Social networks drive enterprises and state agencies crazy

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Not only international social networks, but many global service providers have been playing by their own rules, so Vietnamese customers have to follow when using social networks and services.

Google Play Store in Vietnam provides mobile phones with charging services and applications. However, there are only two ways of payment, including international credit or debit cards, under the management of Google Payment Corporation in the US.

Similarly, AdWords, an online advertising service developed by Google where advertisers pay to display brief advertisement videos to web users, accepts payments through MasterCard, Visa or Visa Electron.

On September 6, 2017, Heineken Vietnam Brewery Company Limited sent a special letter to the Ministry of Information and Communications, denouncing Youtube and Facebook for uploading a video that “causes misunderstandings and negatively affects Heineken’s operations and business.” (Photo: Shutterstock)

Youtube pays its partners through its own networks and partners can receive their payments only after these networks take their commissions, which are included in the payments to Youtube’s partners. The amount of commission was negotiated by Youtube and its networks.

Regarding Netflix, which entered the Vietnamese market in 2016, the system collects service fees through international payment cards. Up till now, Netflix has not established a legal entity in Vietnam.

The “rules” of these foreign service providers, on one side, are inconvenient to Vietnamese consumers because international payment cards often charge higher service fees than domestic ones.

On the other side, this seems to be unfair to domestic service providers, who have to pay a lot of extra expenses for infrastructure, technology, human resources, and taxes, while international service providers are not subject to many of these charges to maintain their operations in Vietnam.

In addition, some foreign enterprises are not legally incorporated in Vietnam, but they have agencies in the country to help them provide services to Vietnamese customers. Tax departments in Vietnam can only collect tax from the agencies, not the foreign enterprises themselves.

These foreign enterprises refer to the bilateral agreements between Vietnam and their countries which specify that only enterprises with permanent establishments in Vietnam have to pay tax in order to avoid double taxation.

Enterprises in Vietnam highly disagree and hope that related state agencies will soon find solutions to collect tax from these foreign enterprises with the aim of creating a level-playing field in Vietnam.

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