Vietnam imposes tax duty on foreign room-booking sites
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Firms such as Agoda and Expedia will have to pay a 10 percent duty. The Ministry of Finance has told foreign accommodation booking services to pay taxes if they wish to continue operating in Vietnam.
A document recently released by the ministry asked booking sites like Agoda, Traveloka and Expedia to pay a combined 10 percent of their total revenue made in Vietnam.
Vietnamese accommodation providers that have signed contracts with these foreign sites are obliged to fulfill these tax duties on behalf of them.
The ministry said that the move aims to prevent tax losses from foreign-based companies that are gaining from online business transactions.
Vietnamese accommodation booking site Vntrip had previously held a press conference and sent a document to the ministry accusing Singapore-based travel agency Agoda and some other sites of tax evasion.
Vntrip said that the acts of these foreign companies had resulted in huge losses to the state revenue and created unwholesome competition.
This is not the first time the Vietnamese government has imposed taxes on international businesses operating in the country. Last September, the popular ride-sharing service Uber was officially ordered to pay taxes after two years of providing transport services in Vietnam.
Questions & Answers
Q.Which specific companies are being targeted by this new tax duty?
Which specific companies are being targeted by this new tax duty?
The Ministry of Finance has specifically named Agoda, Traveloka, and Expedia as foreign accommodation booking services that will be required to pay the new 10 percent tax duty in Vietnam.
Q.What is the primary reason the Vietnamese government is imposing this new tax?
What is the primary reason the Vietnamese government is imposing this new tax?
The ministry stated the primary aim of this new tax is to prevent tax losses from foreign-based companies that generate revenue from online business transactions within Vietnam. It addresses concerns about unwholesome competition.
Q.Who will be responsible for physically paying this tax to the Vietnamese government?
Who will be responsible for physically paying this tax to the Vietnamese government?
Vietnamese accommodation providers that have signed contracts with these foreign booking sites are obliged to fulfil these tax duties on behalf of the foreign companies operating in the country.
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