Banks will be able to deduct the tax payments of suppliers based in foreign countries—that conduct e-commerce or digital transactions with organizations and individuals in Vietnam—from their bank accounts,
according to Decree 126/2020, which will take effect on December 5.
|Bank tellers work at a bank in HCM City. – Photo: Thanh Hoa|
The decree, which guides the implementation of the Law on Tax Administration, regulates that the General Department of Taxation will work with the relevant authorities to determine the name and website address of foreign e-commerce suppliers that do not register in Vietnam and provide this information to the banks and payment intermediary service companies.
Banks are also required to keep records of payments remitted overseas and provide this data to the General Department of Taxation on a monthly basis if the Vietnamese individual customers use a payment method whereby withholding cannot be done, such as payments via credit cards.
Lawyer Truong Thanh Duc, chairman of the Board of Members of Basico law firm, said this regulation will help reduce tax evasion from cross-border e-commerce transactions.
According to clause 30 of the decree, banks are asked to provide the tax authorities with bank account details of the taxpayers within 90 days from the effective date of this decree. Besides, they will have to provide information on transactions made via such accounts when requested by the local tax authorities.
Lawyer Duc said the banks’ provision of bank account details for tax authorities does not violate the information safety regulations because the tax authorities are fully responsible for protecting the information. “Even Switzerland, whose banking system is well-known for information safety, has allowed banks and tax authorities to share information to prevent tax evasion,” he said. SGT
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