*

Temu's operations suspended in Vietnam for registration

non-compliance

*

Vietnamese trade ministry concerned about Chinese

platforms'

market impact

*

Vietnam to impose VAT on foreign e-commerce, ending tax

exemptions

(Adds Temu's comment in paragraph 7, change source to industry

ministry, adds details)

By Phuong Nguyen and Khanh Vu

HANOI, Dec 5 (Reuters) - Chinese online retailer Temu

has been told to suspend its operations in Vietnam after it

failed to meet an end-November deadline for business

registration in the Southeast Asian country, the Vietnamese

trade ministry said on Thursday.

Temu, owned by Chinese e-commerce giant PDD Holdings ( PDD )

, began offering its services in Vietnam in October. It

had been required to register with the government by the end of

November, or access to its internet domains and apps would be

blocked in the country.

"Temu operation will be temporarily suspended until it

completes the registration procedure," the ministry said in a

statement.

"The platform has submitted an application for e-commerce

service activities in Vietnam which is under authorities'

review," it added.

The statement did not say how long the suspension would

last, or what Temu needed to do to have it lifted.

On Thursday, Vietnamese language options had been removed

from Temu's website when it was accessed from Vietnam.

"Temu is working with the Vietnam E-commerce and Digital

Economy Agency and the Ministry of Industry and Trade to

register its provision of e-commerce services in Vietnam," a

notification on the website said.

In response to a Reuters' email request for comment, Temu

said it had submitted all required documents for the

registration but did not provide any timeframe for the

resumption of its operation.

The trade ministry and local businesses have expressed

concern about the impact of Chinese online platforms on local

markets due to deep discounting. The ministry has also said it

is worried about the potential sale of counterfeit items.

Temu has also stumbled in Indonesia where regulators have

asked Alphabet's Google (GOOGL.O) and Apple (AAPL.O) to block it

in their application stores in the country to protect small

merchants.

Vietnam's parliament last week approved changes to a tax law

to require local operators of foreign e-commerce platforms to

pay value-added tax (VAT), and called on the government to scrap

a tax exemption for low-cost imported goods.

The finance ministry said last week that it had begun the

process to scrap the tax break.

The move by legislators will be a blow to the

foreign-dominated e-commerce industry, which has benefited from

VAT exemption and rules in place since 2010 that stipulate

imported goods worth under 1 million dong ($40) are free from

duties.