Vietnam to tax Netflix’s local revenues

The country's Cybersecurity Law requires all foreign businesses which have income from online activities in Vietnam to store its data in the country and submit their business figures to tax authorities for collection, Vu Manh Cuong, director of the inspection agency under the department of taxation, said at a press briefing Tuesday.

"Netflix has been working with the Ministry of Finance and the General Department of Taxation to set up a representative office and servers in Vietnam to declare tax," he added.

Netflix told VnExpress that it does not have plans to open a representative office in Vietnam, but has met with tax authorities to discuss tax obligations.

Vietnamese authorities had earlier said that U.S.-based Netflix, which has around 300,000 subscribers in Vietnam and demand a monthly subscription of VND180,000-260,000 ($7.75-11.19), has never fulfilled any tax duty in the country.

The country in recent years has been making efforts to collect taxes from internet giants such as Facebook, Google and Netflix.

Its cybersecurity law, which came into effect this year, also requires foreign businesses to provide users’ data to the Ministry of Public Security if it asks in writing to facilitate investigation of any infringement of the new law.

The law bans internet users from organizing, encouraging or training other people for anti-government purposes.

Taxing Vietnamese for their online revenues is another priority of authorities.

Cuong of the taxation department said that in Hanoi alone there are over 18,300 organizations and individuals making a total of VND1.46 trillion from online sales via Google, Facebook and YouTube, according to data from 45 commercial banks,

Tax authorities have so far collected nearly VND14 billion from them, he said.

He added that in the first eight months they also collected over VND93 billion from organizations and individuals making a total revenue of over VND5 trillion from online booking services such as Booking, Agoda and Airbnb.

Other Southeast Asian countries have also been making moves to tax Netflix and other internet giants. Indonesia in July imposed a 10 percent value-added tax on sales by technology firms including Amazon, Netflix, Spotify and Google, while Singapore since January has required subscribers of Netflix and other overseas digital services to pay a 7 percent goods and services tax.