Legal News

[Taxation] Information from the General Administration of Taxation on the Tax Policy for TikTok's Services

2024/08/08

The General Department of Taxation (GDT) has issued Official Letter No. 3115/TCT-CS dated July 19, 2024, guiding the tax policy for services of overseas supplier TikTok Pte. Ltd. (“TikTok”) as follows

1. obligation of overseas suppliers to file and pay taxes in Vietnam
TikTok Pte Ltd. as an overseas supplier shall directly implement tax declaration and payment at the electronic information portal of the General Department of Taxation in case of registration and tax declaration and payment in accordance with Articles 76, 77 and 78 of Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.

VAT declaration and deduction
One of the conditions for the deduction of purchase VAT is having a VAT invoice for purchased goods and services, a VAT payment form at the import stage, or a VAT payment form on behalf of an overseas supplier. However, the invoices issued by TikTok do not meet the conditions for deducting VAT on purchases because they are not VAT invoices for companies that file VAT returns under the deduction method in accordance with the relevant laws.

3. inclusion in deductible expenses when calculating corporate income tax
If a Vietnamese company receives invoices or vouchers from TikTok for services related to the company’s business activities, and if they correctly indicate the company’s name, address, and tax code and meet the payment conditions, they can be deducted for CIT purposes. This calculation includes the amount of VAT payment shown on the invoices and vouchers issued by foreign suppliers to Vietnamese companies.

Although the number of companies using social networking services to promote Vietnamese companies has been increasing in recent years, companies using TikTok’s services need to understand and handle the above tax policies correctly.

 

References:
Official Letter No. 3115/TCT-CS dated July 19, 2024 of the General Department of Taxation