Vietnam: Implementing decree requiring e-commerce platforms and digital platforms to withhold tax on individual sales

17 Jun 2025    3 minute read

In brief

On 9 June 2025, the government issued Decree No. 117/2025/ND-CP, which requires e-commerce or digital platforms with payment functions to withhold tax for individual sellers. The decree will take effect on 1 July 2025.

Contents

Key takeaways

  • Withholding should start on 1 July 2025, unless there is further guidance from the government.
  • In-scope platforms include both foreign and domestic platforms with payment functions.
  • The applicable tax rates vary for residents and nonresidents, and in-scope platforms will determine residency based on information collected from sellers.
  • Deductions related to canceled or return transactions are allowed.

In more detail

  1. Who needs to withhold taxes?
  • Both domestic and foreign organizations that manage e-commerce platforms or digital platforms with payment functions will need to withhold taxes.
  • Organizations subject to withholding also include other local organizations involved in digital economic activities that facilitate income payments to individuals/households on behalf of foreign e-commerce platforms or digital platforms.
  1. Whose taxes need to be withheld?
  • The taxes of resident individuals and households and nonresident individuals that do business on e-commerce platforms or digital platforms need to be withheld. Residency status is determined in accordance with the personal income tax (PIT) regulations.
  1. In-scope taxes
  • Value-added tax (VAT) and PIT are in-scope.
  • VAT applies to revenues generated inside Vietnam, while PIT applies to revenues generated both locally and internationally for resident individuals and revenues generated in Vietnam for nonresident individuals.
  1. When to withhold
  • Tax withholding must occur immediately once a transaction involving goods or services on an in-scope platform is successfully confirmed and the payment accepted.
  1. How much to withhold

The amounts of withholding tax are determined as a percentage of the revenue from each transaction.

  • VAT rates are as follows:
    • Goods: 1%
    • Services: 5%
    • Transport and services linked to goods: 3%
  • PIT rates (for resident individuals) are as follows:
    • Goods: 0.5%
    • Services: 2%
    • Transport and services linked to goods: 1.5%
  • PIT rates (for nonresident individuals) are as follows:
    • Goods: 1%
    • Services: 5%
    • Transport and services linked to goods: 2%
  1. The revenues subject to tax withholding are the amounts that an individual or household earns from the sale of goods or services, collected by in-scope platforms.
  2. Tax declaration and payment procedures
  • Monthly declaration: E-commerce platform management organizations must declare the withheld taxes monthly.
  • Adjustments for cancellations/returns: The withheld taxes of canceled transactions or returned goods can be offset against future withholding tax obligations.
  • The following tax codes will be issued:
    • Domestic organizations will be issued a separate 10-digit tax code for declaring and paying withheld taxes.
    • Foreign organizations will be issued a 10-digit tax code for their tax obligations in Vietnam, similar to the existing regulations for foreign suppliers under Circular No. 80/2021/TT-BTC.
  • Electronic filing: Tax declarations must be submitted electronically.
  1. Other responsibilities of foreign e-commerce or digital platforms
  • Withholding certificates: These platforms must issue annual electronic tax withholding certificates to individuals and households.
  • Data management: These platforms must manage account names and passwords issued by tax authorities, and retain transaction data, information and documents related to tax determination.
  • Information provision: These platforms must provide other business information as requested by tax authorities according to the laws on tax administration.
  • Refunds for cancellations: These platforms must promptly refund any overwithheld taxes to individuals/households for canceled transactions or returned goods.
  1. Responsibilities of business individuals and households
  • Vietnamese citizens must provide platforms with a tax code or personal identification number.
  • Foreign citizens must provide platforms with passport numbers or other identification information issued by competent foreign authorities.
  • Individuals and households doing business on e-commerce platforms or digital platforms must provide in-scope platform with accurate, complete and timely information and documents related to the determination of their tax obligations.
  • In-scope platforms must declare and pay the withheld taxes monthly.
Contact Information
Thanh Vinh Nguyen
Partner at BakerMcKenzie
Ho Chi Minh City
thanhvinh.nguyen@bmvn.com.vn
Thanh Hoa Dao
Special Counsel
Ho Chi Minh City
Read my Bio
thanhhoa.dao@bakermckenzie.com

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