How are blockchain game startups like Axie Infinity doing and how will they pay taxes in Vietnam?

Tram Ho

In the past few months, Trung Nguyen – founder of Sky Mavis – the startup that owns the blockchain game Axie Infinity has become a bright star in the Vietnamese startup market. It is all because of the continuous spike in price of Axie Infinity’s AXS token, pushing Axie Infinity’s capitalization to increase at a rocket speed to $ 1 billion and to more than $ 3 billion.

However, as grandparents often say, ‘big boat, big waves’, immediately the media and tax authorities spoke out: why capitalize several billion dollars, receive a lot of investment money, collect money from players So high, pay 0 dong tax?! The tax authority also said it would plan a surprise inspection.

Các startup game blockchain như Axie Infinity đang hoạt động thế nào và họ sẽ đóng thuế tại Việt Nam ra sao? - Ảnh 1.

Axie Infinity in Vietnam plays an outsourcing role for Sky Mavis in Singapore.

To better understand the issue, we talked to Trung Nguyen – founder of Sky Mavis – Axie Infinity, and a few individuals and organizations related to startups, blockchain and Crypto.

According to founder Trung Nguyen : ” Sky Mavis was established in Singapore and the business in Vietnam is just an outsourcing company for businesses in Singapore. Last year, a small company in Vietnam completed the settlement. Last year, the whole company companies in Singapore and Vietnam both lost money and the cryptocurrency market capitalization of Axie Infinity has nothing to do with the Vietnam-based company.

This year, the processing company in Vietnam has not yet settled, but it is predicted that there will be no profit. If the business is not profitable, it cannot pay taxes! “.

Các startup game blockchain như Axie Infinity đang hoạt động thế nào và họ sẽ đóng thuế tại Việt Nam ra sao? - Ảnh 2.

As shared by an anonymous blockchain game startup founder, just IDO Token Play, their business is also registered in Singapore, because in the future they will operate in the world market, not in Vietnam. – because this segment of the Vietnamese market is still in its infancy, game players are not interested yet. In general, according to this startup, if you have a global business plan, you should first set up your company in Singapore.

Accordingly, if your company in Singapore generates income into the account, the Singapore Government will tax it. Furthermore, there are laws specific to blockchain in Singapore.

In Vietnam, only a few people participate in blockchain gaming, the global market is new. Vietnam still does not really have a law for this field, so if registered in Vietnam, it may not be exempt from tax, the tax on technology startups still has to “apply back and forth”.

In Vietnam, a startup can register a blockchain-based startup project in some industries such as agriculture and finance, but the Crypto segment cannot, because it has not been allowed by law and specific regulations. .

The outsourcing and human resources company in Vietnam will be responsible for writing software, operating it, and operating mainly in Singapore. This software outsourcing company will pay corporate income tax (if there is profit) and personal income for personnel in Vietnam.

This Crypto segment in countries around the world has never touched taxes. Of course, this type of company can be registered in Vietnam, but it does nothing.

Market capitalization on large cryptocurrency exchanges has nothing to do with the revenue or profit of the startup, sometimes the token capitalization is several billion dollars, but maybe the revenue is nothing and even a loss “, this founder concludes.

Because Vietnam does not have specific laws on Crypto or blockchain games, if the percentage of Vietnamese technology startups that register their business abroad – typically Singapore is about 50%, the blockchain game segment is 100. %.

On this issue, the perspective of Ms. Nicole Nguyen – Co-founder of KryptoVietnam and Co-founder Duelist King is even broader.

Các startup game blockchain như Axie Infinity đang hoạt động thế nào và họ sẽ đóng thuế tại Việt Nam ra sao? - Ảnh 3.

Ms. Nicole Nguyen – Co-founder of KryptoVietnam and Co-founder of Duelist King

According to Nicole, the blockchain ecosystem in Vietnam has been thriving since before the storm called Axie Infinity. Because Vietnam converges many favorable factors for this segment such as: having a force of quality programmers and reasonable costs, the Crypto market in general is developing and a young population proficient in technology.

However, it is necessary to review the definition of “Vietnamese company” because there are many Vietnamese founders, but the project can be registered in other countries such as Singapore, the US, Hong Kong …

In addition, the potential of the market not only comes from Crypto but also from blockchain applications in many areas such as education and agriculture, although it is only at the experimental level.

Where businesses register, there are two factors pushing and pulling. The internal push factor is definitely related to the environment, tax, transparency. The pull factor is related to investor taste. private sector – they prioritize businesses located in Hong Kong, Singapore…

Since most of the funds are also there, the ecosystem is developed, full of players in the incubator/accelerator/business support segment, easy to exchange and meet. In addition, these countries also have clear regulations on auditing and transparency in the paperwork process.

So caring alone will not solve the problem without both these pull and push factors. We can step by step create a sandbox, in order to create conditions for startups located abroad to gradually shift or bring part of their business activities back to the country, to facilitate business to avoid double taxation.

On the other hand, we should also focus on building a domestic ecosystem, consider incentives for investors, and facilitate the transfer of capital, especially foreign currency. Only then can there be a significant shift ,” suggested Nicole Nguyen.

Finally, Mr. Nguyen Ngoc Dung – Vice President – Head of Representative Office of VECOM in Ho Chi Minh City also commented : ” We should not mention tax here, otherwise an incident like Nguyen Ha Dong may happen. (Flappy Bird) second, may lose all talent out of Vietnam.

Moreover, most businesses in this industry are registered in Singapore, do not generate revenue in Vietnam, so they cannot collect corporate income tax!” .

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Source : Genk