Shall the Decree on tax administration for e-commerce business in Vietnam be issued in March 2025?

Shall the Decree on tax administration for e-commerce business in Vietnam be issued in March 2025?

Recently, on December 19, 2024, the Prime Minister of the Government of Vietnam officially issued Decision 1610/QD-TTg 2024 guiding the Directory and assignment of agencies responsible for drafting documents to guide the Laws and Resolutions passed by the National Assembly of the XV term at the 8th Session.

Download Decision 1610/QD-TTg 2024.

In the Directory and assignment of agencies responsible for drafting documents to guide the Laws and Resolutions passed by the National Assembly of the XV term at the 8th Session, attached to Decision 1610/QD-TTg 2024, there is a provision assigning the Ministry of Finance to draft a Decree on tax administration for businesses on e-commerce platforms of business households and individuals.

The drafted Decree will guide item b, clause 5, Article 6 of the Law Amending the Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Use of Public Assets, Law on Tax Administration, Law on Personal Income Tax, Law on National Reserve, Law on Handling of Administrative Violations 2024 (effective from January 1, 2025).

The tax administration Decree for e-commerce businesses of business households and individuals is expected to be issued under simplified procedures in March 2025 and come into force from April 1, 2025.

Shall the Decree on tax administration for e-commerce business in Vietnam be issued in March 2025? (Image from Internet)

From April 1, 2025, shall e-commerce platforms pay taxes on behalf of sellers in Vietnam?

Based on item b, clause 5, Article 6 of the Law Amending the Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Use of Public Assets, Law on Tax Administration, Law on Personal Income Tax, Law on National Reserve, Law on Handling of Administrative Violations 2024 (effective from January 1, 2025), there are provisions on amending and supplementing certain articles of the Law on Tax Administration as follows:

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

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5. Amend and supplement certain clauses of Article 42 as follows:

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

4a. For households and individuals engaged in business activities on e-commerce platforms, digital platforms, the entity managing the e-commerce platform, the entity managing the digital platform with payment functions (including both domestic and foreign entities) and other organizations engaged in digital economic activities as prescribed by the Government of Vietnam shall withhold tax, pay tax on behalf, and declare the withheld tax for business households and individuals. In cases where households or individuals engaged in business on e-commerce platforms, digital platforms are not subject to withholding and tax payment, they are required to directly perform taxpayer registration, declare tax, and pay tax.

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Additionally, based on clause 5, Article 10 of the Law Amending the Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Use of Public Assets, Law on Tax Administration, Law on Personal Income Tax, Law on National Reserve, Law on Handling of Administrative Violations 2024 (effective from January 1, 2025) regarding the effect of enforcement as follows:

Effect of Enforcement

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5. The provision at point b, clause 5, Article 6 of this Law shall take effect from April 1, 2025.

Thus, from April 1, 2025, e-commerce platforms must withhold, pay tax on behalf, and declare the withheld tax for commercial transactions on e-commerce platforms for households and individuals, known as sellers.

Unless households or individuals engaged in business on e-commerce platforms are not eligible for withholding and tax payment, they are required to directly perform taxpayer registration, declare tax, and pay tax.

What are the locations and methods of tax payment in Vietnam?

Based on Article 56 of the Tax Administration Law 2019 specifying the locations and methods of tax payment as follows:

- Taxpayers shall remit tax money into the state budget according to the following regulations:

+ At the State Treasury;

+ At the tax administration agency receiving tax declaration dossiers;

+ Through organizations authorized by the tax administration agency to collect taxes;

+ Through commercial banks, other credit institutions, and service organizations as prescribed by law.

- The State Treasury, commercial banks, other credit institutions, and service organizations as prescribed by law have the responsibility to arrange locations, facilities, staff, and personnel to ensure convenience for taxpayers to promptly remit tax money into the state budget.

- Agencies and organizations collecting taxes or deducting taxes must issue a tax payment receipt to the taxpayer.

- Within 08 working hours from receiving the taxpayer's cash, the agency or organization collecting taxes must transfer the money into the state budget. For tax collection in cash in remote, isolated areas, islands, or areas with difficult access, the time frame for transferring tax money into the state budget is regulated by the Minister of Finance.