Law on Amendments to 9 Laws Including the Law on Securities, Law on Accounting, Law on Tax Administration, Law on Personal Income Tax promulgated in Vietnam?

Law on Amendments to 9 Laws Including the Law on Securities, Law on Accounting, Law on Tax Administration, Law on Personal Income Tax promulgated in Vietnam?

On November 29, during the 8th Session, the National Assembly voted to pass the Law on Amendments to and supplementing a number of articles of the Law on Securities; Law on Accounting; Independent Audit Law; State Budget Law; Law on Management and Use of Public Assets; Law on Tax Administration; Law on Personal Income Tax; National Reserve Law; Law on Administrative Violations (referred to as the Law on Amendments to 9 Laws), effective from January 1, 2025.

To date, the Standing Committee of the National Assembly has directed the full study and adoption of opinions from Members of the National Assembly to revise and improve the draft Law in terms of both content and document technique for submission to the National Assembly for consideration and approval. After receiving feedback, revising, and perfecting, the draft Law contains 11 articles, adding 2 articles compared to the draft Law submitted to the National Assembly at the beginning of the 8th Session of the 15th National Assembly.

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Law on Amendments to 9 Laws Including the Law on Securities, Law on Accounting, Law on Tax Administration, Law on Personal Income Tax promulgated in Vietnam? (Image from Internet)

Shall e-commerce platform managers pay personal income tax on behalf of sellers in Vietnam from January 1, 2025?

According to Article 8 of the Law on Amendments to 9 Laws (document effective from January 1, 2025) regulating the amendment, supplementation of some articles of the Law on Personal Income Tax as follows:

Amendment and Supplementation of some Articles of the Law on Personal Income Tax

1. Amend the title of the Article and add point a1 after point a clause 1 Article 24 as follows:

a) Amend the title of the Article as follows:

“Article 24. Responsibilities of organizations, individuals paying income; organizations managing e-commerce trading platforms; managers of digital platforms with payment functions; other organizations with digital economic activities; responsibility of the taxpayer as a resident individual”;

b) Add point a1 after point a clause 1 as follows:

“a1) Organizations managing e-commerce trading platforms, managers of digital platforms with payment functions, other organizations with digital economic activities according to regulations of the Government of Vietnam shall implement tax withholding, pay tax on behalf, and declare the withheld tax amount for business transactions on e-commerce platforms, digital platforms of households, and individuals;”.

2. Amend, Supplement Article 33 as follows:

“Article 33. Responsibilities of organizations, individuals paying income; organizations managing e-commerce trading platforms; managers of digital platforms with payment functions; other organizations with digital economic activities; responsibility of the taxpayer as a non-resident individual

1. Organizations, individuals paying income are responsible for deducting and paying tax into the state budget for each taxable income payment made to the taxpayer.

2. Organizations managing e-commerce trading platforms, managers of digital platforms with payment functions, other organizations with digital economic activities according to regulations of the Government of Vietnam shall implement tax withholding, pay tax on behalf, and declare the withheld tax amount for business transactions on e-commerce platforms, digital platforms of households, individuals.

3. The taxpayer as a non-resident individual is responsible for declaring, paying tax on taxable income according to the law on tax management.”.

Simultaneously, based on point b clause 5 Article 6 of the Law on Amendments to 9 Laws (document effective from January 1, 2025) regulating the amendment, supplementation of some articles of the Law on Tax Administration as follows:

Amendment and Supplementation of Some Articles of the Law on Tax Administration

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5. Amend, supplement some clauses of Article 42 as follows:

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b) Add clause 4a after clause 4 as follows:

“4a. For households, individuals engaging in business on e-commerce platforms, digital platforms, the organization managing the e-commerce trading platform, manager of digital platforms with payment functions (including both domestic and foreign organizations) and other organizations with digital economic activities according to the regulations of the Government of Vietnam shall implement tax withholding, pay tax on behalf, and declare the withheld tax amount for business households, individual businesses. If households, individuals engaging in business on e-commerce platforms, digital platforms are not eligible for withholding and paying taxes on behalf, they are required to directly perform taxpayer registration, tax declaration, and payment.

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Therefore, once the Law on Amendments to 9 Laws takes effect from January 1, 2025, e-commerce platform managers must perform tax withholding, pay tax on behalf and declare the withheld tax amount for business transactions on e-commerce platforms of households, individuals referred to as sellers.

Moreover, if households, individuals engaging in business on e-commerce platforms are not subject to tax withholding and payment on behalf, they are obligated to directly perform taxpayer registration, tax declaration, and tax payment.

Which entities shall pay personal income tax in Vietnam under current regulations?

Pursuant to Article 2 of the Law on Personal Income Tax 2007 regulating personal income taxpayers as follows:

- Resident individuals with taxable income arising both inside and outside Vietnam

- Non-resident individuals with taxable income arising within Vietnam territory.

Additionally, resident and non-resident individuals are defined as follows:

- A resident individual is a person who meets one of the following conditions:

+ Being present in Vietnam for 183 days or more within a calendar year or for 12 consecutive months from the first date of presence in Vietnam;

+ Having a regular residence in Vietnam, including an established residence registered for permanent stay or a rented house in Vietnam under a lease contract with a term.

- A non-resident individual is a person who does not meet the conditions stipulated in clause 2 Article 2 of the Law on Personal Income Tax 2007.