In the future, accommodation booking services such as Agoda and Expedia will be required to pay taxes in order to operate in Vietnam.
According to Zing, the Ministry of Finance released a decree on January 18 detailing the country’s tax policies for online room booking services that are based overseas but conduct business in Vietnam. Specifically, the ministry requires companies such as Agoda, Traveloka, Booking and Expedia to pay both corporate and value-added taxes, each amounting to 5% of a firm's total income.
In cases where tourists make direct payments to accommodation providers in Vietnam, the venue – be it a hostel, hotel or private residence – will have to fulfill tax duties. Otherwise, if transactions are made between clients and the foreign-based websites, accommodation owners are obligated to inform the booking services of the amount of tax and then pay on behalf of the foreign vendor.
This is not the first time Vietnamese officials have levied taxes on international businesses operating in Vietnam. In recent years, global ridesharing giant Uber has often found itself at odds with the national government, in part due to a lack of legislation surrounding such online firms.
