Decree 117/2025/ND-CP: Tax Management for Online Businesses in Vietnam

In the context of a rapidly developing digital economy, online business has become an inevitable trend, contributing significantly to Vietnam’s economic growth. However, this boom also poses challenges for tax management, requiring a clear legal framework. To improve the tax legal system and effectively manage online business activities, the Government has issued Decree 117/2025/ND-CP on June 9, 2025. This Decree serves as an important basis for state agencies to implement synchronized tax collection solutions, ensuring fairness and legal compliance. Decree 117/2025/ND-CP will specifically regulate the subjects, principles of tax management, obligations of the participating parties, and the responsibilities of tax authorities. This demonstrates the Government’s determination to build a transparent and fair online business environment, promoting the sustainable development of Vietnam’s digital economy. The following article will clarify the contents of this decree.

Scope of regulation of Decree 117/2025/ND-CP: Tax Management for Online Businesses

Scope of regulation of Decree 117/2025/ND-CP

• Responsibility for deduction and payment of value-added tax (VAT) and personal income tax (PIT) on behalf of household businesses and individual businesses by domestic and foreign organizations operating e-commerce exchanges, organizations operating digital platforms with payment features, and other organizations performing digital business activities.
• Methods for e-commerce platform operators, payment-enabled digital platform operators, and other organizations performing digital business activities to deduct, pay, and declare the deducted tax on transactions conducted on such e-commerce platforms or digital platforms on behalf of sellers.
• Documentation and procedures for tax declaration, payment, and refund for sellers on e-commerce or digital platforms.

Regulated entities of Decree 117/2025/ND-CP on tax management for online businesses

Subjects of application of Decree 117/2025/ND-CP

• E-commerce platform operators, payment-enabled digital platform operators, and other organizations performing digital business activities have the responsibility to deduct and pay tax on behalf of sellers.
• Resident sellers and non-resident individuals who do business on e-commerce or digital platforms.
• Tax authorities, relevant organizations, and individuals.

Deduction and payment of tax on behalf of sellers

According to Article 4 of Decree 117/2025/ND-CP: Tax Management for Online Businesses:

• Domestic and foreign e-commerce platform operators that are obliged to deduct and pay taxes on behalf of sellers (including owners who directly operate e-commerce platforms or persons authorized to operate e-commerce platforms) shall carry out such deduction and payment in accordance with the law on VAT for each domestic transaction generating revenue by sellers on e-commerce platforms.
• Domestic and foreign e-commerce platform operators that are obliged to deduct and pay taxes on behalf of sellers (including owners who directly operate e-commerce platforms or persons authorized to operate e-commerce platforms) shall (i) deduct and pay tax on behalf of household/individual businesses that are residents in accordance with law on PIT for each domestic and foreign transaction generating revenue by individuals that are residents doing business on e-commerce platforms; (ii) deduct and pay tax on behalf of household/individual businesses that are non-residents in accordance with law on PIT for each domestic transaction generating revenue by individuals that are residents doing business on e-commerce platforms.

Time of tax deduction

• E-commerce platform operators shall deduct and pay VAT and PIT for each sale of goods/services generating revenue on the e-commerce platform under their management immediately upon confirming successful transactions and accepting payment for sales of goods and/or services on their e-commerce platform on behalf of the sellers.

Determination of the tax amount to be deducted

The amount of VAT and PIT to be deducted is determined by a percentage (%) of the revenue from each sale of goods/services.

• The percentage (%) for calculating VAT is determined in accordance with the VAT Law. To be specific:
  • Goods: 1%
  • Services: 5%
  • Transport, services associated with goods: 3%
• The percentage (%) for calculating PIT is determined in accordance with the PIT Law. To be specific:
  • For individuals who are residents

Goods: 0,5%

Services: 2%

Transport, services associated with goods: 1,5%

• • For individuals who are non-residents

Goods: 1%

Services: 5 %

Transport, services associated with goods: 2%

• If e-commerce platform operators that are obliged to deduct and pay tax on behalf of sellers cannot determine which type of service generates a specific revenue, tax shall be deducted at the highest percentage (%) specified in point a of this clause and the highest percentage (%) for services specified for residents or non-residents.
• The revenue from each sale of goods/services is the amount received by the seller for the sale of goods or services that the e-commerce platform operator collects on the seller’s behalf.

