What is the Draft Decree on tax administration for e-commerce activities on digital platform of household and individual businesses in Vietnam?

What is the Draft Decree on tax administration for e-commerce activities on digital platform of household and individual businesses in Vietnam?

On February 4, 2025, the draft decree stipulating tax administration for business activities on e-commerce platforms and digital platforms of household businesses and individual businesses was announced.

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Draft Decree on tax administration for e-commerce activities on digital platform of household and individual businesses...Download

Draft Samples of the Decree on tax administration for Business Activities on E-commerce Platforms and Digital Platforms of household and individual businesses...Download

Submission on the Draft Decree on tax administration for Business Activities on E-commerce Platforms and Digital Platforms of household and individual businesses...Download

The Ministry of Finance is currently seeking feedback on the draft decree regulating tax administration for business activities on e-commerce platforms and digital platforms of household businesses and individual businesses.

The Ministry of Finance stated that the formulation of the decree aims to enhance the effectiveness of state budget revenue collection from business activities on e-commerce platforms, digital platforms, and other digital economy activities; to create a transparent and fair business environment between traditional business forms and e-commerce businesses, and businesses on digital platforms.

At the same time, it ensures that households and individuals conducting business on e-commerce platforms and digital platforms fulfill their full tax obligations like other businesses; increases the responsibility of intermediary organizations, organizations managing e-commerce platforms, and digital platforms in assisting tax authorities in tax collection management. Additionally, it leverages the data and technology of organizations managing e-commerce platforms and digital platforms to monitor online transactions; facilitates households and individual businesses in reducing administrative procedures, makes it easier to meet tax obligations, encourages voluntary tax compliance by household and individual businesses; prevents tax evasion when doing business on e-commerce platforms and digital platforms...

What is the Draft Decree on tax administration for e-commerce activities on digital platform of household and individual businesses in Vietnam? (Image from Internet)

According to the draft, who are the subjects of the Decree on tax administration for e-commerce activities on digital platform of household and individual businesses in Vietnam?

According to Article 2 of the Draft Decree on tax administration for e-commerce activities on digital platform of household and individual businesses...Download, it stipulates the applicable subjects as follows:

- Resident individuals and non-resident individuals conducting business on e-commerce platforms, digital platforms, and other digital economy activities (hereinafter referred to as e-commerce platforms);

- Organizations that are managers of e-commerce trading floors, organizations that manage digital platforms with payment functions, and organizations with other digital economy activities (hereinafter referred to as platform management organizations subject to withholding and tax payment replacement);

- E-commerce trading floors, digital platforms with payment functions as defined in this clause are platforms established for buyers to make direct payments on the floor through electronic wallets, bank cards, or integrated transfer systems, cash payment upon delivery (Cash On Delivery).

- Organizations with other digital economy activities specified in clauses 1 and 2 of this Article are organizations participating in business cooperation for goods, service provision with households, and individuals conducting business or supporting household businesses, individual businesses in implementing service transactions through digital environments including: intermediary platform service connection organizations; digital content supply platform organizations; online advertising organizations; hosting service providers, cloud computing; social network platforms with business activities; online learning service providers; online gaming platform organizations and digital entertainment services; organizations in Vietnam that are partners of foreign digital platform providers paying income from digital content products and services to individuals under agreements with foreign digital platform providers, intermediary payment service providers.

- E-commerce platforms and digital platforms without payment functions (hereinafter referred to as e-commerce platforms not subject to withholding and tax payment replacement).

- Tax authorities and related organizations, and individuals.

What are regulations on withholding and tax payment replacement according to the Decree on tax administration for e-commerce activities on digital platform of household and individual businesses in Vietnam?

According to Article 3 of the Draft Decree on tax administration for e-commerce activities on digital platform of household and individual businesses...Download, it regulates withholding and tax payment replacement as follows:

- E-commerce platform management organizations, both domestic and international, subject to withholding and tax payment replacement (including direct platform owners managing e-commerce platforms or authorized platform managers) to withhold and pay the value-added tax according to the law on value-added tax for each supply of goods and service transaction generating domestic revenue for households and resident individuals conducting business on e-commerce platforms, and withhold and pay personal income tax for each supply of goods, service transaction generating both domestic and international revenue for households and resident individuals conducting business on e-commerce platforms.

- E-commerce platform management organizations, both domestic and international, subject to withholding and tax payment replacement (including direct platform owners managing e-commerce platforms or authorized platform managers) to withhold and pay the value-added tax according to the law on value-added tax for each service transaction generating domestic revenue for non-resident individuals conducting business on e-commerce platforms, and withhold and pay personal income tax according to the law on personal income tax for each goods, service transaction generating domestic revenue for non-resident individuals conducting business on e-commerce platforms.