No plans for office, servers in Vietnam at this time: Netflix

The U.S. streaming giant said in a statement Friday that it is for governments to decide the rules on tax, and Netflix complies with applicable laws, but these do not require the company to open a local office, nor to place servers locally.

It is "supportive of the implementation of a mechanism that will make it possible for foreign service providers like Netflix to collect and remit taxes in Vietnam," it said.

A mechanism for this does not currently exist but should be set up in the near future, and it is discussing best practices with the authorities to make it practical for all, it added.

In other markets where it does not have a local office, it is still able to contribute to growth, remit taxes and protect consumers through simple offshore registration, it claimed.

This contradicts what a Vietnamese tax official recently said. Vu Manh Cuong, director of the General Department of Taxation’s inspection agency, said on Tuesday that Netflix had been working with the Ministry of Finance and the tax department to set up a representative office and servers in Vietnam to declare tax.

The department is working to assess Netflix’s revenues in Vietnam since its entry in 2016 for tax collection, he added.

The Cybersecurity Law requires all foreign businesses which earn an income from online activities in Vietnam to store their data in the country and file tax returns.

Authorities had earlier said that Netflix, which has around 300,000 subscribers in Vietnam and collects a monthly subscription of VND180,000-260,000 ($7.75-11.19), has never paid tax in the country.

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.