Vietnam increases supervision of personal income tax

A screenshot of a seller’s live stream. Tax authorities are calling on individuals and businesses, especially those selling products on e-commerce platforms, to meet their tax obligations. — Photo by VNS Bồ Xuân Hiệp

HCM CITY – Vietnamese authorities are tightening tax supervision of individuals who earn income from livestreamed sales on e-commerce and social media platforms to ensure their compliance with tax regulations.

Prime Minister Phạm Minh Chính directed the Finance Minister to closely monitor live-streamed sales via e-commerce platforms, with those earning more than VNĐ 100 million per year obliged to declare and pay taxes in accordance with the Personal Income Tax Law.

During a recent cabinet meeting, Deputy Finance Minister Nguyễn Đức Chi said that many content creators, such as YouTubers, have been hit with high back taxes for failing to disclose their earnings in past years.

Companies in areas such as marketing, IT, services, digital commerce and social media are among those identified as owing significant amounts of tax.

More than 460 people have already been identified in Hà Nội making significant earnings through these platforms, and more names are expected to be added to the list.

Meanwhile, authorities in HCM City are contacting sellers on platforms such as Google, Facebook and YouTube who have not reported their income or paid taxes, warning them of potential penalties for tax evasion.

According to McKinsey & Company, live streaming sales are estimated to account for 20 percent of e-commerce revenues by 2026.

To improve tax collection, authorities are simplifying tax returns and payments to reduce administrative costs.

Tax authorities will cooperate with law enforcement agencies to strengthen supervision of e-commerce transactions and revenues.

People with outstanding tax debts will not be able to leave the country until they repay their obligations and may face public scrutiny in the media.

The Prime Minister also directed the central bank to strengthen monitoring of electronic payment transactions to support e-commerce.

It also ordered lending institutions and payment intermediaries to help manage taxes by providing information on foreign suppliers and income earned from cross-border platforms.

Additionally, tax authorities said they would also improve personal income tax management for shareholders receiving share dividends and bonus share payments.

At the end of last year, the tax office announced that the total tax debt was VNĐ 164 trillion ($6.4 billion).

In a similar move, the CEO of Trung Nam Group, a major producer of hydro and renewable energy, was banned from leaving the country due to the company’s VNĐ21 billion ($840,000) tax debt. —VNS