Ms. Nguyen Thi Cuc, President of Vietnam Tax Consultants Association

The Government and the Prime Minister have many resolutions, directives, decisions, and telegrams to combat tax fraud in e-commerce activities. Is it true that tax evasion in e-commerce activities is very common, Madam?

Preventing tax losses in general and tax losses from e-commerce activities in particular is one of the important tasks of tax authorities, aiming to ensure a healthy and equal business environment.

The Government and the Prime Minister pay special attention to the development of the digital economy, including e-commerce activities. For the digital economy and e-commerce to develop, it is necessary to strengthen state management, including tax management. Therefore, Resolution 93/NQ-CP dated June 18, 2024 of the Government on key tasks and solutions to promote growth, control inflation and stabilize the macro-economy requires the Ministry of Finance to preside over and coordinate with ministries, branches and localities to focus on combating tax losses, especially from e-commerce.

It must also be said that e-commerce is a very broad concept. It can be understood that e-commerce is a form of online business that uses information technology platforms with the support of the Internet to conduct online transactions, exchanges, and payments, not just buying and selling goods on social networks or on e-commerce trading floors.

According to Decree 85/2021/ND-CP, in addition to buying and selling and exchanging goods, e-commerce also includes financial services, banking, credit, advertising, distribution, digital product publishing, radio and television services... Therefore, in general, "tax loss in e-commerce activities is still common" is not entirely accurate.

Recently, on social networks and mass media, there has been a lot of information about livestream sales sessions reaching tens, even hundreds of billions of VND in revenue. Do you question tax fraud in livestream sales sessions reaching hundreds of billions of VND?

To answer the question of whether livestreaming individuals with "huge" revenue is fraudulent or not, we need to know whether this is actual revenue, closed orders, sold goods and collected money, or just a self-promotion trick of streamers (livestreamers) and brand owners.

Even if the revenue is only 40-50% of the advertising, it is still very large and tax evasion and tax fraud are very difficult. Because the brand owner is the enterprise that must fulfill all tax obligations when the goods are sold, and the streamer is the hired advertiser, paid by the enterprise, when paying, the enterprise has deducted 10% of personal income tax and paid it to the state budget. At the end of the year, the streamer must fulfill the tax settlement obligation, if the amount temporarily deducted is not enough, they must pay more, if they pay more, they will be refunded. In general, with e-commerce activities with large revenue, it is very difficult to evade taxes.

Is there any omission in tax collection from streamers, madam?

Implementing the Government's direction, the tax sector is very thorough in combating tax fraud in e-commerce activities. The Ministry of Finance has a Project on Tax Management for e-commerce activities. In particular, recently, the Prime Minister issued Official Dispatch 56/CD-TTg, which requires state management agencies to strengthen inspection and examination of livestream sales activities. In case of detecting organizations and individuals selling goods, receiving commissions from advertising and selling goods with signs of violating the law, they will be transferred to the competent authorities for handling.

“Transfer to competent authorities for handling” can be understood as the police agency can consider investigating and prosecuting tax evasion cases.

As Chairman of the Vietnam Tax Consulting Association, I advise individuals participating in e-commerce activities not to evade taxes, because local tax authorities are very strict in tax management for this activity. For example, in the first 6 months of this year, the Ho Chi Minh City Tax Department reviewed 7,135 enterprises, households and individuals doing e-commerce business, collecting over 1,298 billion VND in taxes; collecting and penalizing 1,320 cases with a total amount of over 72 billion VND.

Hanoi Tax Department has identified and compiled data on e-commerce activities of 418 enterprises owning e-commerce platforms, online sales websites, 670 entities trading digital products and content; 54 enterprises providing accommodation services, individuals selling online with large revenue.

Similarly, the Tax Departments of Quang Ngai, Da Nang, Khanh Hoa, Nghe An... are also very determined in fighting against tax losses from e-commerce activities.

Many individuals doing e-commerce business are thinking about “quitting the profession” because the tax authorities are determined to fight against tax losses from online sales. What do you think about this?

It must be affirmed that tax policy applies to all production and business activities, anyone participating in business must declare and pay taxes, regardless of traditional business or e-commerce. Why do traditional businesses have to pay taxes, but online sales pay taxes equally to traditional businesses, and consider "quitting the profession"? I think this phenomenon (if any) is because online sellers have not learned about tax policy, so they may have to pay more than traditional businesses.

Most online sellers and livestreamers do it spontaneously, do it part-time, overtime, or in their spare time and do not register for taxes or register for business. According to regulations, in these cases, they must pay personal income tax according to the progressive tax schedule from 5% to 35% depending on their income in the year. When the tax authority conducts an inspection, they have to pay personal income tax, collect back taxes, and late payment fees from previous years, so they feel they have to pay too much.

My advice is that if you participate in large-scale online sales and livestreaming, individuals should register their business and pay taxes according to the declaration method, fully complying with regulations on invoices, documents, and accounting. The tax obligation to be paid is calculated based on the total revenue rate of only 1.5%, including 1% value added tax and 0.5% personal income tax for goods distribution and supply activities; the tax rate of 5% applies to other service provision activities.

Thus, the amount of tax payable for registered households and individuals is much lower than that of unregistered households. If a household or individual conducts business professionally, it is advisable to establish a business because it is subject to corporate income tax at a common rate of 20% calculated on taxable income and deducts all types of expenses, including fixed assets, equipment, and machinery used for business.

If you are a small business owner or an unprofessional online seller, you should still register your business and pay the tax rate set by the tax authority; in case of revenue of less than 100 million VND/year, you are exempted from all taxes. If livestreamers register their business as individual business households, they will pay tax as business households at a tax rate of 7% of the amount received from the brand, including 5% value added tax and 2% personal income tax, instead of having to pay personal income tax from 5% to 35%.