Vietnam promulgates decree on tax administration for business activities on e-commerce and digital platforms of households and individuals

• Decree 117/2025/ND-CP, dated 9 June 2025, provides guidance on the scope of responsibilities, tax withholding methods, on-behalf tax payments, and tax declarations for organizations that are managers of e-commerce platforms or digital platforms with payment functions (including both domestic and foreign organizations), as well as for organizations engaged in other digital economic activities involving business transactions of households and individuals conducted on e-commerce or digital platforms.
• Effective from 1 July 2025, organizations managing e-commerce platforms will be responsible for withholding, declaring and paying Value-Added Tax and Personal Income Tax on behalf of sellers who are individuals and households for each transaction.
• The Decree mandates that tax withholding occurs as soon as a transaction is confirmed, with specific tax rates established for different types of goods and services.
• Organizations managing e-commerce platforms must comply with new monthly tax declaration requirements, potentially significantly affecting their tax reporting and payment processes.

Executive summary

On 9 June 2025, the Government of Vietnam issued Decree No. 117/2025/ND-CP (Decree No. 117), regulating tax administration for business activities of households and individuals conducted on e-commerce and digital platforms (collectively referred to as "the e-commerce platforms"). This Decree provides further guidance to implement Law No.56/2024/QH15, amending and supplementing articles of a number of laws, including the Law on Tax Administration No. 38/2019/QH14, dated 13 June 2019. (See EY Global Tax Alert, Vietnam introduces new and amended tax laws on foreign suppliers conducting business through e-commerce and digital platforms, dated 20 December 2024.)

Responsibility to withhold and pay tax "on behalf"

From 1 July 2025, organizations that are managers of e-commerce platforms or digital platforms with payment functions (including both domestic and foreign organizations), and organizations engaged in other digital economic activities (including owners directly managing the e-commerce platform or those who are authorized to manage the e-commerce platform) (collectively referred to as "organizations managing e-commerce platforms"), will be responsible for withholding, declaring and paying the applicable Value-Added Tax (VAT) and/or Personal Income Tax (PIT) for each transaction providing goods and services on behalf of households, residents or nonresident individuals conducting business activities on the e-commerce platforms.

Organizations that are considered "managers of e-commerce platforms — digital platforms with payment functions" are the managers of the platforms that facilitate buyers' direct payments through various payment methods, such as: e-wallets; bank cards; transfers via payment accounts, integrated transfer systems or cash on delivery; and other payment methods as prescribed by law.

Organizations "engaged in other digital economic activities" are organizations in Vietnam that, on behalf of foreign e-commerce or digital platforms providers, make income payments to households and individuals for digital content goods and services in accordance with the Law on Information Technology.

Resident and nonresident individuals applying the provisions of this Decree must do so in accordance with the Law on Personal Income Tax.

Method of tax withholding, declaration and payment "on behalf"

Applicable taxes

Organizations managing e-commerce platforms are responsible for withholding, declaring and paying taxes as follows:

• VAT payable according to this regulation for each transaction in which providing goods and services generates domestic revenue for households and individuals conducting business on e-commerce platforms
• PIT payable according to this regulation for:
  • Each goods and services transaction that generates both domestic and international revenue for resident individuals conducting business on e-commerce platforms
  • Each goods and services transaction that generates domestic revenue for nonresident individuals conducting business on e-commerce platforms

Withholding point

Organizations managing e-commerce platforms must withhold payable VAT and PIT as soon as the transaction is confirmed successful and payment is accepted for the provision of goods and services on the e-commerce platforms.

Tax rate

The tax amount to be withheld is determined as a percentage of revenue from each transaction involving the provisions of goods or services, as follow:

If it is not possible to determine whether the nature of the transaction generating revenue from e-commerce platforms is goods or services or which type of services are being provided, the highest percentage of VAT and PIT for resident individuals or nonresident individuals will apply.

Method of tax declaration and payment "on behalf"

For an entity making a tax declaration and payment, the tax authority issues either:

• A separate 10-digit tax identification number for domestic organizations managing e-commerce platforms to declare and pay the withheld tax amount
• A 10-digit tax identification number for foreign organizations managing e-commerce platforms to fulfill their tax obligations arising in Vietnam and to declare and pay the withheld tax on behalf of households and individuals conducting business on foreign e-commerce platforms.

The tax declaration documents for the withheld tax include the Tax Withholding Declaration Form No. 01/CNKD-TMDT and the Detailed List of Tax Withheld Form No. 01-1/BK-CNKD-TMDT, issued together with Decree No.117.

Organizations managing e-commerce platforms must declare the withheld tax monthly and submit the tax declaration documents electronically to the tax authority managing the organizations.

Organizations managing e-commerce platforms must prepare a Detailed List of Tax Payments Form No. 01/BKNT-TMDT, attached to the Decree, and send it to the tax authority after completing the payment to the State budget.

Issuance of tax withholding documents

Organizations managing e-commerce platforms must issue the electronic annual tax withholding documents to the households and individuals. Before using electronic tax withholding documents, the organizations must register to use this document through the electronic portal of the Department of Taxation, the General Department of Customs or e-invoice service provider.

For e-commerce platforms without payment functions, households and both resident and nonresident individuals conducting business on the e-commerce platform must self-declare and pay taxes as prescribed. Households and individuals who have had taxes withheld and paid by the organizations managing e-commerce platforms or have self-declared and paid taxes, but determine that their total annual revenue is not subject to tax, must follow the tax refund procedures by submitting a request to the tax authority responsible for the area where they reside.

Effectiveness

This Decree takes effect from 1 July 2025.

Implications

In addition to making the quarterly tax declaration and payment for e-commerce and digital-based business activities and other services of foreign suppliers, organizations managing e-commerce platforms will also need to file monthly tax declaration documents on behalf of households and individuals conducting business on their e-commerce platforms.