Shall social media users in Vietnam verify accounts with phone numbers from December 25, 2024? Is internet service fee eligible for VAT reduction in Vietnam?

Shall social media users in Vietnam verify accounts with phone numbers from December 25, 2024?

Pursuant to point e, clause 3, Article 23 of Decree 147/2024/ND-CP regulating cross-border information provision as follows:

Cross-border Information Provision

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3. Only foreign organizations, enterprises, and individuals providing cross-border information into Vietnam and utilizing data storage rental services in Vietnam, or having a total number of visits from Vietnam (total visits) regularly within one month (average statistics over a continuous period of 06 months) of 100,000 (one hundred thousand) visits or more are responsible as follows:

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e) Verify the accounts of social media service users using a mobile phone number in Vietnam. Only if the user confirms the absence of a mobile phone number in Vietnam, should the foreign organization, enterprise, or individual providing the social media service verify the account using a personal identification number as per legal regulations on electronic identification and verification.

In cases where social media users utilize live-streaming features for commercial purposes, the foreign organization, enterprise, or individual providing the social media service shall verify the account using a personal identification number according to regulations on electronic identification and verification.

Ensure that only verified accounts are permitted to post information (articles, comments, livestreams) and share information on social media;

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Thus, from the effective date of Decree 147/2024/ND-CP on December 25, 2024, social media users utilizing data storage rental services in Vietnam or having a total number of visits from Vietnam (total visits) regularly in one month (average statistics over a continuous period of 06 months) of 100,000 (one hundred thousand) visits or more must verify their accounts using a mobile phone number in Vietnam.

Additionally, if social media users confirm they do not have a mobile phone number in Vietnam, foreign organizations, enterprises, or individuals providing social media services must verify the account using a personal identification number.

Shall social media users in Vietnam verify accounts with phone numbers from December 25, 2024? Is internet service fee eligible for VAT reduction in Vietnam? (Image from the Internet)

Is internet service fee eligible for VAT reduction in Vietnam?

Pursuant to Article 11 of Circular 219/2013/TT-BTC, which regulates the cases subject to a 10% VAT rate as follows:

10% VAT Rate

A 10% VAT rate applies to goods and services not regulated under Articles 4, 9, and 10 of this Circular.

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At the same time, according to the provisions in Articles 4, 9, and 10 of Circular 219/2013/TT-BTC, which regulate cases subject to 0%, 5% VAT rates, internet service fee provision is subject to a VAT rate of 10%.

Additionally, pursuant to Article 1 of Decree 72/2024/ND-CP that regulates VAT reduction:

Value Added Tax Reduction

1. Reduce VAT for groups of goods and services currently subjected to a 10% VAT rate, excluding the following:

a) Telecommunications, financial operations, banking, securities, insurance, real estate business, metals and fabricated metal products, mineral products (except coal mining), coke, refined petroleum, and chemical products. Details in Annex I issued with this Decree.

b) Goods and services subjected to special consumption tax. Details in Annex II issued with this Decree.

c) Information technology according to IT law. Details in Annex III issued with this Decree.

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2. VAT Reduction Rate

a) Business establishments applying VAT under the credit method shall be subject to an 8% VAT rate for goods and services stipulated in clause 1 of this Article.

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Moreover, according to the list stipulated in Annex 1 of Decree 72/2024/ND-CP, internet service fee provision forms are included.

Hence, the activity of providing internet service fee is not eligible for VAT reduction and will be subject to a 10% tax rate.

What is the time for determining VAT for service provision in Vietnam?

Based on clause 2, Article 8 of Circular 219/2013/TT-BTC regarding the time for determining VAT for service provision as follows:

- For service provision, it is the time of service completion or the time of issuing the service provision invoice, irrespective of whether payment has been received.

- For telecommunications services, it is the time of completing data reconciliation on telecommunications connection service charges per the economic contract between telecommunications service business establishments, but no later than 2 months from the month when the telecommunications connection service charge arose.