E-commerce Platforms to Withhold and Pay Taxes on Behalf of Sellers in Vietnam

Strategic Insights -

The Government of Vietnam has officially announced that e-commerce platforms will begin withholding and paying value-added tax (VAT) and personal income tax (PIT) on behalf of individual sellers starting July 1, as per Decree No. 117/2025/ND-CP. This move aims to enhance the efficiency of tax collection from the fast-growing online business sector, which has faced issues with data transparency and tax declaration compliance. Under the new regulations, e-commerce platforms with payment functions will be responsible for withholding, declaring, and paying taxes on behalf of sellers, while sellers will still need to issue invoices to customers. This shift in tax administration is expected to simplify tax obligations for sellers and improve tax management in the digital economy.

Key Takeaways:

  • E-commerce platforms in Vietnam, including Shopee, Lazada, Tiki, and TikTok Shop, will begin withholding and paying VAT and PIT on behalf of individual sellers starting July 1, in accordance with Decree No. 117/2025/ND-CP.
  • Sellers will still be required to issue invoices to customers but will no longer need to declare or pay taxes on revenue already withheld and paid by the platform.
  • E-commerce platforms will be responsible for issuing invoices on behalf of sellers if authorized to do so, and will calculate the amount of VAT and PIT to be withheld as a percentage of revenue from each sale.
  • Tax experts believe this move simplifies tax obligations for sellers and improves tax management in the digital economy.
  • Traditional businesses were already required to fully declare and pay taxes, and this move helps level the playing field.
  • Mai SAE!n, deputy director of the Department of Taxation under the MoF, emphasized the importance of this regulation in enhancing tax collection efficiency from the online business sector.

Statistics:

  • In the first five months of the year, tax revenue from e-commerce and digital business activities reached VND74.4 trillion (US$2.85 billion), a 55% surge compared to the same period in 2024.
  • Among these, 158 foreign providers registered, declared, and paid taxes through the electronic tax portal, contributing VND5.7 trillion in the first five months, up 41% year-on-year.
  • 100,000 business households and individuals registered, declared, and paid nearly VND1.1 trillion in taxes via the portal for household and individual taxpayers.
  • Nearly 93,000 organisations and individuals involved in e-commerce contributed VND67.6 trillion in tax revenue.

Sources:

  • [Source: Decision No. 117/2025/ND-CP]
  • [Source: Mai SAE!n, deputy director of the Department of Taxation under the MoF]
  • [Source: Ministry of Finance (MoF) data]