In 2023, Vietnam experienced rapid growth in e-commerce with a staggering 25 percent increase. This impressive growth positioned Vietnam among the top 10 countries globally in terms of e-commerce development. As a result, tax management in this sector requires adjustments to keep pace with the evolving landscape.
In the first six months of 2024, the Ho Chi Minh City Tax Department requested explanations from seven individuals engaged in e-commerce businesses. As a result, one key opinion leader (KOL) submitted his income tax return for 2022, including both salary and wages. The total amount of overdue taxes and late payments was VND2.2 billion. Additionally, this person declared income from social media channels, with a total of VND36.5 million in taxes owed.
Meanwhile in Hanoi, during the first three months of this year, tax authorities also announced the collection of taxes from 41 individuals with income from e-commerce activities. Among them, one individual declared a tax amount and was late in paying up to VND8.5 billion.
According to tax statistics, the tax revenue from organizations and individuals engaged in e-commerce activities has been increasing rapidly in recent years. Specifically, in 2022, it was VND83,000 billion while in 2023, it reached VND97,000 billion. In the first six months of 2024 alone, it exceeded VND50,000 billion.
Additionally, the General Department of Taxation, in collaboration with the Ministry of Industry and Trade, the Ministry of Information and Communications, and commercial banks, collected information on 929 e-commerce trading platforms, 284 online sales applications, 144 million payment accounts of organizations and individuals, and 130 organizations operating in the fields of telecommunications, advertising, broadcasting, television, and tax-related database enrichment.
According to the General Department of Taxation’s data, as of June 2024, there were 383 e-commerce trading platforms nationwide, an increase of 22 platforms compared to the end of 2023. Recently, the General Department of Taxation issued a directive to enhance tax management for e-commerce activities.
This directive requires tax authorities in provinces and cities to strengthen awareness campaigns, conduct inspections of e-commerce businesses operating on digital platforms, and enhance compliance monitoring for organizations and individuals involved in selling goods and receiving commissions from advertising during livestream sales.
If inspectors detect any tax law violations, tax authorities will compile lists of violators. Tax authorities will later work with local departments and agencies to conduct inspections and enforce tax and specialized legal regulations, or transfer cases to law enforcement agencies if tax evasion is confirmed.
The General Department of Taxation announced to send a guiding book on tax registration, declaration, and payment to organizations and individuals engaged in e-commerce activities. They have also shared a list of email contacts for tax authorities to facilitate proactive communication when encountering difficulties. A leader of the Small and Medium Enterprise Tax Management Division under the General Department of Taxation has announced plans for inspections and audits of taxpayers involved in e-commerce and digital platform businesses, including livestream sales.
According to the 2023 E-commerce White Book, the number of Vietnamese consumers participating in online shopping increased by approximately 61 million people, representing a growth of over 7 percent compared to the previous year. The estimated annual online shopping value per person reached US$336, reflecting a more than 16 percent increase.
Statistically, over 90,000 businesses and individuals have engaged in e-commerce on online platforms in Ho Chi Minh City alone, including nearly 65,000 individuals and household businesses, as well as more than 25,000 enterprises for the first six months of 2024. Despite efforts against tax evasion by the tax sector, the issue remains an ongoing challenge in e-commerce activities.
According to Head Nguyen Thi Lan Anh of the Small and Medium Enterprise Tax Management Department, many organizations and individuals conducting livestream sales are still unwilling to fulfill their obligations of declaration, registration, and timely tax payment. Meanwhile, according to the Vietnam E-Commerce Association, there are an average of 2.5 million livestream-selling sessions per month, with the participation of over 50,000 sellers.
Additionally, the exemption from tax for goods valued below VND1 million sent via express delivery services and cross-border logistics is considered a significant loophole leading to tax revenue losses. With the explosive growth of e-commerce platforms, which handle approximately 2 billion orders annually, experts estimate that the value-added tax of 10 percent lost per order amounts to over $2 billion.
According to Deputy Director Mai Son of the Tax Department, in the final months of 2024, the tax sector will implement various measures, including strengthening coordination among relevant ministries to address violations and tighten management in the online environment, targeting organizations and individuals who do not adhere to tax laws in e-commerce operations.
Currently, there have been many online salespersons without tax registration or business registration. Individuals who engage in such sales are required to pay personal income tax ranging from 5 percent to 35 percent, depending on their annual income. Failure to comply may result in penalties and collection of arrears from previous years.
On the other hand, if a person registers business and pays taxes through proper declaration methods, adhering to invoice, documentation, and accounting regulations, the tax obligation based on revenue is only 1.5 percent including 1 percent value-added tax and 0.5 percent personal income tax for distribution and supply of goods. For other service-related activities, the tax rate is 5 percent.
