Regulations on tax management for households and individuals doing business on e-commerce platforms

According to the Decree, organizations managing domestic and foreign e-commerce platforms that are subject to deduction and payment of tax on behalf of others (including owners directly managing e-commerce platforms or persons authorized to manage e-commerce platforms) shall deduct and pay tax on behalf of others the value added tax payable in accordance with the provisions of the law on value added tax for each transaction of providing goods and services generating revenue domestically by households and individuals conducting business on e-commerce platforms.

Organizations managing domestic and foreign e-commerce platforms that are subject to withholding and paying taxes on behalf of (including owners directly managing e-commerce platforms or persons authorized to manage e-commerce platforms) shall deduct and pay taxes on behalf of residents the personal income tax payable in accordance with the provisions of the law on personal income tax for each transaction of providing goods and services generating domestic and foreign revenue of residents conducting business on e-commerce platforms; shall deduct and pay taxes on behalf of non-residents the personal income tax payable in accordance with the provisions of the law on personal income tax for each transaction of providing goods and services generating domestic revenue of non-residents conducting business on e-commerce platforms.

Time of deduction, determination of tax amount to be deducted

Regarding the time of deduction, the Decree stipulates: The organization managing the e-commerce platform shall deduct the value added tax and personal income tax payable for each transaction of providing goods and services generating revenue on the e-commerce platform under its management scope immediately upon confirming the successful transaction and accepting payment for the transaction of selling goods and services on the e-commerce platform to households and individuals.

The amount of value added tax and personal income tax that must be deducted is determined as a percentage (%) of the revenue of each transaction of selling goods and providing services.

The percentage of value added tax is implemented according to the provisions of the Law on Value Added Tax as follows: Goods: 1%; services: 5%; transportation and services associated with goods: 3%.

The personal income tax rate is implemented according to the provisions of the Personal Income Tax Law as follows:

- For resident individuals: Goods: 0.5%; services: 2%; transportation, services associated with goods: 1.5%.

- For non-resident individuals: Goods: 1%; services: 5%; transportation, services associated with goods: 2%.

In case the organizations managing e-commerce platforms subject to deduction and payment cannot determine whether the transaction generating revenue from the e-commerce platform is goods or services or type of service, the determination of the tax amount to be deducted shall be implemented according to the highest percentage rate prescribed in Point a of this Clause and according to the highest percentage rate of the service prescribed for resident individuals or non-resident individuals prescribed in Point b, Clause 1, Article 5 of this Decree.

Revenue from each transaction of selling goods and providing services is the amount of money from selling goods and services that the household or individual receives and that the organization managing the e-commerce platform collects on their behalf.

How to declare and pay deducted tax

Organizations managing e-commerce platforms declare the amount of tax deducted monthly.

For canceled or returned transactions, the organization managing the e-commerce platform shall offset the deducted or paid tax of the canceled or returned transaction with the deducted or paid tax of the sales of goods and provision of services.

The amount of tax paid on behalf of the organization managing the e-commerce platform is determined by the total tax of the transactions selling goods and providing services after offsetting with the total tax of the canceled or returned transactions of households and individuals (if any).

Organizations managing domestic e-commerce platforms are assigned a separate tax code (10-digit tax code) by the tax authority system to declare and pay deducted taxes on behalf of the organization and do not have to submit tax registration documents.

Organizations managing e-commerce platforms abroad are granted 10-digit tax codes to perform tax obligations arising in Vietnam (if any) as prescribed for foreign suppliers in Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Minister of Finance and are allowed to use this tax code to declare and pay the deducted tax of households and individuals residing and doing business on e-commerce platforms abroad.

Responsibilities of the organization managing the e-commerce platform subject to deduction and payment of tax on behalf of

Register to use and process tax deduction documents for business activities on e-commerce platforms according to the provisions of law on invoices and documents.

Issue tax deduction certificates for business activities on e-commerce platforms according to Form No. 01/CTKT-TMĐT issued with this Decree annually by electronic means to households and individuals.

Manage names and passwords of accounts issued by tax authorities; store business transaction data, information and documents related to determining tax payable and tax deducted by households and individuals according to tax management laws.

Deduct taxes, declare deducted taxes, and pay deducted taxes accurately and completely according to the information provided by households and individuals and according to the provisions of this Decree; be responsible before the law for the accuracy, honesty, and completeness of tax records. Organizations managing e-commerce platforms that are subject to tax deduction and payment on behalf of households and individuals and have declared information on deducted taxes and paid on behalf of households and individuals to tax authorities according to the provisions of this Decree shall not have to provide information of households and individuals according to the provisions of Decree No. 91/2022/ND-CP dated October 30, 2022 of the Government amending and supplementing a number of articles of Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government detailing a number of articles of the Law on Tax Administration.

Provide other information on business activities on e-commerce platforms as required by tax authorities in accordance with the law on tax administration.

Fully and promptly pay the deducted and paid taxes on behalf of households and individuals for canceled transactions or returned goods.

Responsibilities of households and individuals conducting business activities on e-commerce platforms

According to this Decree, households and individuals residing and doing business on e-commerce platforms are responsible for declaring and paying special consumption tax, environmental protection tax, resource tax and other revenues payable to the state budget collected by tax authorities in accordance with the provisions of the law on tax, the law on tax management and other relevant laws.

Households and individuals conducting business activities on e-commerce platforms are responsible for providing complete and accurate information on tax codes or personal identification numbers (for Vietnamese citizens); passport numbers or identification information issued by competent foreign authorities (for foreign citizens) and mandatory information for sellers as prescribed by the law on e-commerce to the organization managing the e-commerce platform.

Provide accurate, complete and timely information and documents related to determining tax obligations to organizations managing e-commerce platforms that are subject to deduction and tax payment and are responsible for performing tax obligations as prescribed.

Households and individuals whose value-added tax and personal income tax have been deducted, declared and paid on their behalf by the organization managing the e-commerce platform as prescribed in this Decree shall not have to declare and pay value-added tax and personal income tax for business activities on the e-commerce platform for which tax has been deducted and paid on their behalf.

To Thi Hue

Source: https://sotp.langson.gov.vn/tin-tuc-su-kien/quy-dinh-quan-ly-thue-doi-voi-ho-ca-nhan-kinh-doanh-tren-nen-tang-thuong-mai-dien-tu.html

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