Foreign streaming firms have combined revenue of approximately $43.15 million from around 1 million Vietnamese subscribers.
As the coronavirus pandemic pushes the global economy to online and tech reliance, Vietnam is seeking to maximize tax collection to develop its economy. According to news outlet Reuters, Vietnamโs Information Minister on Tuesday accused foreign streaming companies of tax evasion which in turn disadvantages the local companies. Precisely, the minister pointed out that Netflix Inc (NASDAQ: NFLX) and Apple Inc (NASDAQ: AAPL) have been evading tax despite having a significant number of subscribers in Vietnam.
Netflix and Other Foreign Tech Companies in Vietnam
The minister said that foreign streaming firms have combined revenue of approximately $43.15 million from around 1 million Vietnamese subscribers. However, these firms do not pay a dime in Vietnam thus having an unfair market for local competition.
โDomestic companies have to abide by tax and content regulations while foreign firms do not, which is unfair competition,โ said Nguyen Manh Hung, information minister on Tuesday.
He further went ahead to point out that some content on Netflix had violated the set content regulations of Vietnam. According to Nguyen, โNetflix has flouted regulations related to the history and sovereignty of the country, violence, drug use, and sex.โ Notably, two years ago the Vietnam regulators introduced a cybersecurity law that requires online foreign businesses in the country to store their data locally. However, Netflix has stated that it has no plans to store user data in Vietnam but indicated it is in talks with the government on the pressing issues.
โWe 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,โ a Netflix spokesperson said in the statement.
Nguyen said that his ministry is closely working with the ministry of finance and also the department of tax to calculate deductible tax from foreign streaming companies.
Netflix and Apple Shares
American tech giants continue to face hostile challenges overseas thus putting pressure on their stock value. Recently, the Philippines, Thailand and Indonesia introduced legislative law to ensure foreign tech companies pay local taxes.
Netflix shares closed yesterday trading at $480.24, 2.07% up. The company has a market valuation of approximately $207.86 billion and 441.8 million outstanding shares.
At the height of the coronavirus pandemic, Netflix shares rallied considerably although some profits have been eaten by the recent drop.
According to MarketWatch analytics, Netflix shares are up 69.63% in the past year, up 48.42% year to date. However, they have dropped approximately 11.3% in the past one month.
On the other hand, Apple shares have rallied 75.40% in the past year and approximately 57.90% year to date.
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