Netflix, Apple rebuked by Vietnam over lack of tax payments

Vietnam introduced a cyber security law two years ago that requires all foreign businesses earning income from online activities in Vietnam to store their data in the country.

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Vietnam’s information minister on Tuesday accused foreign streaming companies like Netflix and Apple of skirting their tax responsibilities, saying it would create unfair competition for domestic firms.

Foreign streaming firms, which have combined revenues of nearly one trillion dong ($43.15 million) from one million subscribers, according to the information and communications ministry, have never paid tax in Vietnam.

“Domestic companies have to abide by tax and content regulations while foreign firms do not, which is unfair competition,” the minister, Nguyen Manh Hung, told a government meeting.

“Some content on Netflix has flouted regulations related to the history and sovereignty of the country, violence, drug use, and sex,” he added.

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Vietnam introduced a cyber security law two years ago that requires all foreign businesses earning income from online activities in Vietnam to store their data in the country.

Netflix said it had no plans to place its servers locally or open an office in Vietnam at the moment.

In a statement to Reuters, the firm said it would continue to engage with the government on potential regulations on video on demand services accessible in Vietnam.

“We are supportive of the implementation of a mechanism that will make it possible for foreign service providers like Netflix to collect and remit taxes in Vietnam,” a Netflix spokesperson said in the statement.

“However today such a mechanism does not exist.”

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Netflix was told to remove “Full Metal Jacket”, a Vietnam War film from its service in the country.

Hung said the information ministry, finance ministry and tax department were working to facilitate tax collection by calculating foreign streaming firms’ revenues in Vietnam since their entry into the market.

Tech giants are increasingly facing tougher fiscal regimes in Southeast Asia, where regulators held talks last year on a regional push to tax them more.

The Philippines, Thailand and Indonesia have recently passed or drafted legislation aiming to ensure taxes are paid. ($1 = 23,173 dong)

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