Vietnamese firms paid millions of tax on behalf of Google, Facebook in two years
Vietnamese tax authorities can not directly collect tax from the two giants, which having no official representative in the country.
The information was announced at the meeting of the National Assembly on April 4, basing on a report of the Committee for National Defense and Security about the draft Law on cyber security.
Accordingly, until now Google and Facebook haven't had any official representative in Vietnam yet. Sequentially, in terms of their online advertising activities, tax authorities can only collect tax from revenues earned by their Vietnamese partners, advertising agencies or direct service buyers which are based in Vietnam.
Figures show that in 2016, domestic firms, on behalf of Google (including Youtube) and Facebook paid a tax amount of about VND46.9billion (US$2.05 million), while that figure in the first 9 months of 2017 is VND73.2 billion (US$3.2 million).
Beside the concern of tax invasion, it’s the national sovereignty issue that concerns the regulators most while drafting the Law on cyber security. In the latest version of draft law, foreign internet and telecommunication providers like Facebook and Google are not requested to host their servers in Vietnam compulsorily, though the draft still requires them to locate representative offices and Vietnam users’ database in the country.
Such adjustment, according to the Committee, will serve the purpose of protecting the national sovereignty through the access to local users' database. In addition, it’s more feasible for the government to deal with cyberspace' violation.
Also, the draft law is expected to create legal framework for competent authorities in supervising foreign internet-based service providers operating in Vietnam, with an aim to prevent losses to the state budget. Besides, it will facilitate a fair basis for domestic and foreign companies to compete.
Earlier, some foreign ambassadors to Vietnam warned the regulation that foreign Internet – telecommunication providers have to put serve in Vietnam, saying it goes against trade commitment of the country.
Until January 2018, Google and Facebook have hired nearly 1,800 severs and 411 servers of Vietnam enterprises, respectively for data storage in the country, specified Ministry of Public Security.
Accordingly, until now Google and Facebook haven't had any official representative in Vietnam yet. Sequentially, in terms of their online advertising activities, tax authorities can only collect tax from revenues earned by their Vietnamese partners, advertising agencies or direct service buyers which are based in Vietnam.
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Figures show that in 2016, domestic firms, on behalf of Google (including Youtube) and Facebook paid a tax amount of about VND46.9billion (US$2.05 million), while that figure in the first 9 months of 2017 is VND73.2 billion (US$3.2 million).
Beside the concern of tax invasion, it’s the national sovereignty issue that concerns the regulators most while drafting the Law on cyber security. In the latest version of draft law, foreign internet and telecommunication providers like Facebook and Google are not requested to host their servers in Vietnam compulsorily, though the draft still requires them to locate representative offices and Vietnam users’ database in the country.
Such adjustment, according to the Committee, will serve the purpose of protecting the national sovereignty through the access to local users' database. In addition, it’s more feasible for the government to deal with cyberspace' violation.
Also, the draft law is expected to create legal framework for competent authorities in supervising foreign internet-based service providers operating in Vietnam, with an aim to prevent losses to the state budget. Besides, it will facilitate a fair basis for domestic and foreign companies to compete.
Earlier, some foreign ambassadors to Vietnam warned the regulation that foreign Internet – telecommunication providers have to put serve in Vietnam, saying it goes against trade commitment of the country.
Until January 2018, Google and Facebook have hired nearly 1,800 severs and 411 servers of Vietnam enterprises, respectively for data storage in the country, specified Ministry of Public Security.
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