The recent surge in e-commerce has significantly contributed to the growth of tax revenue from such activities in Vietnam. In the initial seven months of 2024, the revenue exceeded VND78 trillion (US$3 billion). Projections indicate that for the first time, tax revenue from e-commerce is expected to reach VND100 trillion this year.
Tax collection on e-commerce platforms is currently governed by Decree 91/2022, which amends and supplements certain provisions of Decree 126/2020 issued by the Government, detailing aspects of the Law on Tax Administration. Under this framework, the e-commerce platform owner is obligated to furnish the tax authority with comprehensive, accurate, and timely information regarding traders, organizations, and individuals engaged in the buying and selling of goods and services on the platform.
This required information encompasses the seller's name, tax identification number, personal identification number, citizen identification number, passport details, address, contact telephone number, and sales revenue, among other data.
The submission of this information must occur on a quarterly basis, with a deadline set for the last day of the first month of the subsequent quarter and is to be conducted electronically through the Electronic Information Portal of the General Department of Taxation.
Business entities generating an annual income of VND100 million or more are mandated by regulations to remit value added tax and personal income tax. For individuals engaged in the wholesale and retail of various goods—excluding the value of goods sold by agents at the designated price for commission—the applicable tax rate is set at 1.5 percent of total revenue. This rate comprises a 1 percent value added tax and a 0.5 percent personal income tax.
In the proposed amendments to the Law on Tax Administration, the Ministry of Finance has suggested that e-commerce platforms assume the responsibility of declaring and remitting taxes on behalf of the sellers utilizing their services. While this proposal has elicited a range of conflicting opinions, insights from the World Bank and OECD indicate that such a measure could effectively enhance the management of taxes related to e-commerce.
The recent surge of the e-commerce platform Temu in Vietnam, where it has seen significant sales over the past month despite lacking the necessary operating license, highlights serious gaps in regulatory oversight and potential tax revenue losses. Experts are calling for stricter enforcement of tax compliance for platforms like Temu and advocate for the elimination of tax exemption policies for small retail items. Specifically, under Decision 78/2010, the government permits imported goods valued at less than VND1 million, shipped via express delivery, to be exempt from both import tax and input VAT during the import phase.
Chairman Le Quang Manh pointed out that, in reviewing the amended draft Law on Value Added Tax, the surge in cross-border e-commerce has led to a significant rise in the number of small-value transactions across borders. He cited data from Vietnam Posts and Telecommunications Corporation (VNPT) saying that in March 2023, an average of 4-5 million orders were shipped from China to Vietnam every day, with the value of each order divided into VND100,000-VND300,000.
Every day, platforms like Shopee, Lazada, and TikTok see goods valued at approximately US$45 million-US$63 million, accumulating to about US$1.3 billion-US$1.9 billion each month. Experts argue that the current exemption from value-added tax for small-value imported goods should be removed. This change would help safeguard revenue sources and foster a fairer competitive landscape between domestic producers and imported products.
