Vietnam reviews Personal Income Tax from e-commerce
The General Department of Taxation will strictly handle organizations and individuals that have Personal Income Tax arising from e-commerce business activities but do not fully fulfill tax obligations, or have not registered, declared, and paid taxes in accordance with regulations.
1. Notice on Implementing Directive No. 18/CT-TTg for E-commerce Businesses
Department of Taxation has just sent a notice to organizations and individuals engaged in the business of selling goods, providing services on digital platforms, and doing e-commerce business about the implementation of Directive No. 18/CT-TTg dated May 30, 2023 of the Prime Minister on promoting connection and data sharing to serve the development of e-commerce, prevent tax loss, and ensure monetary security.
To date, the department has identified various e-commerce business methods across different groups:
- Organizations and individuals earning income from posting products and digital content on foreign platforms.
- Organizations and individuals selling online.
- Organizations and individuals providing accommodation services via online booking applications (e.g., Booking, Agoda).
- Owners of e-commerce platforms (e.g., Shopee, Lazada, Sendo, Tiki).
- Foreign suppliers.
Taxes revenue from online shopping in Vietnam
2. Inspection and Compliance Efforts
Currently, the General Department of Taxation is promoting inspection of organizations and individuals with income arising from e-commerce business activities according to risk management methods.
From management practice, the tax department developed a set of 9 risk criteria, which when implemented, helped detect 788 businesses with high tax risks. Through inspection and review, many organizations and individuals with e-commerce business proactively registered, declared, and paid taxes according to the provisions of law.
Right in the first quarter of 2024, the city tax department sent a notice explaining documents to 41 individuals with income from e-commerce. According to initial results, there are 28 individuals paying 9.8 billion VND in taxes; An individual declared an estimated tax and late payment interest of 8.5 billion VND.
Tax law stipulates that in cases where business households or individuals have business activities, regardless of whether they have business registration or not, and are not eligible for tax exemption, they will have to pay tax according to the provisions of law such as: value added tax, personal income tax, license fees.
Regulations in Article 33 of the Law on Tax Administration No. 38 clearly state that business individuals must register for tax within 10 working days from the date of starting business operations. However, in reality, many individuals doing business on e-commerce platforms and online businesses have not registered for taxes. There are still cases of non-compliance with tax laws.
Therefore, to avoid violations of tax laws, the General Department of Taxation requests that organizations and individuals with income arising from e-commerce business activities are responsible for registering, declaring, and paying taxes in accordance with regulations.
Taxation of e-commerce in Vietnam – What you need to know
>>>Read more: Things You Must Know About Foreign Contractor Tax
3. Ongoing Surveillance and Collaboration
Based on the assessment of the results achieved, this agency is continuing to carry out surprise inspections of 19 businesses with e-commerce activities and 141 individual owners related to 141 businesses with e-commerce activities. The City Tax Department will also regularly check and monitor invoice data and actual business situation to put 6,510 individuals and business households with e-commerce activities under surveillance.
“Taxpayers are responsible before the law for the accuracy, truthfulness, and completeness of tax records according to the provisions of Article 17 of the Law on Tax Administration. The Vietnam Tax Department will strictly handle these cases.” Failure to perform or incomplete implementation of tax obligations in accordance with the provisions of law”, document of General Department of Taxation stated.
According to the above, taxpayers can contact the functional departments of the tax department or tax branch where they do business for guidance and answers. The General Department of Taxation will create the best conditions for organizations and individuals to well implement tax law policies.
Recently, the General Department of Taxation just had a meeting with representatives of Shopee Co. Ltd., one of the largest e-commerce platforms in Vietnam, to request the company to provide data in accordance with Decree No. 91/2022/ND-CP dated October 30, 2022 of the Government to implement a number of articles of the Law on Tax Administration.
The Tax Department of Vietnam has been connecting, collecting information, linking data with relevant units and organizations and building a database of information of organizations and individuals that generate revenue. Imports from e-commerce business activities are subject to tax registration, tax declaration, and tax payment according to the provisions of Vietnamese tax law. Therefore, if the reader has any concerns regarding the Personal Income Tax, please contact S4B for great support.
S4B Vietnam
- Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Vietnam
- Tel: + 84 24 3974 4181
- Email: service@s4b.com.vn
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