Not only "virtual offices" have invoice trading problem
“Whether it is a real office or a “virtual office”, a legal entity is still a real person! Who is the legal representative? Who is responsible for the business activities?”.
In issue 10-12, Ho Chi Minh City Law pointed out that the situation of “virtual offices” for rent is increasingly flourishing. For businesses, this is a very convenient form of operation, however, for management agencies, it seems that some complicated problems are arising. The Tax Department of District 1, Ho Chi Minh City believes that businesses renting “virtual offices” are violating the Law on Enterprises. Regarding this issue, Ho Chi Minh City Law recorded the opinions of a number of experts and managers.
Mr. Nguyen Dinh Cung, Head of Macroeconomic Policy Research Department, Central Institute for Economic Management:
There is no shortage of regulations, the problem is how to enforce them.
Currently, if the tax authority finds that a business does not fulfill its tax obligations, the tax authority still has professional measures to inspect and handle the business. This is a matter of how the current law is enforced, not a lack of regulations.
Whether it is a real office or a “virtual office”, a legal entity still has real people! Who is the legal representative? Who is responsible for the business activities? The management agency tries to manage people!
The emergence of new models is the progress of a modern society and to adapt, the management agency must improve its capacity and management methods.
Room 606 of Indochina Park Tower (District 1, Ho Chi Minh City) is where many businesses rent addresses as virtual offices. Photo: HTD
Master Tran Thanh Tung, Phuc & Phuc Law Firm:
Real offices are still full of invoice trading
The “virtual office” model has long been around the world and in Vietnam as a need in the current situation of high office rental prices. This model helps many businesses save on office rental costs, recruiting receptionists and secretaries, but still have a polite and professional office to receive guests. This model is effective for small businesses, or for businesses specializing in providing services at customers' headquarters.
Legally, renting and subleasing offices is not illegal. Therefore, if it is believed that the existence of the “virtual office” model will cause tax evasion and abuse of invoice trading, the management agency must prove it with actual data. However, it must be noted that in the past, although the “virtual office” model had not yet been established, in many real offices, the situation of buying and selling invoices and tax evasion still occurred!
If we are afraid that "virtual offices" cause tax evasion and tighten regulations on headquarters for the "virtual office" model, it is not convincing enough and may affect genuine businessmen.
If the management agency wants to set regulations for management, it needs to prove what percentage of businesses with "virtual offices" are violating the law, from there come up with a reasonable way to handle it, instead of leveling things or looking at "virtual offices" as all black. Furthermore, it is necessary to clearly state the management purpose and the necessity of this management.
Whether the office is “virtual” or “real” is not as important as how the business operates. Therefore, the core issue is people management, not headquarters management. Every business has a legal representative who is responsible to the state agency for the business’s operations. The management agency should find a way to manage the legal representative rather than finding a way to manage the “virtual office”. This is the right approach.
A business rents a “virtual office”:
Don't look at us with suspicion!
I know that the current management agencies look at businesses with suspicion! They are worried about businesses evading taxes, businesses going missing, unpaid wages, unpaid insurance… However, I hope that the management agencies will share with businesses. I myself used to rent a head office and had a hard time maintaining a head office for a few years without skyrocketing rents. When I rented a “virtual office” service, it was both economical, had a long-term contact address, and avoided having to go through business registration procedures when changing locations.
If I don't rent a "virtual office", I will probably have to use any address, as long as it is stable, to declare it as the headquarters and also use this address as the place to receive mail, tax notices...
If the management agency is concerned, it should check, review and re-evaluate how businesses with "virtual offices" comply with the law, and whether the violation rate is higher than that of businesses with "real offices".
(According to City Law)
