Attention! Vietnam will impose taxes on overseas e-commerce sellers

Vietnam’s Ministry of Finance recently said that Law No. 38/2019/QH14 on Tax Management stipulates that overseas suppliers who do not have physical stores in Vietnam but provide e-commerce and digital-based businesses and other services must directly or authorize others to register for taxes , declare customs and make payments in Vietnam .

Currently, the Ministry of Finance of Vietnam is preparing a notice to provide detailed instructions on the regulation and will solicit public opinions in the near future.

Vietnam’s Ministry of Finance also said that overseas suppliers on e-commerce and digital platforms are new tax subjects that require detailed regulations for effective taxation.

According to the draft, overseas suppliers are required to register for online tax transactions through the State Administration of Taxation's electronic portal. Overseas suppliers can register multiple bank accounts to pay taxes online.

After the seller successfully registers for tax for the first time, overseas suppliers will be provided with a username and password to declare and pay taxes on the department's electronic portal .

E-commerce in Vietnam has flourished in recent years, especially during the 2020 pandemic .

Dang Ngoc Minh, deputy director-general of Vietnam's Ministry of Finance , said many new tax regulations that will take effect this year are expected to prevent companies from evading and avoiding taxes, especially in e-commerce and digital-based businesses.

A report from the Ministry of Industry and Trade showed that by 2020, 53% of Vietnam's population shopping online helped e-commerce grow by 18% to a market of US$11.8 billion , while e-commerce revenue was estimated to account for 5.5% of total retail sales of goods and services .

In addition to imposing taxes on sellers, the Vietnamese government has recently improved relevant regulations to regulate e-commerce, with a focus on preventing trade fraud.

It is understood that Vietnam's working group responsible for combating smuggling and counterfeit products in e-commerce was established at the beginning of last year.

It is also predicted that in the next three years, trade fraud on e-commerce platforms will account for 50%-60% of all trade fraud . Vietnam has established this working group in the hope of adjusting the legal framework to better manage operations in e-commerce and prevent fraud.

The new decree will create a level playing field for e-commerce and traditional trade through regulations that regulate the duties of e-commerce platform operators. Related services such as e-payments , e-wallets and shipping, which are factors that have enabled the boom in e-commerce, should also be regulated.

Cross-border e-commerce market

Southeast Asia