam.
However, authorities decided that a clause in the bill stating that foreign businesses should have representative offices in Vietnam and that they should store Vietnamese users’ data should remain.
The CNDC said these requirements would help if there is a cross-border internet security breach involving Vietnamese users, while providing a way of removing any information posted against the Communist Party or governement.
Tax concerns were also raised at the meeting regarding Facebook and Google, as for the last two years, the country has only collected VND120 billion ($5.2 million) in tax because the companies do not have representative offices in Vietnam, according to the Ministry of Finance.
Due to the lack of representative offices for Facebook and Google, Vietnam’s tax authorities can only charge Vietnamese advertising agencies and businesses that use the two digital giants’ services.
Facebook announced last year that it will change to a local selling structure from using a tax avoidance method which involves routing sales through Ireland. The new form of operation is believed to “provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries,” its CFO said in a press release.
The company plans to have all its offices in place in the first six months of 2019.
Source: VnExpress
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