Vietnam: Update on tax treatment of e-commerce and digital transactions

Tax obligations of taxpayers with e-commerce and digital business operations and transactions

Taxpayers with e-commerce and digital business operations and transactions

The Ministry of Finance and the General Department of Taxation are in the process of finalizing draft guidance regarding tax obligations of taxpayers with e-commerce and digital business operations and transactions.

The proposed approach is to administer the rules through certain entities—including Vietnamese partners of overseas digital platform providers not having a permanent establishment in Vietnam and other withholding agents.

The draft circular would stipulate the obligations of the relevant entities in coordinating and providing information of persons engaged in e-commerce business (involving for instance commercial banks as well as the Ministry of Trade and Industry and the Ministry of Information and Communication).

With regard to the tax administration of e-commerce businesses, the tax authority issued Official Letter No. 1738/TCT-DNNCN (May 2021) requesting local tax authorities to implement the following measures:

  • Study and establish a tax administration plan for e-commerce and digital-based businesses
  • Communicate to the public via newspapers, radio, and public media about the obligation to declare and pay applicable taxes
  • Coordinate with provincial departments of trade and industry and information and communication to set up a “data room” of persons conducting e-commerce business, including information such as their names, addresses, tax codes, and bank accounts
  • Review the list of entities and individuals paying service fees to overseas entities related to e-commerce, or individuals receiving payments from overseas suppliers
  • Conduct tax audits and tax inspections of taxpayers providing delivery services for other entities engaged in e-commerce, especially agents that are authorized to collect “cash on delivery” (COD)

The local tax authorities are also requested to report information about the tax administration of persons engaged in e-commerce business activities with a goal of building a database of e-commerce businesses and then to apply a consistent, national approach.


Read a July 2021 report [PDF 111 KB] prepared by the KPMG member firm in Vietnam

 

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