On the morning of May 3, the Hanoi Tax Department in collaboration with the People’s Committee of Hoan Kiem District organized a conference to deploy the management of taxes on e-commerce business activities in the pilot area of Hoan Kiem District to disseminate and provide instructions to business households and individuals involved in e-commerce activities to declare and pay taxes in accordance with legal regulations.
Regarding the reason for choosing Hoan Kiem District as a pilot for tax management of e-commerce, Director of the Hanoi Tax Department, Vu Manh Cuong, said: Hoan Kiem District is the political – administrative, economic, and cultural center of Hanoi, with the special characteristics of the ancient quarters, a large number of households, and bustling business individuals with abundant goods and services. Currently, e-commerce is also a popular business method being used by households and individuals in this area.
Hoan Kiem District is also one of the leading units in administrative reform, digital transformation, particularly the implementation of Resolution 06 of the Government in Hoan Kiem District, which has been basically completed (reaching 99.88% of data connection with the Ministry of Public Security); this is also the pioneer unit of the City to implement the non-cash payment project, which has been selected by the City People’s Committee as the core for deployment.
The special attention of the People’s Committee of Hoan Kiem District as well as the characteristics of the tax management subjects in the area (concentration of many e-commerce businesses, online sales…) are the main reasons why the Hanoi Tax Department has reported to the City People’s Committee to propose the implementation of a pilot model for e-commerce tax management in the area of Hoan Kiem District, and has received the absolute support of the City’s leaders.
Regarding the e-commerce management situation in the city in the past two years, Chairman of the Hoan Kiem District People’s Committee, Pham Tuan Long said that, in 2022, management agencies in the area have implemented tax management and declaration for 408 entities with revenue of 6 billion 595 million VND; in 2023, they managed tax, declaration for 523 entities with revenue of nearly 22 billion VND. “These figures are evidence of a new trend forming in 2024”, emphasized Mr. Pham Tuan Long.
Mr. Long added that Hoan Kiem District is highly determined to carry out comprehensive digital transformation in all fields, especially the digital economy. With the advantages of a central district, high population quality, dynamic business environment, many large banks located in the area, and especially being the first unit in the city to implement cashless streets, aiming to become a cashless district in 2025, these conditions will promote the development of e-commerce in the district even faster and stronger.
According to Director of the Hanoi Tax Department, Vu Manh Cuong, from the end of 2023 and the beginning of 2024, in accordance with the direction of the Minister of Finance and the General Director of the General Department of Taxation, the Hanoi Tax Department has focused on managing taxes on e-commerce activities, which is a new business type with wide, complex and rapidly growing tax management subjects… in a digital direction. Accordingly, identification and positioning for organizations, individuals, data information on transactions and e-commerce business entities are updated regularly and continuously.
Up to now, the Hanoi Tax Department has built a database of more than 320 businesses that are owners of e-commerce platforms, 54 businesses that are hosted e-commerce platforms, about 21,500 businesses, more than 16,500 business households, and more than 80,600 individuals with salary and wages from sales on Shopee, Tiki, Lazada platforms, collecting about 110,000 bank accounts, identifying more than 591,200 shops…
The Hanoi Tax Department is the first unit to link information between citizen identification cards of individuals trading on e-commerce platforms with tax codes and has built a database of information on bank account numbers, revenue, tax rates, and money flow of organizations and individuals generating income from e-commerce business activities, thereby determining the tax obligations of taxpayers.
Early this year, the Hanoi Tax Department has developed a plan for thematic inspection of e-commerce in 2024 for a total of 2,342 organizations and individuals. Initially, the Hanoi Tax Department has reviewed and issued decisions and notifications according to the inspection procedure for 1,749 organizations and individuals, with processing results: 921 organizations and individuals, increased revenue: 104 billion VND, reduced deduction: 43 billion VND, reduced loss: 59 billion VND.
It is noteworthy that, according to the leader of Tran Hung Dao Ward (Hoan Kiem District, Hanoi), through a survey in the area, a business household selling fashion products on the e-commerce platform was found to have a very large revenue but forgot to pay taxes, and it has only started to declare and pay taxes now. According to the tax agency’s inspection data, in 2022, this business household generated a revenue of 11 billion VND, and in 2023, it was 25 billion VND.
With the aim of effectively and practically implementing the tax management of e-commerce business activities in Hanoi City, the Tax Department will initially implement the pilot in Hoan Kiem District. On the basis of the pilot implementation, the results will be summarized and assessed, and the tax management for e-commerce business activities will be expanded to the Hanoi Tax Department and the District, Town, and City Tax Sub-Departments in the area, and a City-level Project on Tax Management for e-commerce business activities throughout Hanoi City will be developed.
Currently, the Tax sector has classified taxpayers participating in e-commerce activities into two main groups.
One is the group supplying goods and services domestically, including: owners of platforms with e-commerce activities, organizations, and individuals providing goods and services domestically through e-commerce trading platforms, social networks, and other platforms.
The other is the group supplying goods and services across borders (including: foreign suppliers without a permanent establishment in Vietnam that have e-commerce business activities, business based on digital platforms with organizations and individuals in Vietnam; Vietnamese organizations and individuals with income from posting digital products and content on foreign platforms; organizations and individuals providing goods and services across borders through e-commerce trading platforms and other platforms.)
The General Department of Taxation said that in the past two years, it has recorded tax revenue results from organizations and individuals engaged in e-commerce business activities as follows: in 2022, tax management revenue was 3.1 million billion VND (about 130.57 billion USD), with tax revenue paid of 83,000 billion VND; in 2023, management revenue was 3.5 million billion VND (about 146.28 billion USD), with tax revenue paid of 97,000 billion VND.
