The initiative was outlined in a directive released last week by the General Department of Taxation (GDT) to local tax departments, aiming to tighten control over sales and commissions from e-commerce livestream activities.

Livestream tax crackdown intensifies, illustration photo/ Source: freepik.com

Specifically, tax authorities will compile a list of organisations and individuals suspected of violations following audits and inspections. If tax evasion is detected, the case files will be handed over to the police for prosecution.

According to NielsenIQ, in the first half of 2024, 95 per cent of customers purchased products through online channels. On average, there are 2.5 million livestream sales sessions monthly, with over 50,000 sellers participating, as reported by the Vietnam E-commerce Association.

The GDT reported that nearly 43,000 businesses and individuals were audited for tax declaration and payment in the first half of the year, resulting in the collection of nearly $400 million, an increase of approximately $140 million compared to the same period last year. Tax authorities also addressed 4,560 violations, collecting and fining nearly $12 million. Additionally, to enhance control over sales on e-commerce platforms, the GDT requires all online sellers to issue e-invoices for all transactions.

Dang Ngoc Minh, deputy director-general of the GDT, revealed at a seminar in mid-July that tax authorities are enhancing their tax management database for e-commerce and will intensify audits and inspections of tax compliance among organisations and individuals engaged in digital business activities.

Minh said the GDT had teamed up with the Ministry of Industry and Trade, the Ministry of Information and Communications, and banks to collect data on over 900 e-commerce platforms, nearly 290 online sales applications, around 144 million payment accounts, and 130 entities in telecommunications, advertising, radio, and television sectors.

“Collaboration with ministries, agencies, and local authorities has significantly improved our tax management. Enhanced communication efforts have raised tax compliance awareness among e-commerce taxpayers, particularly individuals. Consequently, many e-commerce businesses have voluntarily registered, declared, and paid their taxes,” he said.

Revenue from e-commerce tax management in the first half of this year reached $72 billion, with approximately $2 billion in taxes paid. Meanwhile, the Ho Chi Minh City Tax Department reported that from Q4/2022 to the end of Q1/2024, they collected data on 159 e-commerce platforms, 158 websites, and 145 apps.

The department reviewed and addressed tax issues for over 7,100 taxpayers, including nearly 2,200 enterprises and almost 5,000 business households and individuals. They also encouraged and assisted taxpayers in declaring and paying $52 million in taxes and addressed tax evasion cases involving 1,300 taxpayers, resulting in $2.88 million in back taxes and fines.

However, experts suggest that regulatory adjustments are necessary to keep pace with the evolving online business landscape. “Current regulations require business registrants to have a fixed address. However, e-commerce sellers often do not have a stable location - they might be in Hanoi for a while, then move to Nghe An, and later to Ho Chi Minh City,” an industry insider noted.

Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultancy Association, acknowledged that many individuals engaged in livestream sales generate substantial revenues. However, she noted that many online sellers, including those conducting livestream sales, are not fully aware of their obligations. “As a result, the registration, declaration, and payment of taxes are often delayed,” she said.

Cuc advised that individuals engaged in online sales need to register and fulfil their tax obligations diligently, warning that tax evasion of VND100 million ($4,000) or more could lead to legal trouble.

“Business operators with tax codes should proactively declare, calculate, and pay their taxes. Larger business households should consider converting to enterprises for more convenient tax registration and payment,” Cuc said.