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Overseas online booking companies required to pay added tax in Vietnam

Xinhua, February 23, 2017 Adjust font size:

Overseas-based online room reservation companies such as Agoda, Traveloka, Booking.com, and Expedia will be required to pay five percent of the value added tax and five percent of corporate income tax of total sales in Vietnam, according to the Vietnam Ministry of Finance (MoF) on Thursday.

The ministry has decided so after Vietnam-based booking company Vntrip's executive director Le Dac Lam raised accusation of tax evasions on its foreign counterparts at the end of 2016.

"When a customer pays 100 U.S. dollars, companies like Agoda gets 20 U.S. dollars of commission. However, they do not have to pay any taxes in Vietnam," said Lam, adding that the government may lose millions of U.S. dollars of tax every year.

The MoF has guided the local tax departments to fulfill the tax procedures for these oversea based enterprises, reported local Tuoi Tre (Youth) online newspaper on Thursday.

The tax will be obtained through local hotels and hostels that have contracts with the overseas-based companies, said the MoF. Endit