E-commerc

Vietnam's regulation on tax management for online bizs raises concerns

14 Mar '25
2 min read
Vietnam's regulation on tax management for online bizs raises concerns
Pic: Adobe Stock

Insights

A new regulation in Vietnam on tax management for business activities conducted via e-commerce and digital platforms scheduled to take effect on April 1 has left businesses worried over the draft decree's timeline, according to the Vietnam Chamber of Commerce and Industry (VCCI).

It feels businesses need additional time to develop information technology systems, allocate human resources and educate sellers on compliance requirements.

The chamber has proposed postponing its enforcement to July 1.

Tax collection is necessary, but a well-structured tax framework that minimises administrative burdens and compliance costs for both businesses and individual sellers is needed, VCCI emphasised.

Additionally, the chamber stressed the need for clear definitions of responsibilities among stakeholders to ensure a smooth and efficient implementation of the new tax system, domestic media outlets reported.

The draft decree requires individuals conducting regular business on e-commerce and digital platforms will to declare taxes monthly, while household businesses must report their revenue, tax payable and business expenses.

This effectively removes the option of lump-sum tax payments for individual sellers, VCCI said.

VCCI said this approach would be impractical for small-scale sellers, as many lack the capital to invest in business management software and may struggle with complex tax declarations.

To address this, he proposed allowing lump-sum tax payments for individuals with a limited number of transactions, making compliance more feasible.

The decree mandates online sellers to declare business expenses, a requirement deemed unnecessary, as taxes are already calculated based on revenue.

Detailed reporting on costs such as inventory, labour, utilities, shipping and marketing would be unrealistic, the chamber noted.

Concerns have been also raised over the proposed decree’s definition of taxable revenue as the total amount paid by the buyer, which e-commerce platforms collect during transactions. This means that a seller’s revenue would be calculated based on the full payment made by the buyer.

VCCI suggested that the taxable revenue should instead be based on the amount the e-commerce platform intends to pay to the individual seller, rather than the total transaction value.

Fibre2Fashion News Desk (DS)