Foreign tech giants contribute $166 million in taxes in H1

According to the tax authority's latest report, all 57 multinational corporations mentioned have demonstrated commendable tax compliance by registering, declaring, and fulfilling their tax obligations through the electronic portal tailored for foreign suppliers. The portal, operational since March of the previous year, has served as a crucial platform for facilitating seamless tax transactions.

During the first six months of 2023, these foreign suppliers collectively contributed over $165 million in taxes. This includes approximately $141 million from direct tax declarations through the electronic portal, while an additional $22.5 million was withheld and paid by domestic entities on behalf of the foreign corporations.

E-commerce emerges as a revenue driver

The exponential growth of e-commerce has emerged as a significant driver of tax revenue for the Vietnamese government. During the initial five months of the current year, tax revenue from e-commerce activities soared to $10.25 million, representing a substantial 34 per cent of the total revenue collected in the preceding year. Comparatively, tax revenue from e-commerce stood at $29.8 million in 2022 and $10.9 million in 2021.

According to Vnexpress, data received from 333 e-commerce platforms through the electronic commerce portal, introduced in late 2022, showcases the sector's immense economic significance. In the first quarter of 2023, these platforms witnessed active participation, with 64,300 individual sellers and 22,840 business entities conducting an impressive 9 billion transactions, amounting to a total value of $479 million.

Striving for enhanced tax management

As the landscape of digital commerce evolves, the GDT remains committed to fortifying tax management practices. With the goal of ensuring greater efficiency in tax administration, the general department is currently developing comprehensive regulations to extract and leverage data from e-commerce platforms.

To uphold transparency and adherence to tax regulations, the tax authority is diligently conducting audits and cross-referencing information pertaining to certain taxpayers. This includes owners of e-commerce platforms, payment intermediaries, foreign partner companies operating in Vietnam, and foreign suppliers without established business entities in the country.

Recent tax examinations have resulted in significant financial outcomes. The tax authorities concluded examinations at 15 companies, leading to tax penalties, fees, and arrears amounting to $5.4 million. Additionally, loss reductions totalling $41 million were identified, along with a deduction of $4.75 million in VAT.

An Phat continues to fight for VAT reimbursement The long-standing dialogue between Hanoi Tax Department and the environmentally friendly plastic corporation An Phat is becoming increasingly strained, with ongoing disputes over VAT refunds causing tension and frustration.

Foxconn earns $317 million in after-tax profit in Vietnam The world's largest contract manufacturer and assembler of electronics, Hon Hai Precision Industry Co., Ltd., trading internationally as Foxconn, outperformed its industry rivals last year, reportedly earning VND7.5 trillion ($317 million) in after-tax profit from its 16 Vietnamese plants.