E-commerce platform: How to collect tax from foreign enterprises?
Báo Dân trí•22/11/2024
(Dan Tri) - The draft revised Law on Corporate Income Tax supplements regulations on tax collection for foreign enterprises doing e-commerce business and doing business on platforms in Vietnam.
On the morning of November 22, authorized by the Prime Minister , Deputy Prime Minister Le Thanh Long presented a report on the draft revised Law on Corporate Income Tax. Regarding taxpayers and taxable income, the draft Law supplements regulations that foreign enterprises providing goods and services in the form of e-commerce and digital platform business must pay tax on taxable income arising in Vietnam. In addition, permanent establishments of foreign enterprises providing goods and services in Vietnam are also included in the tax paying group. Deputy Prime Minister Le Thanh Long (Photo: QH). In addition, the Deputy Prime Minister said that it also added regulations on other incomes (other than income from main production and business activities) of enterprises in general, taxable incomes arising in Vietnam of foreign enterprises (with or without permanent establishments in Vietnam) and incomes abroad of Vietnamese enterprises. In particular, incomes abroad must pay additional corporate income tax according to the regulations on the synthesis of minimum taxable income (IIR) in Resolution No. 107/2023/QH15. Regarding the determination of taxable income and tax calculation methods, according to Mr. Le Thanh Long, the draft Law amending and supplementing stipulates the selection of tax calculation periods according to the calendar year or fiscal year. Foreign enterprises generating income in Vietnam from e-commerce business activities and business on digital platforms shall implement tax calculation periods according to the law on tax administration. In addition, it also provides detailed regulations on the principles of determining revenue and the time of determining revenue for calculating corporate income tax. In addition, the draft Law removes the provisions on the place of payment of corporate income tax to implement uniformly and synchronously according to the provisions of the Law on Tax Administration. Regarding corporate income tax rates, the draft Law adds tax rates (15% and 17%) applied specifically to enterprises with revenue under VND 3 billion, enterprises with revenue from VND 3 billion to VND 50 billion. Amend and supplement regulations on tax rate frameworks for oil and gas exploration, exploration and exploitation activities, and tax rates for exploration, exploitation and processing of rare resources. Chairman of the National Assembly 's Finance and Budget Committee Le Quang Manh (Photo: National Assembly). In his report on the review of the draft revised Law on Corporate Income Tax, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh said that the draft Law supplements regulations on tax collection for taxpayers who are foreign enterprises doing e-commerce business, doing business on digital platforms paying tax on taxable income arising in Vietnam and supplements regulations on the type of "virtual" permanent establishment (without physical presence). With these provisions of the draft Law, the Chairman of the Finance and Budget Committee proposed clarifying the possibility of actual corporate income tax collection for foreign enterprises without a presence in Vietnam supplying goods to Vietnam through transactions on e-commerce platforms. In addition, it is also necessary to consider the appropriateness of the scope of Vietnam's tax authority in the case where the above foreign enterprises have established permanent establishments in Vietnam compared to the provisions in the signed tax treaties. Application of the Law in case of discrepancies with the concluded Tax Treaty (regarding the type of permanent establishment without physical presence).
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