Vietnamese authorities are now facing the same information age problem that has vexed governments worldwide: How to get Google and Facebook to pay their fair share of taxes.
Google alone accounts for 95% of online searches and 70% of websites originating in Vietnam, and most of the estimated $40 million in advertising revenue that appear on them come from foreigners. Google has nine official agents in Vietnam, each of whom is said to be required to net $10,000 per quarter. Facebook and You Tube also are growing their presence in Vietnam’s data cloud.
Vietnamese sources say the companies evade taxes by using international credit card systems, which makes it difficult to trace transactions and collect taxes within Vietnam. Because the Internet companies can use agents to avoid registering to do business in Vietnam, they do not have to declare taxes there.
Yahoo, which is registered, paid $228,180 in taxes in 2011 and $128,351 in 2010.
The upshot is that Vietnam may be tempted to follow China’s example: restricting bandwidth of foreign social websites that do not declare taxes in the country.