Vietnam Regulatory Brief: New Zealand Diplomacy, Sports Betting, and e-Commerce Transfer Pricing
Vietnam, New Zealand to Continue Strong Ties
Vietnam and New Zealand are expected to continue forging close ties. New Zealand has reiterated its committed to providing Official Development Assistance (ODA) to Vietnam particularly in education, human resources, agriculture and rural development. The developments came about during talks between New Zealand’s Foreign Minister Murray McCully and Vietnam’s Foreign Minister Pham Binh Minh in Auckland on December 2. New Zealand also wants to increase imports and exports from Vietnam. This will be done by assessing the risk value of Vietnamese fruits while easing the sale of Vietnamese farm products and seafood in the market.
Officials also want to strengthen co-operation on national defense and security, education, people-to-people exchange and labor issues. Direct flights between Ho Chi Minh City and Auckland were already increasing tourism between both countries. Additionally, the countries want to extend the current Action Programme, effective until the end of 2016, to 2019. The Action Programme is an agreement between the two countries to support each other in regional and global forums. In addition, bilateral economic and trade is expected to reach US$1.7 billion by 2020 between the two countries.
Sports Betting Regulation Likely
The Vietnamese government is likely to ease betting in sports if a new regulation gets approved. Under a proposed draft, legal betting would be allowed on horse and dog races, and international football matches. Qualified operators will get five-year licenses after which the government will assess to see what changes are required to improve the system. Betting terminals will be set-up but will have to be least 500 meters from each other and can’t be near schools or playgrounds. Betting will not be done by telephones.
In addition, the age of betting has been raised from 18 to 21 years in the proposed policy. Relatives of jockeys, footballers, gambling operators and regulators will not be allowed from betting. The draft maintains the controversial US$45 (VND 1 million) that each gambler is allowed to wager on any single day on any one type of betting. Analysts have stated that having this rule will continue to encourage gamblers on less restrictive international betting sites. The proposed agreement will be sent to the government for approval in December.
Tax Authorities face Difficulties in Monitoring e-Commerce Transfer Pricing
Tax authorities are finding it difficult to manage e-commerce transfer pricing due to a lack of synchronization between several authorized agencies as per the General Department of Taxation (GDT). Authorities have further stated that they has been able to manage e-commerce businesses rather than individuals in the e-commerce sector. The main difficulties that tax authorities were facing was in determining e-commerce revenues and cost of businesses and individuals.
While tax authorities have basic knowledge in e-commerce, authorized agencies will have to better coordinate to prevent e-commerce sellers from using loopholes and evading taxes. To deal with this, the Ministry of Finance is working with the relevant authorities to come up with a range of legal documents to deal with tax fraud and evasion through e-commerce transfer pricing.
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