Google paid VND 2.115 trillion or nearly $87.4 million in taxes to Vietnam from 2018 to August 2022, the state media reported on Monday. The tech company is currently the biggest tax contributor among cross-border and e-commerce platforms in Vietnam.
Vietnam has recently strengthened its tax collection policies after launching a web portal for foreign suppliers to fulfill their tax obligations in the country. Foreign suppliers or providers are those firms without permanent local offices and carry out digital platform-based businesses in Vietnam.
The portal was developed to help these businesses directly authorize tax registration, declaration, and payments in one online platform. Foreign firms, which are generally required to pay value-added and corporate income taxes every quarter, used to pay their taxes through a third party.
The Ministry of Finance said as many as 30 major online platforms have registered on the web portal since March. Aside from Google, Microsoft, Facebook, and Netflix have also been paying their taxes through the web portal.
Facebook and Microsoft contributed VND2.099 trillion ($86.7 million) and VND714 billion ($29.5 million), respectively.
From January 2018 to August 2022, the General Department of Taxation collected VND 5.588 trillion (nearly $230.86 million) in taxes from organizations and individuals earning income from online businesses.
For this year so far, businesses have made more than 2.85 million tax payments worth $26.29 million.
In April last year, Vietnam proposed new regulations that would compel tech giants like Google, Facebook, and Amazon to hand over more taxes and data. With these tech firms earning revenues in countries with little to no physical presence, national governments have long tried to reach a global consensus on taxing tech corporations untethered by borders.
With e-commerce also surging at a very fast rate, the country is also looking to create a more convenient but stricter tax policy for online sellers on platforms like Lazada and Shopee, as well as those selling through social media channels.
Tax authorities reported in August that many online traders have been trying to avoid taxes or passing the responsibility to buyers. With about 140 companies operating e-commerce platforms, Vietnam’s e-commerce boomed into a $13-billion industry in 2021. However, tax revenue from the sector has yet to reflect this growth.
Local tax offices have already been asked to enhance tax inspections for businesses generating income through selling goods and services online.