Firms such as Agoda and Expedia will have to pay a 10 percent duty. The Ministry of Finance has told foreign accommodation booking services to pay taxes if they wish to continue operating in Vietnam.
A document recently released by the ministry asked booking sites like Agoda, Traveloka and Expedia to pay a combined 10 percent of their total revenue made in Vietnam.
Vietnamese accommodation providers that have signed contracts with these foreign sites are obliged to fulfill these tax duties on behalf of them.
The ministry said that the move aims to prevent tax losses from foreign-based companies that are gaining from online business transactions.
Vietnamese accommodation booking site Vntrip had previously held a press conference and sent a document to the ministry accusing Singapore-based travel agency Agoda and some other sites of tax evasion.
Vntrip said that the acts of these foreign companies had resulted in huge losses to the state revenue and created unwholesome competition.
This is not the first time the Vietnamese government has imposed taxes on international businesses operating in the country. Last September, the popular ride-sharing service Uber was officially ordered to pay taxes after two years of providing transport services in Vietnam.