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The Ministry of Finance and the General Department of Taxation are in the process of finalizing draft guidance regarding tax obligations of taxpayers with e-commerce and digital business operations and transactions.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
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.