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YouTube 'Milestone' Highlights Vietnam Growth and Growing Pains


YouTube passed out branded cupcakes at a promotional event in Ho Chi Minh City, Vietnam.

The Vietnamese comedy channel FAP TV has become the first YouTube account to hit the 10 million subscribers mark in the Southeast Asian country of nearly 100 million people, according to an announcement on Thursday from the Asia Pacific office of Google, which owns YouTube.

Vietnam has been one of the fastest growing markets for the video site, especially after Google invested in computer servers in the country, which have sped up streaming and download times. YouTube has also invested heavily in Vietnamese language content and advertising.

But the process has come with growing pains, too, most notably in the realms of taxes and censorship. The site has blocked videos with content critical of the government. While these actions are taken following requests from the state, YouTube says it follows the same protocol around the world when it gets requests from governments to take down clips. Videos have been blocked in countries from Algeria to Germany, with reasons cited ranging from hate speech to terrorism.

In its transparency report for Vietnam Google notes that it received a request from the Vietnamese government to remove 28 YouTube videos inciting violent protests during the Vietnamese Independence Day period (Vietnam's Independence Day is September 2). Google says it removed 12 videos for violating YouTube Community Guidelines that prohibit publishing instructions to commit violent acts. It restricted access to 4 other videos in Vietnam. The company did not remove the remaining 12 videos.

Google also appears to be complying with a new cyber security law in Vietnam, which requires foreign companies to set up representative offices inside the country. Some have speculated that one of the factors motivating the law is to ensure that multinational companies do not evade taxes.

Vietnam has been trying to collect taxes from both Google and YouTube, as well as other foreign tech companies that make profits from Vietnamese customers while declaring their profits to tax authorities in other countries with lower tax rates like Singapore. In contrast to a bricks and mortar store that sells bicycles, which are simple to tax, foreign tech companies tend to sell intangible services, like advertising attached to YouTube videos, which are harder to tax.

“Aside from the matter of studying amendments to laws and regulations of tax administration, cooperation is needed between state agencies and industry,” Luu Duc Huy, head of the policy department at the Vietnamese General Department of Tax, told the government TV station, V News. “Second, cooperation is needed between the Vietnamese tax agency and other countries’ tax agencies.”

Google has said repeatedly that it follows all laws in the countries where it operates.

It is not just Vietnam. Most countries from Thailand to France are trying to figure out how to collect taxes on YouTube and other businesses that physically operate beyond their borders but make money from citizens within the borders. As Huy noted, the solution is likely to derive from these multiple tax authorities coming together, as is now being proposed by the international Organization for Economic Cooperation and Development.

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