What are amendments to personal income tax policies in Vietnam from January 1, 2025?

What are amendments to personal income tax policies in Vietnam from January 1, 2025?

Below is a summary of several key amendments to personal income tax policy effective from January 1, 2025:

(1) E-commerce platforms to pay tax on behalf of sellers from April 1, 2025

- Based on Article 8 of Law No. 56/2024/QH15 (effective from January 1, 2025), which amends and supplements several provisions of the Personal Income Tax Law 2007.

Organizations managing e-commerce platforms, digital platforms with payment functions, and other organizations engaging in digital economic activities have the responsibility to withhold and remit taxes on behalf of, and declare the withheld taxes for, business transactions on e-commerce platforms and digital platforms of households and individuals.

- Furthermore, according to Clause 5, Article 6 of Law No. 56/2024/QH15 (effective from April 1, 2025), it also amends and supplements the regulations related to business activities on e-commerce platforms and digital platforms as stipulated in the Tax Administration Law 2019 as follows:

+ For households and individuals conducting business on e-commerce platforms and digital platforms, organizations that are managers of e-commerce platforms, digital platforms with payment functions (including both domestic and foreign organizations), and other organizations engaging in digital economic activities as stipulated by the Government of Vietnam must withhold and remit taxes on behalf of and declare the withheld taxes for business households and individuals.

+ For e-commerce business activities, business based on digital platforms, and other services provided by foreign suppliers, the foreign suppliers are obliged to directly or through authorization to conduct taxpayer registration, tax declaration, and tax payment in Vietnam as stipulated by the Minister of Finance.

+ In cases where households and individuals conducting business on e-commerce platforms and digital platforms are not subject to withholding and tax payment on their behalf, they are obliged to directly conduct taxpayer registration, tax declaration, and tax payment.

Therefore, from April 1, 2025, organizations managing e-commerce platforms are responsible for withholding and remitting taxes on behalf of business households and individuals selling on e-commerce platforms.

(2) The General Department of Taxation announces the Electronic Information Portal for registration, declaration, and tax payment for business households, individuals from e-commerce

Based on Clause 5, Article 6 of Law No. 56/2024/QH15 (effective from April 1, 2025), which specifies the tax obligations of business households, individuals on e-commerce platforms as follows:

In the event that households and individuals conducting business on e-commerce platforms and digital platforms are not subject to withholding and tax payment on their behalf, they must directly conduct taxpayer registration, tax declaration, and tax payment.

Furthermore, on December 19, the General Department of Taxation announced the electronic information portal to support business households and individuals on e-commerce platforms, doing business on digital platforms to register, declare, and pay taxes, including personal income tax at the address: https://canhantmdt.gdt.gov.vn/

Entities required to register, declare, and pay taxes on the electronic information portal https://canhantmdt.gdt.gov.vn/ include:

- Business households and individuals on e-commerce platforms such as Shopee, Lazada, Tiki, etc.;

- Households and individuals providing goods and services on social networks like Facebook, Zalo, etc.;

- Households and individuals earning income from advertising activities on platforms such as Google, YouTube;

- Households and individuals providing software on application marketplaces like CH Play, Apple Store;

- Households and individuals earning income from doing business on other platforms.

Thus, from April 1, 2025, business households and individuals on e-commerce platforms, if not subject to withholding and tax payment on their behalf, are required to register, declare, and pay taxes on the electronic information portal at the address https://canhantmdt.gdt.gov.vn/

(3) Income from business over 200 million VND/year only to be subject to personal income tax from January 1, 2026

Based on Clause 1, Article 3 of the Personal Income Tax Law 2007, as amended by Clause 1, Article 2 of the Law Amending the Tax Laws 2014, the taxable income threshold from business subject to personal income tax is 100 million VND or more.

Moreover, in accordance with Article 17 of the Value Added Tax Law 2024, income from business subject to personal income tax in Clause 1, Article 3 of the Personal Income Tax Law 2007 is amended as follows:

- Income from business, including:

+ Income from production, business activities of goods, services;

+ Income from independent professional activities of individuals with licenses or professional certificates as prescribed by law.

The business income specified above does not include income of households, individuals engaged in production, business with revenue below the level prescribed in Clause 25, Article 5 of the Value Added Tax Law 2024 as 200 million VND/year.

Additionally, Article 18 of the Value Added Tax Law 2024 also clearly stipulates the revenue level of households, individuals involved in production, business activities not subject to tax under Clause 25, Article 5 and Article 17 of the Value Added Tax Law 2024 effective from January 1, 2026.

Thus, from January 1, 2026, individuals engaged in production and business activities with an annual revenue of over 200 million VND will be required to pay personal income tax.

What are amendments to personal income tax policies in Vietnam from January 1, 2025? (Image from the Internet)

Who is subject to personal income tax in Vietnam?

Based on Article 2 of the Personal Income Tax Law 2007, the subjects liable to personal income tax are as follows:

- Personal income taxpayers include resident individuals with taxable income arising both within and outside the territory of Vietnam, and non-resident individuals with taxable income arising within the territory of Vietnam.

- Resident individuals are those who meet one of the following conditions:

+ Present in Vietnam for 183 days or more in a calendar year or for 12 consecutive months from the first day present in Vietnam;

+ Have a regular place of residence in Vietnam, including a registered permanent residence or a rented house in Vietnam under a rental contract.

- Non-resident individuals are those who do not meet the conditions specified in Clause 2, Article 2 of the Personal Income Tax Law 2007.

When do individuals receive a personal income tax refund in Vietnam?

Based on Article 8 of the Personal Income Tax Law 2007, it is stipulated as follows:

Tax Management and Refund

1. Taxpayer registration, declaration, tax withholding, tax payment, tax finalization, tax refund, handling of tax law violations, and other tax management measures are performed in accordance with the provisions of tax management laws.

2. Individuals are entitled to tax refunds in the following cases:

a) The tax amount paid is greater than the payable tax amount;

b) The individual has paid tax but has assessable income not at the taxable level;

c) Other cases according to the decision of competent state authorities.

Therefore, individuals are entitled to personal income tax refunds in the following cases:

- The tax amount paid is greater than the payable tax amount;

- The individual has paid tax but has assessable income not reaching the taxable threshold;

- Other cases according to the decision of competent state authorities.