Unclear provisions in new tax-related Decree

Vietnamese citizens and commercial banks alike have expressed uncertainty over the new Decree 126 on Tax Administration that requires banks to provide customers’ information as well as deduct tax payables on behalf of the tax department.

Decree 126/2020/ND-CP, effective from December 05, 2020, stipulates that commercial banks must provide information on all customers’ account including name of the account holder, balance, and transaction data within 90 days since the Decree takes effect.

Unclear provisions in new tax-related Decree

This info is submitted at the request of the Head of Tax Authorities to determine tax obligations and implement coercive measures in accordance with the law.

However, representatives of commercial banks expressed that the above regulation contradicts the Law on Credit Institutions, which states that banks are not allowed to provide information related to customer accounts unless otherwise required by authorized state agency and must be approved by the customer.

Owner of a commercial bank in HCMC demanded that the gov’t clarify whether tax departments are categorized as competent state agencies. “There’s a difference between providing customer’s account info to the police and to a tax department”, the person exclaimed.

Furthermore, most commercial banks do not have enough resources to provide mass data at the request of tax authorities, said a representative from Agribank.

There needs to be an established arrangement between the tax authority and the banking system to pinpoint the customers in question, as well as convenient and synchronized methods for providing the info and commitment to confidentiality, said a representative of VietinBank.

On the other hand, Decree 126 also obliges commercial banks to withhold income tax at the source for electronic transactions, and expenses incurred by taxpayers related to overseas e-commerce channels or social networking sites like Amazon, Facebook, or YouTube.

 

It also states that if the foreign supplier has not declared taxes in Vietnam, the intermediary bank must deduct payables and pay for products, goods and services incurred by Vietnamese buyers.

The intermediary bank must also keep tabs on any transaction via card payment or similar that they cannot withhold and report to the General Department of Taxation monthly.

Regarding this matter, a representative of Vietcombank said commercial banks do not have the authority and legal status to deduct or pay taxes on behalf of tax authorities, unless requested in writing to assist on a non-periodic basis.
Many spokesmen also pointed out the risk of banks making incorrect deductibles or without consent of the account holder which might lead to complaints or even lawsuits.

From another perspective, the new provisions in Decree 126 aimed to combat tax evasion from online retailers are necessary, but the question remains as to whether or not tax departments can implement them correctly.

Although a non-cash payment policy has been implemented for a long time, up to 80% of Vietnamese people still prefer using cash, which makes it difficult to trace small transactions.

Experts suggest the gov’t issue a tax reduction policy for online retailers and have all transactions done through banks to achieve effective tax collection.

SGGP

Tax collections from cross-border platforms too low

Tax collections from cross-border platforms too low

The amount of tax collected from cross-border platforms in the first 11 months of 2020 was about VND1 trillion. But the figure doesn’t truly reflect the real activities of the platforms in Vietnam.

 
 

Other News

.
Finance ministry studies legal framework for cryptocurrencies
Finance ministry studies legal framework for cryptocurrencies
BUSINESSicon  02/04/2021 

The Ministry of Finance is studying the legal framework for managing cryptocurrencies on stock exchanges which would pave the way for legal cryptocurrency transactions in Vietnam.

Plenty of room remains for growth of consumer credit market: Insiders
Plenty of room remains for growth of consumer credit market: Insiders
BUSINESSicon  01/04/2021 

Though Vietnam’s outstanding consumer credit almost tripled over the last decade, its share of total outstanding loans is yet to keep pace with that of its regional nations. 

Owner of US$7 billion system, billionaire Nguyen Dang Quang takes new step
Owner of US$7 billion system, billionaire Nguyen Dang Quang takes new step
BUSINESSicon  01/04/2021 

After Masan Group's acquisition of Vingroup’s retail chain, Masan’s Nguyen Dang Quang took great steps to master the $7 billion system and form an ecosystem for Vietnamese people.

Banks required to issue chip cards for security
Banks required to issue chip cards for security
BUSINESSicon  01/04/2021 

Vietnamese commercial banks are required to issue chip ATM cards to improve customers’ transaction security from March 31, according to the State Bank of Vietnam’s Circular No. 22/2020/TT-NHNN.

Industries bet on vaccine visa measures
Industries bet on vaccine visa measures
BUSINESSicon  01/04/2021 

In line with the global vaccine visa drive, Vietnam’s latest move to complete technical infrastructure for the availability of such a travel document in April is expected to revive industries, heralding strong economic recovery ahead.

