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Traders of e-commerce social networks must pay tax: Vietnam official

People who sell goods or offer services through social networks that operate like an online commerce trading floor must fulfill their tax liabilities as per laws, an official from a unit under the Vietnamese Ministry of Finance said Friday.

Local traders doing such business on sites like Facebook are concerned about whether the trade ministry’s Circular No.47 on e-commerce website management, slated to take effect on January 20, 2015, will require them to register it with the ministry and pay taxes.

A man poses with two vouchers bought from an e-commerce website in this photo illustration taken in Ho Chi Minh City.
A man poses with two vouchers bought from an e-commerce website in this photo illustration taken in Ho Chi Minh City.

Lai Viet Anh, deputy head of the e-commerce department under the trade ministry, spoke to Tuoi Tre (Youth) newspaper in clarifying some points of the new legal document.

Anh said social networks that allow members to trade goods have to register with the trade ministry to operate as an online commerce trading floor.

Such social networks are those that allow users to either open virtual booths or sub-websites to showcase or post advertisements for their goods and services, Anh elaborated.

As for members of these e-commerce social networks, she said they do not have to register their business with the ministry, but are still required to pay taxes as per the government’s Decree No.52.

The decree stipulates that those selling goods via online commerce trading floors must pay taxes as they do in real life.

“This means traders have to fulfill their tax responsibility no matter whether they run a real or virtual store,” Anh underlined.

Traders who sell goods via social networks that are not classified as an online commerce trading floor are thus not subject to the regulation.

What is still confusing is whether the trade ministry views Facebook fan pages as virtual booths, and whether the world’s largest social network is required to register with the ministry to operate as an online commerce trading floor in Vietnam.

If so, owners of Facebook stores will have to pay taxes.

Selling goods on Facebook is not uncommon in Vietnam, where anyone can sell anything via their personal project or a Facebook fan page.

Businesses also see the social network as an effective channel to reach their potential customers and promote their products.

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