Vietnam: Shall entities managing e-commerce exchanges pay VAT on behalf of household businesses on e-commerce platforms from July 1, 2025?

What is e-commerce?

Pursuant to Clause 1, Article 3 of Decree 52/2013/ND-CP, the concept of e-commerce activities is defined as follows:

E-commerce activities involve conducting part or the whole process of commercial activities by electronic means connected to the Internet, mobile telecommunications network, or other open networks.

Vietnam: Shall entities managing e-commerce exchanges pay VAT on behalf of household businesses on e-commerce platforms from July 1, 2025? (Image from the Internet)

Vietnam: Shall entities managing e-commerce exchanges pay VAT on behalf of household businesses on e-commerce platforms from July 1, 2025?

Pursuant to Clause 5, Article 4 of the Law on Value-Added Tax 2024 (effective from July 1, 2025) stated as follows:

Taxpayers

...

4. Foreign providers without a permanent establishment in Vietnam that conduct e-commerce, digital platform-based business with organizations, individuals in Vietnam (hereinafter referred to as foreign providers); organizations acting as managers of foreign digital platforms carrying out deductions, paying tax obligations on behalf of foreign providers; business organizations in Vietnam applying the value-added tax deduction method for services purchased from foreign providers without a permanent establishment in Vietnam through e-commerce channels or digital platforms must carry out deductions, pay tax obligations on behalf of foreign providers.

5. Organizations acting as managers of e-commerce trading platforms, digital platforms with payment functions must carry out deductions, pay taxes on behalf, and declare the deducted taxes for household businesses, individual businesses on e-commerce platforms, digital platforms.

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Thus, from July 1, 2025, organizations acting as managers of e-commerce trading platforms, digital platforms with payment functions must carry out deductions, pay taxes on behalf of, and declare the deducted taxes for household businesses on e-commerce platforms.

What are regulations on the forms of organizing e-commerce activities in Vietnam?

Based on the provisions in Article 25 of Decree 52/2013/ND-CP amended by Clause 7, Article 1 of Decree 85/2021/ND-CP regarding the forms of organizing e-commerce activities, are specified as follows:

- E-commerce websites selling goods are e-commerce websites established by merchants, organizations, or individuals to serve the promotion, sale of goods, or provision of their services.

- Websites providing e-commerce services are e-commerce websites set up by merchants, organizations to provide an environment for other merchants, organizations, or individuals to conduct commercial activities. E-commerce service websites include the following types:

+ E-commerce exchanges;

+ Online auction websites;

+ Online promotion websites;

+ Other types of websites as specified by the Ministry of Industry and Trade.

- With applications installed on electronic devices connected to the network allowing users to access the database of other merchants, organizations, or individuals to buy and sell goods, provide or use services, depending on the features of that application, merchants or organizations must comply with the regulations on e-commerce websites selling goods or e-commerce service websites under this Decree.

- The Ministry of Industry and Trade shall specifically regulate e-commerce activities conducted over mobile telecommunications networks.

How are the current principles of e-commerce activities specifically regulated?

Based on the provisions in Article 26 of Decree 52/2013/ND-CP amended and supplemented by points a, b Clause 8, Article 1 of Decree 85/2021/ND-CP regarding the specific principles of e-commerce activities are as follows:

- The principle of freedom, voluntary agreement in e-commerce transactions. The parties participating in e-commerce activities have the right to freely agree not in conflict with the law to establish the rights and obligations of each party in the transaction. This agreement serves as the basis for resolving disputes arising during the transaction process.

- The principle of determining the scope of business activities in e-commerce. If merchants, organizations, or individuals conduct sales, service provision, and commercial promotion on e-commerce websites without specifying the geographical limits of these activities, then such business activities are considered nationwide.

- The principle of determining obligations to protect consumer rights in e-commerce activities:

+ Owners of e-commerce websites selling goods and sellers on e-commerce service websites must comply with the provisions of the Consumer Protection Law when providing goods or services to customers;

+ Customers on e-commerce service websites are consumers of e-commerce services and consumers of goods or services provided by sellers on these websites;

+ In case merchants, organizations providing e-commerce services offer information services about goods or services of the seller to consumers on e-commerce websites, those merchants or organizations act as a third party in providing information under the law on consumer protection.

- The principle of trading restricted goods, services, conditional business, in industries and trades with conditional business investment via e-commerce. E-commerce activities involving restricted goods, services, conditional business must comply with related legal regulations. Entities applying e-commerce to trade restricted goods or services, or conditional business goods or services must adhere to relevant legal regulations pertaining to those goods or services.

- Participants in e-commerce activities have the obligation to comply with legal regulations on information security, network security, and other related laws.