Big businesses pour billions of dong into land purchases in Da Nang
Big businesses pour billions of dong into land purchases in Da Nang
FEATUREicon  01/04/2021 

While other land markets are hot, Da Nang remains very quiet, prompting many investors from Hanoi and HCM City to collect land plots in advantageous positions in "bottom fishing" deals.

More than 10 sugar mills shut down because of big losses
More than 10 sugar mills shut down because of big losses
FEATUREicon  01/04/2021 

Many sugar mills have had to shut down because they cannot compete with imports.

Vietnam Airlines unveils coveted US flight proposals
Vietnam Airlines unveils coveted US flight proposals
BUSINESSicon  31/03/2021 

Vietnam Airlines’ dream of a direct commercial flight to the US is being quickened as a way to shelter from the financial trouble amid the pandemic, with repatriation flights being the pre-runner for future non-stop journeys across the Pacific Ocean.

Rapid growth of online delivery services
Rapid growth of online delivery services
BUSINESSicon  01/04/2021 

The sudden, unexpected and virulent spread of the Covid-19 pandemic brought about a change in perception and planning in consumer sales behavior, and many well established businesses made a strong shift towards online delivery servicing. 

New strategy to place priority on green growth
New strategy to place priority on green growth
BUSINESSicon  31/03/2021 

The Ministry of Planning and Investment is drafting a national green growth strategy and plans to submit it to the Government by June to accelerate the transition towards a carbon-neutral economy in Vietnam.

Many Vietnamese exporters see profit soar during COVID-19
Many Vietnamese exporters see profit soar during COVID-19
BUSINESSicon  31/03/2021 

Many Vietnamese exporters have seen a sudden increase in profits during the COVID-19 pandemic.

VIETNAM BUSINESS NEWS APRIL 1
VIETNAM BUSINESS NEWS APRIL 1
BUSINESSicon  01/04/2021 

Gov't needs to provide more support for SMEs in taking advantage of the EVFTA

Aviation industry: Sasco reports profit, Nasco reports loss
Aviation industry: Sasco reports profit, Nasco reports loss
BUSINESSicon  31/03/2021 

Aviation service companies continue experiencing hardships due to the Covid-19 pandemic, but the business of Johnathan Hanh Nguyen still is making a profit.

Wind, solar power projects complain about VAT refunds
Wind, solar power projects complain about VAT refunds
FEATUREicon  31/03/2021 

Wind power developers, who are running against time to put their projects into operation prior to November 2021, now face another problem: they may not get a VAT (value added tax) refund because of certain regulations.

Businesses still making under-the-table payments
Businesses still making under-the-table payments
BUSINESSicon  01/04/2021 

Under-the-table payments, often required in administrative procedure categories and enforcement stages, has been compared to a "leech" that persistently causes pain to businesses and the public.

Attracting multi-billion dollars worth of investments to IZs, tycoon earns big money
Attracting multi-billion dollars worth of investments to IZs, tycoon earns big money
BUSINESSicon  31/03/2021 

The real estate firm of Dang Thanh Tam has attracted $1.2 billion worth of investments into its IZs within a short time, projecting a profit increase of 6-7 times in 2021 amid continued foreign capital inflow.

Vietnam to develop wind, solar power, but safety concerns exist
Vietnam to develop wind, solar power, but safety concerns exist
FEATUREicon  31/03/2021 

Wind and solar power continues to be prioritized but solutions are needed to ensure the safety of the electricity system when operating volatile sources of energy.

Home loan interest rates fluctuate
Home loan interest rates fluctuate
BUSINESSicon  31/03/2021 

Many commercial banks have adjusted their preferential home loan interest rates, ranging from 5.99 percent to 9.5 percent per annum.

Beauty queens gather in Hanoi
Beauty queens gather in Hanoi
BUSINESSicon  30/03/2021 

The two runner-ups, Tu Anh and Huyen My, joined Miss Vietnam World Ngo Phuong Lan, actors Huynh Anh, Doan Quoc Dam and actress Diem Hang at a recent event in Hanoi.

VIETNAM BUSINESS NEWS MARCH 30
VIETNAM BUSINESS NEWS MARCH 30
BUSINESSicon  30/03/2021 

Vietnam-UK trade deal to officially take effect from May

 
 
 
Leave your comment on an article

OR QUICK LOGIN