Digital advertising services offered by online platforms with a Vietnamese user base and revenue earned in the Vietnamese market will be subject to tax liability and Vietnam’s Law on Cybersecurity, according to a new draft decree.
The proposed regulation is among several changes put forward in the draft amendment to Decree No. 181 issued by the Vietnamese government in 2013, which further elaborates on some articles of the Law on Advertising.
According to the Ministry of Information and Communications (MoIT) — the lead agency for drafting the amendment, the current version of Decree No. 181 stipulates regulations on cross-border advertising activities in Vietnam, but has not yet assigned legal responsibility to service providers, most notably pre-publishing censorship responsibility toward advertised products and tax liabilities.
The administration of the current laws overlaps between MoIT and the Ministry of Culture, Sports, and Tourism as both have jurisdiction over cross-border advertising.
With an understanding of the difficulties of enforcing such laws, MoIT is drafting several amendments to Decree No. 181 in order to ensure media entities are held responsible for censorship and taxes.
Standing out from the draft amendments is the proposed regulation on foreign individuals and entities that provide cross-border advertising services and earn revenue from advertising in Vietnam via either websites, social media platforms or applications.
Under this proposal, these individuals and entities are subject to “compliance with Vietnamese laws on advertising, management, and provision of Internet services and online information,” as well as tax liability.
On another note, foreign individuals and entities that provide cross-border advertising services in Vietnam are also required to ensure that products promoted on their platforms abide by Vietnam’s Law on Advertising. They are also warned against placing product advertisements on content that violates Vietnam’s Law on Cybersecurity.
They are to prevent and remove illicit content if instructed to do so by MoIT and other relevant agencies.
Foreign advertising service providers must pay taxes on their business operations in Vietnam in addition to making sure products advertised on their platforms are placed in accordance with Vietnam’s Law on Cybersecurity.
Advertising publishers operating in Vietnam are instructed to develop their capacity to detect and remove illegally advertised products from cross-border advertising services, as well as products and service providers deemed illegal by Vietnamese authorities.
When it comes to advertisers, the publishing and broadcasting of advertisements on platforms deemed illegal by Vietnamese law are prohibited.
The draft decree also holds advertisers responsible for their advertised products in advertising contracts signed with foreign individuals and entities that provide cross-border advertising services in Vietnam.
Online advertising constitutes a huge proportion of advertising spending in Vietnam, said the MoIT.
The two biggest advertising platforms chosen by business and individual advertisers in Vietnam are both foreign entities: Google and Facebook, which together hold 70 percent of the total advertising revenue in the Southeast Asian country.
This article was originally published in Tuoitre