Vietnam moves to delay e-commerce tax amid COVID chaos

Photo by Tran Phu on Unsplash

Vietnam has moved to delay an online tax that is facing resistance from e-commerce companies just days before it was supposed to take effect as the country grapples with a worsening COVID-19 outbreak.

“The Finance Ministry is submitting to the government the postponement of the implementation of Circular 40 on taxes to create more convenience for taxpayers,” the ministry said on its website on Sunday night. The circular would require businesses like Shopee, the e-commerce unit of Singapore’s Sea, and Lazada, owned by Alibaba Group Holding, to withhold taxes for merchants on their platforms each time a sale is made.

The regulation was to take effect Aug. 1 but that could be pushed back to Jan. 1, according to a post on a government news site. The post was a recap of Finance Minister Ho Duc Phuc’s remarks to the National Assembly this weekend, where he laid out proposals to help citizens during Vietnam’s deadliest COVID outbreak, including tax breaks and cash aid.

As more transactions move online, Vietnam has sought to ensure e-commerce companies shoulder the same tax responsibilities as their offline counterparts. While e-commerce sites withhold taxes elsewhere, such as the state-by-state levies that Amazon collects in the U.S., businesses operating in Vietnam say they did not have time to prepare for Circular 40, which was published on June 1.

Tiki, the largest Vietnamese e-commerce marketplace, said it is waiting for authorities to detail “steps to be taken, the implementation time at each stage, and specific documents on calculation methods, tax declaration forms, and accounting.”

“E-commerce platforms also need more time to work with, guide and reach an agreement with brand partners and sellers,” the company said in a statement before the Finance Ministry’s announcement.

This article was first published in Nikkei Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.