Method for declaring and paying the deducted tax

• E-commerce platform operators shall declare the deducted tax on a monthly basis.
  • For transactions that are canceled or involve returned goods, the organization shall offset the tax amounts that are deducted and paid on the canceled or returned orders against the deducted tax on sales of goods and/or services paid on behalf of the same sellers.
  • The tax paid by e-commerce platform operators on behalf of sellers shall be determined by the total tax amounts on sales of goods and/or services by such sellers after offsetting the total tax amount on canceled or returned orders.
  • Each domestic e-commerce platform operator is assigned a unique tax identification number (10-digit TIN) by the tax authority to declare and pay the deducted tax, without having to carry out taxpayer registration.
  • Each foreign e-commerce platform operators is also assigned a 10-digit TIN to fulfill tax obligations in Vietnam, as prescribed for foreign suppliers in Circular 80/2021/TT-BTC dated September 29, 2021, by the Minister of Finance and mat use this number to declare and pay the deducted tax on behalf of sellers who are residents doing business on e-commerce platforms abroad.

Documentation and procedures for tax declaration and payment for sellers who are residents doing business on e-commerce platforms without payment features

• Sellers who are residents doing business on e-commerce platforms without payment features shall directly pay VAT, PIT, excise tax, environmental protection tax, natural resource tax, and other payable amounts to the state budget collected by tax authorities in accordance with tax laws and relevant laws, declare and pay taxes electronically.
• Tax declaration:
  • Sellers on e-commerce platforms shall declare tax monthly.
  • Sellers that do not do business regularly on e-commerce platforms shall declare tax for each occurrence.
• Procedures for taxpayer registration, tax declaration, and tax payment:
  • Tax declaration dossier: Tax declaration for sellers on e-commerce platforms using Form 02/CNKD-TMDT attached to Decree 117/2025/ND-CP.
• The receiving authority is the tax authority managing the area where the seller resides (current residence/temporary residence/permanent residence).

Documentation and procedures for tax declaration and payment for individuals who are non-residents doing business on e-commerce platforms without payment features

• Individuals who are non-residents doing business on e-commerce platforms without payment features shall directly pay VAT and PIT on goods and/or services sold and provided on e-commerce platforms at the percentage (%) of the revenue in accordance with the VAT Law and the PIT Law.
• The percentage (%) for calculating VAT and PIT is determined in accordance with the VAT Law and PIT Law. To be specific:
  • The percentage (%) for calculating VAT

Goods: 1%

Services: 5%

Transport, services associated with goods: 3%

• • The percentage (%) for calculating PIT

Goods: 1%

Services: 5%

Transport, services associated with goods: 2%

• Tax declaration
  • Non-resident individuals falling under clause 1 of this Article must declare VAT for domestic sales of goods, service provision on e-commerce platforms, PIT, and pay taxes to the E-commerce Tax Sub-Department for each occurrence through electronic means.
  • Non-resident individuals doing business on e-commerce platforms without payment capabilities must carry out electronic tax transaction registration, first-time taxpayer registration using tax declaration dossiers.
• Procedures for tax declaration and payment
  • Tax declaration dossier: Tax declaration for sellers who are non-residents on e-commerce platforms using Form 03/CNKD-TMDT attached to Decree 117/2025/ND-CP.

Documentation and procedures for tax refund

• For households/individuals whose VAT and PIT have been deducted and paid on their behalf by the organization specified in Article 4 hereof for transactions arising in the year but whose annual revenue from all business activities is not subject to VAT and PIT, the tax refund procedure shall be carried out in accordance with the law on tax administration after the e-commerce platform operator has completed the obligation to declare and pay deducted tax on behalf of the sellers on its e-commerce platforms in the tax year.
• In cases where sellers have paid VAT and PIT for transactions occurring within the year in accordance with Article 8 and Article 9 hereof, but their annual revenue is not subject to VAT and PIT, they shall carry out the tax refund procedures in accordance with the law on tax administration.
• Application for tax refund: Application form for tax refund for sellers on e-commerce platforms using Form 03/CNKD-TMDT attached to Decree 117/2025/ND-CP.
• The receiving authority is the tax authority managing the area where the seller resides (current residence/temporary residence/permanent residence).

Above is the information on the issue of Decree 117/2025/ND-CP: Tax Management for Online Businesses. Clients who have related questions or need legal support, please contact Viet An Law Firm for the best support.