Vietnam: Is selling homemade food via Facebook subject to tax payment?

According to Article 13 of Circular No. 47/2014/TT-BCT and Clause 2 Article 1 of Circular No. 21/2018/TT-BCT of the Ministry of Industry and Trade of Vietnam, registrants refer to traders or organizations having e-commerce websites providing at least one of the following services: E-commerce exchange services; Online promotion services; Online auction services. Apart from these subjects, e-commerce business activities (online business) are not required to be registered.

Concurrently, according to Clause 1 Article 3 of Decree No. 39/2007/NĐ-CP of Vietnam’s Government, individuals doing trade mean individuals who everyday themselves conduct one, several or all activities allowed by law on goods purchase and sale, service provision and other activities with purpose of profitability but do not register their business as prescribed by law on business registration and not be called as “trader” as prescribed by the Commercial Law of Vietnam. Particularly including individuals doing the following trade activities:

- Street trading (trading in public places) means activities of purchase and sale without a fixed location (purchase on street, sale on street or both purchase and sale on street), includes even the receipt of books, news, magazines, cultural products of traders allowed doing business in these products as prescribed by law, for sale on street;

- Petty trading means purchase and sale of small and odd items with or without a fixed location;

- Petty-food trading means sale of fruits, cakes, candies, drinks (beverage) with or without a fixed locations;

- The consignment trading means purchase of goods from other places according to each consignment to sell for wholesalers or retailers;

- Providing services: Polishing shoes, selling lottery tickets, repairing key, repairing vehicles, safekeeping for vehicles, washing for vehicles, barber, painting, taking photo and other services with or without fixed locations;

- Other commercial activities done independently and regularly do not have to register for business.

Based on the above-mentioned provisions, the business of items such as shredded chicken, fish sauce, fried rice etc. will not have to register or apply for a license from any agency. However, these people need to comply with food safety regulations as well as other relevant regulations so as not to infringe on the interests of consumers.

Tax payment obligation: According to Article 1 of Circular No. 92/2015/TT-BTC of the Ministry of Finance of Vietnam, taxpayers are residents including individuals, groups of individuals, and households who manufacture and/or trade in goods, services in any field and sector prescribed by law, not including businesspeople whose revenues are VND 100 million/year or lower.

Thus, in this case, it can be seen that the individual has a direct business or an online business, specifically via facebook whose revenues are over VND 100 million/year must declare and pay VAT and PIT in accordance with law.

Payable tax: According to Appendix 01 enclosed with Circular No. 92/2015/TT-BTC, VAT, PIT and tax rates are specified as follows:

- Wholesaling, retailing of goods (except for value of goods sold by agents for commissions): VAT rate is 1%, PIT rate is 0.5%.

- Other business activities: VAT rate is 2%, PIT rate is 1%.

- Nguyen Trinh -

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