On December 15, 2022, the General Department of Taxation officially operated the e-commerce portal, and received information from e-commerce floors.

Taking people and businesses as the center of digital conversion

Implementing the provisions of Decree No. 91/2022/ND-CP, the tax authority has officially operated the E-commerce portal to receive information from e-commerce floors. According to information from the General Department of Taxation, from the first period of providing information to February 27, 2023, there were over 280 floors providing information on the E-commerce portal of the General Department of Taxation, of which, there were some floors that account for a large market share such as Shopee, Lazada, Sendo, VOSO, etc.

They provided information quarterly and the information complied with regulations such as general information, contact information, business address, permanent address, business service group, and bank accounts. Up to now, the tax authorities have information on 53,585 individuals and 16,003 organizations for sales registration on the e-commerce portal with nearly 16 million transactions and the total trading value is about VND 5,500 billion.

According to Ms. Ta Thi Phuong Lan, Deputy Director of the Department of Tax Administration of small and medium-sized enterprises, business households and individuals (General Department of Taxation), the support of the floor providing information by electronic form through the E-commerce portal of the General Department of Taxation helps to reduce administrative procedures, save costs to comply with tax laws in the direction of the Government which considers people and businesses as the center of digital transformation.

At the same time, the portal is capable of receiving information on a large scale, regularly and continuously from e-commerce floors through a modern, integrated information technology system, ensuring information security in accordance with the law. In order to support e-commerce floors to provide information in the standard format, the General Department of Taxation has upgraded the software to support declaration to help the floor output XML file to send through the E-commerce portal of the General Department of Taxation. Therefore, the organization which is the owner of an e-commerce trading floor can use an electronic tax account to log in and provide information on the e-commerce portal.

Prof. Dr. Hoang Van Cuong, Member of the National Assembly's Finance-State budget committee, said that it is necessary to consolidate legally to ensure a full legal basis to implement tax administration measures.

On the other hand, in ordinary commodity transactions, taxpayers appear at the place of tax administration, and the transactions on cyberspace, especially cross-border transactions, taxpayers do not appear. Hence, the management is not managing people involved in transactions but managing economic activities in reality. So, it is necessary to have a legal framework to implement the management work to ensure the synchronization between domestic law and international practices.

The General Department of Taxation will continue to coordinate with the Ministry of Industry and Trade to exchange information regularly about the list of websites/applications providing e-commerce services to support businesses as the owner of the E–commerce exchange in providing information as prescribed.

Carefully review companies and individual businesses

Through the first period of providing information, the number of individuals doing business through e-commerce in particular and on social networks like Facebook, Zalo, etc, is not small. The General Department of Taxation said that these are subject to tax law on business individuals. Accordingly, business individuals who do not distinguish business in the form of traditional or e-commerce business are subject to value-added tax and personal income tax if there is revenue of VND 100 million/year or more.

Ms. Ta Thi Phuong Lan said that in recent years, the tax sector has actively implemented propaganda solutions, supporting taxpayers, and coordinating with relevant agencies to exploit the personal information of online businesses.

Simultaneously, on the basis of information provided by E-commerce exchange on the E-commerce portal, tax authorities will exploit information about the business activities of organizations and individuals and conduct a review, put it into the management area, request to declare in accordance with the reality or adjust revenue if not appropriate.

In addition, with the information obtained, the tax sector will organize data analysis based on a large database platform, apply AI to issue warnings of risk-excess cases and propose appropriate tax administration measures for the operation of each taxpayer.

The representative of the General Department of Taxation affirmed that in case an individual fails to make tax declaration, payment or incomplete declaration of tax payable as prescribed, depending on the seriousness of the taxpayer, the tax authority will be handling violations in accordance with the Law on Tax Administration and Decree No. 125/2020/ND-CP of October 19, 2020 of the Government stipulating sanctioning administrative violations of tax and invoices.

Prof. Dr. Hoang Van Cuong noted that when collecting taxes on the digital platform, it is necessary to ensure the collection of the right subjects, and avoid tax evasion and loss of equality when traditional businesses have to pay taxes, while the ones through the digital platform evade tax.

Besides, in international cooperation, countries need to work with each other to avoid transferring prices, transfer of taxes, and avoiding the situation when countries allow the evasion of taxes.