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Vietnam: Taxation of e-commerce transactions, implications for banks

Vietnam: Taxation of e-commerce transactions

New tax administration law in Vietnam may affect many non-resident enterprises selling goods and services into Vietnam via digital and e-commerce business models. The law will also affect the banks and the financial sector because it will be the duty of banks and the financial sector to identify transactions subject to tax and to collect the tax.


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These new rules are effective 1 July 2020.

The new law aims to regulate and tax e-commerce transactions and to close the tax gap on supplies of goods and services to individuals located in Vietnam by non-resident enterprises (referred to as B2C transactions). An element of the new rules is that they are intended to apply only to certain specified payments arising from e-commerce transactions. Banks and financial institutions, therefore, will need to be able to identify which transactions are subject to the new rules, and then impose a withholding tax on the transactions and report and remit the proceeds to the relevant tax authorities.

Commercial banks will be responsible for the collection of tax on behalf of foreign enterprises conducting e-commerce activities in Vietnam.

A non-resident enterprise that supplies goods and services and that does not have a permanent establishment in Vietnam will be required to register, declare and pay tax in Vietnam or authorize other parties to do these tasks on its behalf.

Read a July 2019 report [PDF 98 KB] prepared by the KPMG member firm in Vietnam

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