In adherence to their newly defined tax withholding and remittance obligations, major e-commerce platforms have announced the implementation of tax deductions on each completed transaction.
Specifically, a 1.5-percent deduction will be applied to merchandise revenue, and a 7-percent deduction to service revenue, remitted on behalf of the vendors. In cases where individual vendors have pre-emptively paid taxes, but their annual revenue remains below the taxable threshold, they may pursue a tax refund in accordance with established procedures.
This revised methodology is anticipated to augment tax revenues derived from e-commerce activities, while alleviating the compliance burden for over 725,000 online business households and individual entrepreneurs.
Concurrently, e-commerce platforms have disseminated notifications regarding the implementation of increased fixed fees (platform fees, commission fees) effective April 1, superimposed upon the mandated tax remittance.
For instance, TikTok Shop has escalated its commission rate to 4 percent, with a 7.7-percent fee applicable to vendors seeking "Shop Mall" certification. Similarly, Lazada has raised its fixed fees by approximately 4 percent. Shopee has disclosed fee adjustments across 243 product categories, with increases ranging from 9 percent to 10 percent. Notably, categories such as apparel, footwear, accessories, cosmetics, food, toys, stationery, and home décor will be subject to a standardized 10-percent fixed fee.
These platforms have attributed the increases to the necessity of maintaining and enhancing service quality, investing in technological infrastructure, logistics (supply chain) optimization, and marketing (brand promotion and development).
Online business households have expressed significant concern regarding the fee increases, which means diminished profitability. Le Van Tuyen from Tan Phu District of HCMC, a vendor specializing in stationery and footwear, articulated the financial strain imposed by the new fee structure, leading to a temporary halt of his online operations.
He emphasized the cumulative impact of fixed fees, payment processing fees, shipping costs, advertising expenditures, risk mitigation costs, operational expenses, and taxes, resulting in a marginal 2-3-percent profit margin only, rendering e-commerce platforms less attractive compared to traditional retail channels.
Online businesses have also cited worries regarding the instability of platform policies, including frequent fee adjustments and random account suspensions, which compound the challenges faced by small-scale vendors.
Despite the exponential growth of Vietnam’s e-commerce market, projected to reach US$25 billion in 2024 and $35 billion in 2025, tax revenue growth has not kept pace. Total e-commerce tax revenue in 2024 amounted to approximately VND116 trillion ($4.54 billion), with online business households and individuals contributing a disproportionately low VND2.5 trillion ($97.8 million).
Tax revenue leakage remains a prominent issue. Tax authority reports indicate that e-commerce tax revenue constitutes only 17.4 percent of total industry revenue, which is a decline from 20 percent in 2022.
This discrepancy is attributed to non-compliance among hundreds of thousands of individual vendors and business households. Recent investigations have revealed significant tax evasion, with HCMC tax authorities recovering and penalizing VND256.4 billion ($10 million) from over 4,000 online businesses in 2024. Some vendors have employed multiple personal accounts and dual accounting ledgers to conceal revenue exceeding hundreds of billions of VND.
A significant challenge is related to the identification of owners for approximately 300,000 e-commerce stores with estimated sales exceeding VND70 trillion ($2.74 billion), concentrated on major platforms such as Shopee, Lazada, Tiki, and Sendo.
This issue stems from the historical absence of stringent vendor identification requirements, with email addresses and store names sufficing for transaction purposes. Data from these platforms often lacks transaction value information or successful transaction counts, impeding vendor identification.
To address these challenges, tax authority officials have announced plans to collaborate with relevant ministries, agencies, and e-commerce platforms to review and update the database. To facilitate platform compliance with the new regulations, direct support will be provided.
“The tax authority will continue to collaborate with e-commerce platforms and banks to complete identification data, comprehensively address stores with unclear ownership information, and enhance the transparency as well as effectiveness of e-commerce tax management”, a tax authority official stated.
Director Tran Huu Linh of the Department of Domestic Market Management and Development (Ministry of Industry and Trade) clarified that payment fee adjustments on e-commerce platforms constitute a civil agreement between platforms and vendors.
According to this agreement, fee increases may necessitate prior notification. Platforms are obligated to disclose their service pricing calculation methods, enabling vendors to exercise their right to participate or not. Vendors may file complaints in accordance with regulations if they perceive fee increases as acts of unhealthy competition.
