Tax authorities set eyes on “Flappy Bird” creator’s bank account

Tax authorities said Nguyen Ha Dong did not sell his mobile game Flappy Bird directly to consumers on digital platforms such as Apple’s App Store and Google Play, however, the young app developer was still getting his share from in-app advertising revenue, so value added tax and personal income tax must be paid.

Nguyen Ha Dong has already paid an income tax bill of VND1.4 billion (about $60,000), tax records show.

Vietnamese tax authorities are finding it difficult to deal with taxes on digital products and other online business activities since they are unable to verify how much people like Nguyen actually earn from advertising.

Despite that, tax officials are determined to impose taxes on dot-com millionaires like the Flappy Bird creator.

“As a Vietnamese citizen permanently living in the country, you have an obligation to declare your taxable income to local tax authorities. No matter where such income was earned either in Vietnam or overseas,” said Nguyen Van Phung, head of the agency of Tax Management on Large Enterprises under the General Department of Taxation.

He urged individual taxpayers to make voluntary disclosures and hoped to get full cooperation from banks in the effort to fight against tax avoidance and evasion.

Phung also added that taxpayers should report their overseas taxable incomes to avoid the risk of paying taxes twice on the same declared money. Vietnamese tax authorities will take into account the tax paid to a foreign country when they calculate taxes paid in Vietnam.

Mr. Flappy Bird chats with Google CEO Sundar Pichai on Hanoi sidewalk

Flappy Bird was released on the iOS App Store in May 2013 with a quiet start to life and little attention. Nguyen Ha Dong didn’t bother promoting it. Instead of charging for Flappy Bird, he made it available for free, and hoped to get some money from in-game advertising. Downloads of the game went through the roof in early 2014 with more than 50 million players before it was removed from app stores in February. Its creator was said to have earned an estimated $50,000 a day.

Nguyen Ha Dong was featured in the Forbes 2014 “30 under 30” list of Vietnamese individuals who stood out in various industries.

As the Southeast Asian country is pursuing an ambitious plan of transforming itself from a top producer of electronic components to a big player in the global digital economy, Vietnam is expected to see more successful tech startups in the future. The tax system will have to develop to keep up with rapid changes in an age of internationally competitive technology.