Vietnam has taken a decisive step to increase its tax revenue from global technology giants by ordering banks to withhold taxes for transactions involving Agoda, Airbnb, Booking.com, and PayPal. This directive, issued by the General Tax Department, extends to 100 lenders alongside these four prominent online platforms. The order represents Vietnam's ongoing efforts to tax tech businesses that do not have physical offices within the country.
The Southeast Asian nation has long grappled with the challenge of taxing tech businesses, with many global platforms operating without a local presence. This new measure aims to close that gap, ensuring that taxes are levied on transactions made through these popular overseas-based websites. Consequently, Vietnamese users might experience tax deductions when using these platforms for their online transactions.
The General Tax Department communicated this directive through a letter, which was seen by Nikkei Asia. The move is part of Vietnam's broader strategy to bolster its tax revenue from the rapidly growing tech sector. As a fast-growing economy in Southeast Asia, Vietnam is keen on ensuring that international tech companies contribute their fair share to the country's fiscal resources.
This recent order signifies a fresh approach in Vietnam's ongoing attempts to effectively tax tech businesses. The involvement of 100 lenders underscores the scale and significance of this initiative. By targeting key players like Agoda, Airbnb, Booking.com, and PayPal, Vietnam is sending a clear message about its intent to enforce tax compliance among global technology firms operating within its borders.
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