Foreign streaming firms earn $43 mln in Vietnam, pay no tax
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Foreign streaming companies like Netflix and Apple TV have earned combined revenues of nearly VND1 trillion ($43 million) so far but have not paid any tax on them.
Minister of Information and Communications Nguyen Manh Hung said the figure was arrived at from the fact they have one million subscribers.
“Vietnamese companies have to abide by tax and content regulations while foreign firms do not pay tax and do not follow the laws, which is unfair competition,” he said at a National Assembly Q&A session Tuesday.
There are 35 local TV and Internet streaming companies with 14 million subscribers.
Some foreign companies have flouted regulations related to the history and sovereignty of the country, violence, drug use, and sex, Hung said.
U.S.-owned Netflix said in a statement last month it was working with Vietnamese authorities to set up a mechanism for tax collection.
The Cybersecurity Law requires all foreign businesses which earn an income from online activities in Vietnam to store their data in the country, but Netflix is unwilling to place its servers locally or open an office in Vietnam.
Other Southeast Asian countries have also been making moves to tax Netflix and other Internet giants. Indonesia imposed a 10 percent value-added tax on sales on technology firms including Amazon, Netflix, Spotify, and Google in July, while Singapore has since January required subscribers to Netflix and other overseas digital services to pay a 7 percent goods and services tax.
Questions & Answers
Q.How do foreign streaming companies currently avoid paying tax in Vietnam?
How do foreign streaming companies currently avoid paying tax in Vietnam?
The article implies foreign firms like Netflix and Apple TV avoid tax because they do not have a physical presence, such as an office or local servers, in Vietnam. This makes it difficult for the Vietnamese government to enforce tax collection.
Q.What issues beyond tax collection have been raised regarding foreign streaming companies in Vietnam?
What issues beyond tax collection have been raised regarding foreign streaming companies in Vietnam?
Minister Nguyen Manh Hung stated that some foreign companies have ignored regulations concerning the country's history and sovereignty. They have also flouted rules regarding content depicting violence, drug use, and sex.
Q.What is Netflix's stance on complying with Vietnamese regulations, particularly regarding data storage?
What is Netflix's stance on complying with Vietnamese regulations, particularly regarding data storage?
Netflix stated last month it is collaborating with Vietnamese authorities on a tax collection mechanism. However, it is currently unwilling to place its servers locally or establish an office in Vietnam, as required by the Cybersecurity Law.
Q.Are other Southeast Asian nations also attempting to tax foreign streaming and digital services?
Are other Southeast Asian nations also attempting to tax foreign streaming and digital services?
Yes, other Southeast Asian countries have taken action. Indonesia implemented a 10 percent VAT on technology firms, including Netflix, in July. Singapore has also required a 7 percent goods and services tax from subscribers to overseas digital services since January.
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