E-Commerce Platforms in Vietnam: Proposed New Tax Responsibilities for Platform Owners

In recent years, the rapid growth of e-commerce in Vietnam has prompted significant changes in the regulatory landscape. The Vietnamese government is now proposing new tax responsibilities for e-commerce platform owners to ensure better compliance and transparency. The Ecovis experts from ECOVIS AFA VIETNAM explore the current tax administration requirements and the proposed amendments to the Tax Administration Act aimed at streamlining tax declaration and payment processes for businesses operating on e-commerce platforms.

According to the existing law on tax administration and guiding documents, companies that own e-commerce platforms must provide the tax authorities with complete, accurate and timely information, as required, about traders, organizations and individuals involved in buying and selling goods and services on their platforms.

This is in line with the tax administration’s duty to collect taxpayer information, which involves not only the owners of e-commerce platforms but also other agencies, organizations and businesses.

The requirement for e-commerce platform owners to provide information to the tax authorities does not impose any additional time, effort or financial cost on businesses. This information is submitted on a quarterly basis through the Electronic Information Portal of the General Department of Taxation. To assist e-commerce platform owners in providing information about individuals conducting business on their platforms, the General Department of Taxation has been operating the E-commerce Information Portal since 15 December 2022. This portal collects information from e-commerce trading platforms about the organizations and individuals doing business on them.

Since its implementation, the E-commerce Information Portal has recorded data from 357 e-commerce trading platforms. These platforms have reported that over 191,000 organizations and individuals are participating in trading, with a total transaction value of nearly VND 59,000 billion. The General Department of Taxation has upgraded its internal application to analyze and process this data, thereby supporting tax authorities at all levels in their tax management efforts. Additionally, the tax authority continues to deploy electronic tax services to facilitate taxpayers in general, and those engaged in e-commerce in particular.

Under the current tax management regulations, individuals doing business on e-commerce platforms still must declare and pay taxes directly to the tax authorities, just like traditional commercial and service businesses, as there are no special rules. This requirement is costly in terms of time, effort, and money for both online traders and tax authorities. Many online sellers lack knowledge or experience in accounting, invoicing and documentation, making it difficult for them to declare taxes. As a result, many must hire tax accounting services, incurring additional expenses. Or, in many cases, they inadvertently owe tax and face significant late payment fees.

To facilitate business operations on e-commerce platforms, the Ministry of Finance proposes amendments to the Tax Administration Act.  These amendments should include provisions for tax declaration and payment on behalf of business households and individuals engaged in business e-commerce activities, as well as cases of direct tax declaration. This reform aims to streamline administrative procedures, reduce the number of entities required to declare taxes, and align tax declaration and payment processes with the unique characteristics of e-commerce businesses.

The above content has been researched and summarized by ECOVIS AFA VIETNAM from widely published legal documents and articles. If you would like to discuss more in-depth issues, please contact us using the information below:

Nghia Tran, Partner, ECOVIS AFA VIETNAM
Da Nang City, Vietnam
Email: Nghia.Tran@ecovis.com.vn