On 9/6/2024, the Government issued Decree 117/2024, specifying tax obligations for e-commerce activities. The main content includes three key points: tax withholding and remittance, tax refunds, and the responsibilities of individuals and household businesses.
E-commerce platforms must withhold and remit taxes.
E-commerce platform operators (both domestic and foreign) are required to withhold and remit value-added tax (VAT) and personal income tax (PIT) for households and individuals conducting business in Vietnam. If the nature of the transaction (goods or services) cannot be determined, the highest tax rate must be applied.
Tax withholding table for individuals and household businesses on e-commerce platforms
| Transaction type | VAT | PIT | Total withholding rate |
| Sale of goods (e.g., clothing, household appliances, etc.) | 1% | 0.5% | 1.5% |
| Provision of services (e.g., consulting, design, advertising, marketing, etc.) | 5% | 2% | 7% |
| Transactions with undefined type | 5% | 2% | 7% |
Taxes are withheld for each successful transaction. Platforms must declare and pay taxes monthly. For canceled or returned transactions, the withheld tax amount will be offset against other transactions within the same reporting period.
Individuals and household businesses are eligible for tax refunds.
Sellers on e-commerce platforms are eligible for a tax refund if their total annual revenue is below the taxable threshold (currently 100 million VND per year). The condition is that the platform has completed the declaration and fully paid the withheld taxes.
In cases where individuals or household businesses self-declare and pay taxes during the year, but their total revenue remains below the taxable threshold, they can also apply for a tax refund according to regulations.
For example, an individual selling handicrafts with a monthly revenue of 10 million VND will have 1.5% tax withheld (equivalent to 1.8 million VND annually). If their total annual revenue is only 90 million VND, they can request a tax refund.
Individuals and household businesses must fully declare information and other tax obligations.
Decree 117 also stipulates the direct responsibilities of online businesses. They must declare and pay other applicable taxes, such as excise tax, natural resources tax, and environmental protection tax, in accordance with the law.
In addition, sellers must provide their complete and accurate tax code or personal identification number (for Vietnamese citizens) or passport (for foreigners), along with other mandatory information as regulated for e-commerce.
For transactions where the platform has already withheld and remitted taxes, individuals and household businesses do not need to declare and pay VAT and PIT again.
Hai My
