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Google, Facebook will have to perform tax duty in Vietnam under new rules

07:19 | 26/08/2020

Google and Facebook will have to perform their tax duty and take responsibility for content verification of cross-border advertising services in Vietnam.

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google facebook will have to perform tax duty in vietnam under new rules
Facebook and Google have been skirting their tax obligations in Vietnam for long years. Photo: VIR

Google and Facebook will have to perform their tax duty and take responsibility for content verification of cross-border advertising services in Vietnam.

The Ministry of Information and Communications (MIC) is working on a draft decree revising and supplementing some regulations in Decree No.181/2013/ND-CP governing the implementation of the Law on Advertising, according to Vietnam Investment Review.

The ministry said online advertising activities make up a big part in the country’s total investment in advertisements. The two major platforms that organisations, businesses, and individuals choose to run online advertising activities the most are those of Google and Facebook which are offering cross-border advertisement services, making up 70 percent of the revenue of the online advertising market.

google facebook will have to perform tax duty in vietnam under new rules
Internet users browse the Internet near an advertising billboard for 4G connection service at a bus-stop in Hanoi. Photo: Reuters

The Law on Advertising and Decree 181 have regulations on cross-border advertising activities in Vietnam. However, the regulations yet to have detailed guidance on the responsibility of service suppliers, especially those related to the verification of content of advertising products before publication, as well as the tax duty for cross-border advertising services in Vietnam.

The amended decree aims to increase the efficiency of state management and the supervision of the supply of cross-border advertisement services.

One of the new highlights of the amendment is to outline the responsibilities of international organisations, businesses, and individuals supplying cross-border advertising services in Vietnam and changing the authorised state management agency on cross-border advertising activities to ensure consistency.

The Ministry of Information and Communications (MIC) is gathering comments and ideas from the public for the draft decree.

Control over Facebook, Google ads tightened

google facebook will have to perform tax duty in vietnam under new rules
Facebook is one of the primary source of communication for civil society groups, and contacts between people in Vietnam and Vietnamese communities overseas. Photo: © EPA

Both Facebook and Google do not have a representative office in Vietnam. The country’s cybersecurity law, which took effect at the beginning of 2019, requires foreign businesses to open representative offices in Vietnam and store their Vietnamese users' data in Vietnamese territory.

The Vietnamese ministry has previously proposed that new policies are issued to facilitate the creation and growth of homegrown social networks, aiming to garner at least 60 million accounts and 60-70 percent of the social network market’s pie in Vietnam by 2022, VnExpress reported.

But for now, Facebook remains the most popular social network in the country. The number of Facebook users in Vietnam is the seventh highest in the world with over 58 million people last year, an increase of 16 percent from 2017, according to marketing agency We Are Social.

Under the new rules, Facebook and Google will be required to block and remove illegal contents when asked by the ministry and other competent authorities.

Advertisers will be responsible for the contents and have the right to demand their advertisements are not attached to contents that violate the law.

The ministry also plans to remove a number of provisions it deems inappropriate such as a requirement that advertisers seeking to use international advertising services must go through domestic agencies./.

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