According to the draft decree amending and supplementing a number of articles of Decree No. 126/2020/ND-CP and Decree No. 123/2020/ND-CP recently sent by the Ministry of Finance to relevant ministries, branches and associations to consult the content of information that e-commerce platform owners must provide, the form and frequency of providing information to the tax authorities.

In addition, the draft also amends the provision to temporarily pay 75% of corporate income tax for the whole year according to tax finalization.

Specifying the content, form and frequency of providing information

According to the draft decree, the owner of an e-commerce trading platform (e-commerce) is responsible for declaring and paying taxes and providing information to tax authorities.

Regarding tax declaration and payment responsibilities, in the report to the Government, the Ministry of Finance said that in Decree No. 85/2021/ND-CP dated September 25, 2021 amending and supplementing a number of articles of Decree No. 52/2013/ND-CP dated 16/5/2013 on e-commerce has introduced the operation forms of e-commerce trading platform.

Specifically, there are 4 forms of operation of the e-commerce platform: a website that allows participants to open booths to display and introduce goods or services; the website allows participants to open accounts to perform the process of entering into contracts with customers; the website has a buying and selling section, which allows participants to post information about buying and selling goods and services; Social networks have one of the above forms of activities and participants directly, or indirectly, pay a fee for the performance of such activities.

On the websites of each form of e-commerce trading platform mentioned above, there may or may not be "online ordering function".

Decree No. 85/2021/ND-CP also added regulations to strengthen the responsibility of the owner of the e-commerce trading platform, including that the owner of the e-commerce trading platform is responsible for notifying tax obligations according to the provisions of Vietnamese law of foreign sellers when participating in e-commerce trading platform.

The Ministry of Finance also said that the replacement of tax declaration and payment of tax on behalf of the owner has been fully regulated in Clause 5, Article 7 of Decree No. 126/2020/ND-CP, however, there is no regulation on the responsibility of the owner of E-commerce trading platform as prescribed in Decree No. 85/2021/ND-CP. Therefore, it is necessary to supplement the decree on tax administration to be consistent with and consistent with Decree No. 85/2021/ND-CP on e-commerce.

Regarding the responsibility to provide information, the Ministry of Finance said, although in Clause 2, Article 27 of Decree No. 126/2020/ND-CP, it stipulates the responsibility of providing information of relevant organizations and individuals. However, for organizations and individuals providing e-commerce services as owners of e-commerce trading platform, there are still no clear regulations on the content of information to be provided, the form and frequency of information provision.

The Ministry of Finance believes that the information provided by the owner of the e-commerce trading platform is important and necessary for tax management for organizations and individuals selling goods and services through the E-commerce trading platform. Therefore, in order to request the owner of an e-commerce trading platform to provide information to the management agency, it is necessary to supplement the Government's decree regulating the content of information to be provided, the form and the frequency of providing information for uniform implementation by the legal department.

Amendment of regulations on temporary payment of 75% corporate income tax

Regarding the provision of temporary payment of 75% of corporate income tax (CIT), at Point b, Clause 6, Article 8 of Decree No. 126/2020/ND-CP currently stipulating that enterprises must temporarily pay CIT of 3 the first quarter of the tax year is not lower than 75% of the payable CIT amount for the whole year according to the annual CIT finalization. If the total temporarily paid amount of the first three quarters of the year is less than 75% of the tax payable for the whole year, the enterprise will be charged a late payment interest based on the tax amount lower than 75%.

To implement the above provisions, by the time limit for temporary payment of CIT in the third quarter, enterprises need to estimate the payable CIT amount of the whole year as a basis for determining the temporarily paid tax amount of the first 3 quarters of the year on October 30 every year for enterprises whose fiscal year coincides with the calendar year.

Through application, it has been shown that requiring businesses to estimate the tax payable for the whole year, while there are still 2 months to end the year is not reasonable in terms of time, so it has not really created favorable conditions for taxpayers.

Therefore, the Ministry of Finance proposes to amend the provision on temporary payment of quarterly CIT at Point b, Clause 6, Article 8 of Decree No. 126/2020/ND-CP; at the same time, make corresponding adjustments to the provisions at points c and g, clause 6, Article 8 of Decree No. 126/2020/ND-CP on temporary payment of remaining after-tax profits after appropriating enterprise funds set up by the State holding 100% of charter capital and temporarily pays quarterly CIT of foreign carriers.

In addition, at Point c, Clause 6, Article 8 of Decree No. 126/2020/ND-CP stipulating that in case a joint-stock company, a limited liability company with two or more members with contributed capital of the parent company violates the time limit for division dividends and profits, the parent company shall report to the Ministry of Finance and the parent company's governing body for handling in accordance with law.

Regarding the time limit for dividend and profit distribution as prescribed in the Law on Enterprises: For joint-stock companies, dividends must be paid in full within 6 months from the end of the annual general meeting of shareholders. For a limited liability company with two or more members, profits may only be distributed to members after they have fulfilled their tax and other financial obligations as prescribed by law, and are guaranteed to pay all debts. and other property obligations due to be paid after distribution of profits. Therefore, the draft decree also stipulates that enterprises have the responsibility to comply with the provisions of the Law on Enterprises.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.