How should Netflix be taxed? How to tax Netflix, Facebook and Google is an intricate question for Vietnamese state management agencies.  A lawyer, when questioned about the legitimacy of Netflix service in Vietnam, affirmed that under the WTO (World Trade Organization) and TPP (Trans Pacific Partnership) Agreement, it is lawful to provide cross-border services like Netflix. In other words, preventing cross-border services from entering Vietnam would be impossible. Tuoi Tre quoted inspectors from the Ministry of Information and Communication as affirming that Netflix was violating Vietnamese law.  How to tax Netflix, Facebook and Google is an intricate question for Vietnamese state management agencies. Meanwhile, Thoi bao Kinh Te SaiGon quoted its source saying that Netfix was not violating laws, because providing services across the border is allowed by the rules of WTO, of which Vietnam is a member. “With the provisions in GATS/WTO (General Agreement on Trade and Services), it is impossible to prohibit or place difficulties on Netflix,” the source said. A question then was raised about how Vietnam can collect taxes from cross-border service providers who do not set up offices in Vietnam. The question was once raised some years ago when Facebook ads reached out to millions of Vietnamese consumers, when Apple Music began providing online music service, and more recently, when Uber began providing taxi service through smart software. Vietnamese businesses have many times complained that they envy Facebook and Google because foreign firms still can make big money in Vietnam even though they don’t have to set up offices in Vietnam and don’t have to pay tax to Vietnam. Ministry of Finance (MOF) officials vow to force service providers to pay tax, but no proper solution to tax them has been found. In the case of Netflix, analysts have said that Netflix would be able to earn big money in the Vietnamese market even though there is no need to establish legal entities and no need to pay tax. This will put Vietnamese firms in the same field at a disadvantage. They would have to pay tax, such as FPT Play. As such, now is not the time to discuss whether Netflix violates Vietnamese laws, but rather how taxes should be collected on the services. In fact, the lawyer noted it would be nearly impossible to collect tax from service providers directly, because they are not covered by the laws set by Vietnam. Meanwhile, Circular No 103 on tax duties of foreign legal entities and individuals who do business in Vietnam or have income in Vietnam does not mention service providing like Netflix’s. He noted that the problem could be resolved if Netflix authorizes a third party to deal with Vietnamese customers on behalf of Netflix. If so, the third party, as the contractor, will have to pay tax for Netflix.  TBKTSG