Connect with us

Business

Taxation body missing out on taxes from sharing-economy businesses

Published

on

Businesses following the sharing economy model are facing problems in tax declaration. Because of the lack of regulations, the taxation body may be taxing inaccurately or missing taxpayers.

Difficult to collect tax

The Ministry of Finance (MOF) has released a report on taxes and tax management in the sharing economy.

Taxation body missing out on taxes from sharing-economy businesses

The ministry says the current tax laws don’t differentiate between businesses following the traditional way and the businesses following a sharing economy model. The tax imposition and collection on sharing economy businesses are implemented in accordance with VAT, Corporate Income Tax and Tax Management Laws.

“For registered businesses, no matter whether it is a sharing economy or traditional business model, the taxation body can collect full taxes according to the type of business,” the ministry said.

However, the ministry admitted that the businesses which have headquarters overseas, but do business in Vietnam and have revenue in Vietnam, only pay corporate income tax under direct mode because Vietnam cannot manage the input cost overseas as they don’t have permanent offices in Vietnam.

This causes inequality between domestic and foreign businesses.

“The gaps in tax obligations of these types of companies in the sharing economy in Vietnam need to be fixed,” MOF said, adding that it is necessary to set up policies to manage cross-border electronic payment to supervise the fulfillment of tax obligations of foreign partners doing business in Vietnam.

For example, the Vietnamese law now has a regulation on room sharing service. Online accommodation booking services and booking apps all have to comply with the tax laws.

However, in order to ensure the enforcement of the units that provide accommodation service under the sharing economy model, it is necessary to mobilize resources from relevant parties.

Also according to MOF, the businesses under the sharing economy model are facibg difficulties in tax declaration. This is because the laws still don’t recognize this type of business, and the taxation body is unsure about defining the nature of transactions as it relates to tax.

Businesses following the sharing economy model are facing problems in tax declaration. Because of the lack of regulations, the taxation body may be taxing inaccurately or missing taxpayers.

Log Lag, a cargo transformation startup following the sharing economy model, is meeting problems in tax declaration. Log Lag has had to fulfill tax obligations as a transport firm.

Its revenue is entered in accounts in accordance with the total transaction value of the shipments, which is much higher than the value the company actually collects as a connector.

If there is a trial taxation mechanism for the company to apply, it hopes it can minimize the risk in cash flow.

Meanwhile, the Luxstay Vietnam Company operates under the model of sharing apartments. After a period of operation and successful call for capital, the company is thinking of expanding and providing other sharing services.

In order to do this, MOF thinks the company needs an open trial mechanism.

Cash payment should be restricted to online transactions

MOF has admitted the risk of failing to collect tax from sharing economy businesses. It is difficult for taxation bodies to define their taxable revenue as their transactions are mostly electronic documents. Therefore, the taxation heavily relies on the businesses’ honesty.

As for intermediary service providers that are foreign contractors, it is also difficult for the taxation body to check, monitor and collect taxes from them, because they have not set up offices or branches in Vietnam.

It is not feasible to require service providers in Vietnam to declare tax and pay tax for foreign contractors, because Vietnam has signed 76 double taxation avoidance agreements.

Regarding P2P lending, MOF warned of risks in tax collection and forex management, because the people carrying out transactions are non-residents. If people intentionally deceive or impersonate others, Vietnam will fail to collect income tax arrears.

Besides, the popularity of cash payments in Vietnam also affects the defining of value of online transactions. State management agencies find it difficult to control cash transactions.

The tax management on overseas e-commerce platforms is ‘extremely difficult’ as admitted by MOF. International practice shows that there should be international cooperation among countries. It is necessary to join tax management forums or create regional tax management forums so as to obtain agreements on information providing and sharing.

OECD’s tax management forum is building a draft code of conduct for sharing economy, which clearly states the content and coordination solutions among countries for effective tax management.

Meanwhile, MOF plans to propose to the government new regulations to restrict cash payments for online transactions. Service providers would only accept payments via banks or intermediaries with bank transfer. 

Luong Bang

Source: https://vietnamnet.vn/en/feature/taxation-body-missing-out-on-taxes-from-sharing-economy-businesses-682608.html

Business

TTC Sugar to issue $30 million of unsecured bonds

Published

on

TTC Sugar will sell VNĐ700 billion (US$ 3 million) of unsecured bonds to the public next quarter. — Photo courtesy of the firm

HÀ NÔI — TTC Sugar has announced it will offer VNĐ700 billion (US$30 million) worth of unsecured bonds up for public auction.

The firm said the interest rate of the bonds in the first year would be 10 per cent in the first four quarters then a floating interest rate after that.

The firm expects to release the bonds in the first quarter next year with the minimum order for individual investors VNĐ20 billion and institutional investors VNĐ250 billion.

It said the non-convertible bonds were not guaranteed by assets in the maximum term of three years and were issued to pay for sugar purchase contracts in the first quarter of 2021

Sugar purchase contracts included those with Thành Thành Công Gia Lai company worth VNĐ288.4 billion, Biên Hòa – Ninh Hòa Sugar Company worth VNĐ205.8 billion and Biên Hòa Đồng Nai TTC Sugar Company worth VNĐ205.8 billion.

As of September 30, TTC Sugar had total capital of more than VNĐ18.4 trillion, total financial debt of VNĐ8.6 trillion, in which bond loans reached nearly VNĐ1.3 trillion. In addition, the firm has nearly VNĐ153 billion of convertible bonds.

