From December 5, 2020, commercial banks in Vietnam are obligated to provide information on taxpayers' bank accounts and transactions to the tax department.
|From December 5, commercial banks are obligated to provide information on taxpayers' bank accounts |
Decree No.126/2020/ND-CP on providing guidance on the implementation of the Law on Tax 2019, which came into effect on December 5, requires banks and payment intermediary services providers to provide essential information of taxpayers’ payment bank accounts to the local tax authorities.
Luu Duc Huy, head of the Department of Tax Policies under the Vietnam General Department of Taxation, said that tax agencies could monitor the cash flows generated by transnational businesses, especially those that operate online.
"The single most important tool for us is to closely monitor the cashflow and this could be achieved with the cooperation of commercial banks," he said.
Dang Ngoc Minh, the general department's deputy head, also added, “We prefer foreign-based businesses to register with tax authorities. However, should they fail to comply, we will be collecting evidence and request commercial banks to track personal accounts that were involved."
According to Vietnam News, payments made to personal bank accounts from Google, Facebook, and YouTube will be monitored for irregularities. In the meantime, tax agencies continue to encourage individuals to come forward and register and declare their income.
Furthermore, banks shall withhold and pay tax obligations on behalf of overseas suppliers who have yet to register for tax declaration and make payments. Plus, banks are responsible for monitoring the amount transferred to overseas suppliers and sending this information to the General Department of Taxation monthly if individuals purchase goods and services from foreign suppliers and pay by credit card or other forms.
Vietnam faces a lot of troubles in collecting taxes from tech firms, such as Netflix, Google, Facebook, or YouTube because they have no official presence in the market, creating a big gap for their tax avoidance.