What are regulations on the operation of organizations managing e-commerce exchanges in Vietnam from July 1, 2025?

What are regulations on the operation of organizations managing e-commerce exchanges in Vietnam from July 1, 2025?

Pursuant to Clause 5, Article 4 of the Law on Value-Added Tax 2024, the provisions are as follows:

Taxpayer

1. Organizations, households, individuals producing and trading goods, services subject to value added tax (hereinafter referred to as business establishments).

2. Organizations, individuals importing goods subject to value added tax (hereinafter referred to as importers).

3. Organizations, individuals producing, doing business in Vietnam, purchasing services (including services attached to goods) from foreign organizations without a permanent establishment in Vietnam, individuals abroad not residing in Vietnam, except in cases prescribed in Clauses 4 and 5 of this Article; organizations conducting oil and gas exploration and development in Vietnam purchasing goods, services from foreign organizations without a permanent establishment, individuals abroad not residing in Vietnam.

4. Foreign suppliers without a permanent establishment in Vietnam engaging in e-commerce, digital platform-based business with organizations, individuals in Vietnam (hereinafter referred to as foreign suppliers); foreign digital platform managers making tax deductions, replacing tax liabilities of foreign providers; business organizations in Vietnam apply the method of calculating value added tax by credit method purchasing services from foreign suppliers without a permanent establishment in Vietnam through e-commerce channels or digital platforms make deductions, replacing tax liabilities of foreign suppliers.

5. Organizations managing e-commerce exchanges, digital platform managers with payment functions perform deductions, pay taxes on behalf, declare deducted tax amounts for business households, business individuals on e-commerce platforms, digital platforms.

6. the Government of Vietnam stipulates the details of Clauses 1, 4, and 5 of this Article; regulates taxpayers in cases where foreign suppliers provide services to buyers as business organizations in Vietnam applying the tax deduction method stipulated in Clause 4 of this Article.

Thus, based on the above regulation, from July 1, 2025, the effective date of the Law on Value-Added Tax 2024, organizations managing e-commerce exchanges will perform payment functions to make deductions, pay taxes on behalf, and declare deducted tax amounts for business households, business individuals on e-commerce platforms, digital platforms.

What are regulations on the operation of organizations managing e-commerce exchanges in Vietnam from July 1, 2025? (Image from the Internet)

When is the time to determine value added tax for services in Vietnam from July 1, 2025?

According to Article 8 of the Law on Value-Added Tax 2024, the provisions are as follows:

Time to determine value added tax

1. The time to determine value added tax is stipulated as follows:

a) For goods, the time is when the ownership or use right over goods is transferred to buyers or when the invoice is issued, regardless of whether payment has been received;

b) For services, the time is when the provision of services is completed or when the invoice is issued, regardless of whether payment has been received.

2. The time to determine value added tax for the following goods, services is regulated by the Government of Vietnam:

a) Exported goods, imported goods;

b) Telecommunication services;

c) Insurance business services;

d) Electricity supply activities, electricity production, clean water;

đ) Real estate business activities;

e) Construction, installation activities and oil and gas activities.

Thus, the time to determine value added tax for services from July 1, 2025, is the time when the provision of services is completed or when the invoice for service provision is issued, regardless of whether payment has been received.

Which goods and services apply for 0% VAT rate in 2024?

Pursuant to Clause 1, Article 9 of the Law on Value-Added Tax 2024, a 0% tax rate applies to the following goods, services:

- Exported goods include: goods from Vietnam sold to organizations, individuals overseas and consumed outside Vietnam; goods from Vietnam’s domestic market sold to organizations in non-tariff zones and consumed in non-tariff zones directly serving export production activities; goods sold in isolated areas to individuals (foreigners or Vietnamese nationals) who have completed exit procedures; goods sold in duty-free shops;

- Exported services include: services provided directly to organizations, individuals overseas and consumed outside Vietnam; services provided directly to organizations in non-tariff zones and consumed within non-tariff zones directly serving export production activities;

- Other exported goods, services include: international transport; leasing transport vehicles for use outside Vietnam’s territory; aviation, maritime services provided directly or through agents for international transport; construction, installation works abroad or in non-tariff zones; digital content products provided to foreign parties and documented to prove consumption outside Vietnam according to the Vietnamese Government; spare parts, materials for repairing, maintaining machinery and equipment for foreign parties and consumed outside Vietnam; outsourced goods for export as stipulated by law; goods, services not subject to value-added tax upon export, except cases not applying a 0% tax rate as stipulated in point d of this provision;

- Cases not applying the 0% tax rate include: technology transfer, intellectual property rights transfer abroad; reinsurance services abroad; credit granting services; capital transfer; derivatives; postal, telecommunication services; export products stipulated in Clause 23, Article 5 of the Law on Value-Added Tax 2024; tobacco, alcohol, beer imported then exported; gasoline, oil sold domestically to businesses in non-tariff zones; cars sold to organizations, individuals in non-tariff zones.

*Note: Law on Value-Added Tax 2024 will take effect from July 1, 2025.