The shares of TTC Sugar with the sticker SBT gained 2.5 per cent to reach VNDD18,500 on the HCM City Stock Exchange (HoSE) yesterday —

Source: https://vietnamnews.vn/economy/816937/ttc-sugar-to-issue-30-million-of-unsecured-bonds.html

Continue Reading

Business

VN-Index back in the green after single red session

Published

on

VN-Index back in the green after single red session

An investor looks at stock prices on a screen at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran.


The VN-Index shrugged off a single-session loss, gaining 0.58 percent to close at 1,008.87 points Tuesday, with gains driven by large cap stocks

The Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, saw a fairly balanced session with 221 stocks gaining and 199 losing. Out of these, 15 stocks hit their ceiling prices, the highest they could go in a trading session.

Total trading volume rose marginally over the previous session, to VND11.68 trillion ($504.2 million), of which half went towards the VN30, a basket of the market’s largest capped stocks.

The VN30-Index for this basket surged 1.08 percent, significantly outperforming the general market, with 18 gaining tickers and seven losing.

Topping gains were stocks in the private banking sector. STB of Sacombank soared 5.5 percent, VPB of VPBank 4.1 percent, TCB of Techcombank 1.7 perent, HDB of HDBank 1.4 percent, while EIB of Eximbank shed 0.3 percent.

Results in the public banking sector, however, were mixed. MBB of mid-sized Military Bank rose 2.5 percent, while of Vietnam’s three biggest lenders by assets, CTG of VietinBank was up 1.2 percent, BID of BIDV kept its opening price, while VCB of Vietcombank was the worst performer on the VN30, down 1.1 percent.

Other major gainers this session included TCH of truck dealer Hoang Huy Group, up 5.4 percent, SBT of agricultural exporter TTC-Sugar, up 2.5 percent, VNM of dairy giant Vinamilk, with 1.4 percent, and MSN of food conglomerate Masan Group, with 1.2 percent.

VIC of private conglomerate Vingroup, HoSE’s biggest cap, rose 1.1 percent, while VHM of its real estate arm Vinhomes was up 0.8 percent, and VRE of retail arm Vincom Retail added 0.2 percent.

In oil and gas, GAS of energy giant PetroVietnam Gas and POW of electricity generator PetroVietnam Power both kept their opening prices, while PLX of gasoline distributor Petrolimex shed 0.4 percent.

In the other direction, the biggest losers included ROS of construction firm FLC Faros, down 0.9 percent, KDH of real estate developer Khang Dien House, down 0.7 percent, and FPT of IT services firm FPT, with 0.4 percent.

The HNX-Index for the Hanoi Stock Exchange, home to mid- and small-caps, climbed 0.83 percent, but the UPCoM-Index for the Unlisted Companies Market jumped 1.36 percent.

Foreign investors continued to be net buyers to the tune of nearly VND420 billion on all three bourses, with buying pressure mostly on VNM of Vinamilk, and the FUEVFVND, an exchange-traded fund replicating the performance of stocks on the VN Diamond Index, a bag of 14 stocks, most of which are blue chips.

Source: https://e.vnexpress.net/news/business/economy/vn-index-back-in-the-green-after-single-red-session-4199351.html

Continue Reading

Business

Golden Brand Awards launched in HCMC

Published

on

The launch ceremony of the HCMC Golden Brand Awards held at the headquarters of The Saigon Times Group on December 1 – PHOTO: THANH HOA

HCMC – The HCMC Department of Industry and Trade and The Saigon Times Group jointly launched the HCMC Golden Brand Awards this morning, December 1, aimed at honoring businesses in the city for their efforts in building their brands.

Addressing the launch ceremony, Bui Ta Hoang Vu, director of the HCMC Department of Industry and Trade, said HCMC is the country’s economic hub where many businesses have been established and running.

The HCMC Golden Brand Awards is expected to help raise the awareness of businesses operating in the city over the importance of building their brands and encourage them to accelerate innovation, creativity and development, thus helping them improve their competitive capacity in local and international markets.

The organizers will give priority to businesses active in four key industries and nine major services of the city. Selection will be based on their efficiency in building their brands, innovation, creativity, the quality and safety of their products and their corporate social responsibility.

“The success of an enterprise relies not only on the popularity of its brand but also on its efficient business model. The assessment over the health of a brand is no longer based mainly on communication or marketing strategies but on the brand platform, which is the foundation that helps businesses develop sustainably and maintain their competitiveness in the long term,” said Tran Minh Hung, editor-in-chief of The Saigon Times Group.

According to Nguyen Dong Phuong, deputy director of the HCMC Department of Industry and Trade, businesses eligible for the awards are those that comply with all the prevailing regulations on production and trade. They must be based in HCMC and must not commit copyright infringement or trade fraud. Their brand should have been developed for at least two years.

The jury will comprise experts in building brands. The award winners will be announced in January 2021.

Registrations can be submitted to The Saigon Times Group, 35 Nam Ky Khoi Nghia Street, Nguyen Thai Binh Ward, District 1, HCMC, or the HCMC Department of Industry and Trade, 136 Hai Ba Trung Street, Ward 6, District 3, HCMC.

The registration form can be downloaded from http://thuonghieuvang.thesaigontimes.vn.

Source: https://english.thesaigontimes.vn/79616/golden-brand-awards-launched-in-hcmc.html

Continue Reading

Trending