It is necessary to be clear about tax collection in business on e-commerce platforms

DNHN - VCCI proposes to clarify the content of regulations that require e-commerce platforms to be responsible for representing sellers to declare and pay taxes on their behalf.

The Vietnam Federation of Trade and Industry (VCCI) has just submitted a proposal to the General Department of Taxation and the Ministry of Finance after this agency asked for comments on the draft Decree amending and supplementing several articles of Decree 126. /2020/ND-CP detailing the Law on Tax Administration and Decree 123/2020/ND-CP stipulating invoices and documents. 

Accordingly, VCCI said, based on the opinions of businesses, this agency has the following initial opinions: The draft stipulates that e-commerce floors (e-commerce floors) with online ordering functions have the responsibility to be responsible. responsible for declaring and paying tax on behalf of the seller who is an individual on the floor. VCCI believes that this regulation needs to be considered in several contents. 

Firstly, this regulation requires e-commerce floors to deduct tax from the business income of individual sellers on the floor. However, this does not seem to be consistent with the legal provisions on personal income tax, which stipulates that the responsibility to declare and pay tax on business income belongs to business individuals. 

Specifically, Article 24 of the Law on Personal Income Tax only stipulates that two entities are responsible for declaring, paying and finalizing personal income tax, including income paying organizations and individuals; individuals with taxable income. Article 29 of Decree 65/2013/ND-CP stipulates that taxpayers directly declare and pay tax with income from the business of resident individuals with the tax office. Therefore, VCCI requests the drafting agency to clarify the consistency of this regulation with the current legal system.

Second, the draft regulation requires e-commerce floors to be responsible for representing sellers to declare and pay taxes on their behalf. VCCI requests the drafting agency to clarify the basis of the following content for arising representative responsibility: it is not clear on what basis the agency responsibility arises, is there any order or procedure? The reason is that Article 135 of the 2015 Civil Code stipulates only 2 cases as grounds for establishing the right of representation, including legal representation (including representatives of individuals in some special cases; representatives of legal); authorized representative;

About the scope of representation responsibility: it is not clear what the representative scope in the declaration and payment of taxes on behalf of the e-commerce floor includes, including finalization, tax refund or not? 

Third, VCCI believes that this regulation has the risk of creating many duplicate tax collection methods. In fact, at present, there are many households and individuals doing business both on-site (offline) and online on e-commerce platforms. 

For example restaurants, coffee shops or accommodation businesses... When doing business on e-commerce, business individuals will have to pay tax separately for this part of revenue (deducted by the e-commerce floor). However, at the same time, business individuals had to pay tax according to the presumptive method.

The determination of flat tax (when making tax assessment) will be done through the survey of tax authorities, such as the number of customers in a day of the shop, the number of employees... Separation of revenue from Online business with revenue from offline business will become difficult because the business is done at the same location. Is there an issue of overlap when collecting taxes on this business form? Therefore, VCCI proposes the drafting agency consider and clarify the scope and implementation of the above methods. 

Ba Kien