On October 19th, 2020, the Government issued Decree 126/2020/ND-CP (“Decree 126”) detailing a number of articles of the Law on Tax Administration No.38/2019/QH14.  In particular, Decree 126 provides for the responsibilities of commercial banks in providing customer account information and withholding tax on customers’ accounts opened at banks for tax authorities.

Decree 126 provides for the responsibilities of commercial banks as follows:

Provide customer account information for tax authorities

• Pursuant to Clause 2, Article 30 of Decree 126, commercial banks are responsible for providing tax authorities with information on taxpayers’ payment accounts opened at banks, including: name of account holder. Account number according to the tax code issued by the tax authority, date of opening of the account, date of account closure.  The provision of this account information is done for the first time within 90 days from December 5th, 2020 and account information is updated monthly for 10 days of the following month.
• In addition, commercial banks must also provide transaction information through their accounts, balances, and transaction data at the request of the head of the tax authority to serve the purpose of inspection, verification and definition tax payables and taking coercive measures to enforce administrative decisions on tax administration in accordance with the tax law.
• Withholding tax on customers accounts opened at banks
• Under the provisions of Clause 3, Article 30 of Decree 126, banks are required to withhold and pay tax obligations of an overseas supplier with a permanent establishment in Vietnam that operates e-commerce, doing business on a digital basis with domestic organizations and individuals (hereinafter referred to as overseas suppliers) if the overseas supplier has not yet registered, declared and paid taxes.  At that time, a commercial bank shall withhold and pay tax obligations on behalf of the tax law for each product or service that the buyer is an individual in Vietnam pays to the supplier.  foreign.  The name and website address of the overseas supplier will be provided by the General Department of Taxation to the commercial bank.
• In case an individual buys goods or services from a foreign supplier and pays by card or other forms that the commercial bank cannot deduct or pay, the commercial bank shall be responsible  track the amount transferred to overseas suppliers and send monthly to the General Department of Taxation.
• Although the Decree requires tax authorities to be responsible for the confidentiality of information and to be fully responsible for the safety of information in accordance with the law, however, there are concerns about the possibility of information disclosure of the taxpayer as well as the confidentiality of the bank.