VietNamNet Bridge - Vietnamese digital firms have urged the government to take necessary measures to force cross-border service providers to set up legal entities in Vietnam and fulfill tax obligations.

Nguyen Ngoc Bao, director of VTC Mobile, said that cross-border service providers such as Facebook, YouTube, Google and NetFlix have been providing many types of digital content services to Vietnamese, including online ads, games and films. 

Users can buy services directly from service providers and make payments with international cards such as Visa and Master cards, or via payment apps.

Decree 72/2013/ND-CP regulations are applied to ‘domestic and foreign individuals and organizations’. This means that Facebook, Google, Netflix and other cross-border service providers must obey Decree 72.

A lawyer said the service providers have been benefiting from Vietnamese users but have no financial obligations. He believes that payment methods are legal loopholes for foreign companies to exploit.

Decree 72/2013/ND-CP regulations are applied to ‘domestic and foreign individuals and organizations’. This means that Facebook, Google, Netflix and other cross-border service providers must obey Decree 72. 

There is a specific regulation for game service providers in which businesses eligible for providing online games on the internet must be businesses established in accordance with Vietnamese laws.

Bao said while Vietnamese firms have to observe laws and pay tax, foreign firms don’t have to.

In order to settle the problem, it is necessary to ask foreign players to establish legal entities in Vietnam and integrate Vietnam’s payment channel. The businesses providing services to the Vietnamese market must use the payment channel.

Regarding the payment policy applied to digital content services, Luu Vu Hai, president of VTC Group, said the conglomerate is facing difficulties.

Apple and Google have applied new provisions for payment methods, requesting users to make payment via their payment portals. 

The new rule has caused difficulties for Vietnamese firms which provide services based on Apple’s iOS and Google’s Android, as Vietnamese have the habit of paying with scratch cards.

This leads to a 30 percent increase in cost as Vietnamese digital content firms have to pay Google and Apple, which is twice as much as the fee paid to Vietnam’s Telco with payment via scratch cards.

VTC Intecom’s Nguyen Thanh Hung said the majority of Vietnamese digital content firms provide services on two platforms – iOS and Android. In other words, Vietnamese mobile service providers depend heavily on Apple and Google.

The new regulation is described as ‘having an impact on Vietnam’s digital content industry’.

Hai has asked the Ministry of Information & Communication (MIC) to have reasonable policies to ensure fairness and healthy competition between Vietnamese and international firms.

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