Online Sales Tax Deduction in Vietnam from July 1, 2025

Decree No. 117/2025/ND-CP, which takes effect on July 1, 2025, introduces several changes to the tax declaration and payment procedures for sellers on e-commerce platforms. Pursuant to the new regulations, taxes related to online sales activities will be directly withheld immediately after an order is successfully confirmed. Below, Viet An Law would like to provide our clients with key information regarding the online sales tax deduction in Vietnam from July 1, 2025.

Who is responsible for withholding and paying taxes on behalf of online sellers?

Pursuant to Article 4 of Decree No. 117/2025/ND-CP, the entities responsible for withholding and paying taxes on behalf of households and individuals conducting business and selling goods online through e-commerce platforms are the organizations managing the e-commerce platforms, both domestic and foreign, including:

• The owner directly managing the e-commerce platform;
• The person authorized to manage the e-commerce platform.

Therefore, from July 1, 2025, e-commerce platforms (e.g., Shopee, Lazada, TikTok Shop, etc.) will be responsible for automatically withholding taxes on each successfully completed order and paying such taxes on behalf of online sellers to the state budget.

Who is responsible for tax withholding and which types of taxes are subject to withholding?

From July 1, 2025, organizations managing e-commerce platforms—both domestic and foreign—are obligated to withhold and pay taxes on behalf of business households and individuals selling on e-commerce platforms, including the following types of taxes:

• Value-added tax (VAT) withholding applies to business households and individuals selling goods and services online via e-commerce platforms, where transactions generate revenue within Vietnam.
• Personal income tax (PIT) withholding applies to the following subjects:
  • Resident individuals conducting business on e-commerce platforms with transactions generating revenue both inside and outside of Vietnam;
  • Non-resident individuals conducting business on e-commerce platforms, for each transaction involving the supply of goods or services that generates revenue within Vietnam.

What is the tax withholding rate for online sales as of July 1, 2025?

Pursuant to Clause 2, Article 5 of Decree No. 117/2025/ND-CP, the amounts of value-added tax (VAT) and personal income tax (PIT) to be withheld are determined based on a percentage of the revenue from each sales transaction. Specifically:

• The VAT withholding rates are defined as follows:
  • Goods: 1%;
  • Services: 5%;
  • Transportation and services associated with goods: 3%.
• The PIT withholding rates are defined as follows:
  • Goods: 0.5% for resident individuals; 1% for non-resident individuals;
  • Services: 2% for resident individuals; 5% for non-resident individuals;
  • Transportation and services associated with goods: 1.5% for resident individuals; 2% for non-resident individuals.

Example: You are a resident individual selling a product, which is a rice cooker, on Shopee for VND1,000,000. The applicable taxes are: VAT (VND10,000) and PIT (VND5,000); The total amount of tax withheld is VND15,000. Accordingly, after tax withholding, the amount received is VND985,000.

Time of tax withholding for online sales

Pursuant to Clause 1, Article 5 of Decree No. 117/2025/ND-CP, the time of withholding taxes on online sales is immediately upon the successful confirmation of the transaction and acceptance of payment for the sale of goods and services on e-commerce platforms by business households and individual sellers. Value-added tax (VAT) and personal income tax (PIT) will be directly withheld from the payment amount of the order, meaning the taxes are deducted before the seller receives money.

How is the declaration and payment of withheld taxes for online sales carried out?

Tax declaration period

Organizations managing e-commerce platforms must declare the amount of tax withheld on a monthly basis.

Tax declaration dossier

The tax declaration dossier for withheld taxes includes:

• Tax withholding declaration form for business households and individuals conducting business on e-commerce platforms, using Form No. 01/CNKD-TMĐT issued together with Decree No. 117/2025/ND-CP.
• Detailed tax withholding statement for business households and individuals conducting business on e-commerce platforms, using Form No. 01-1/BK-CNKD-TMĐT issued together with Decree No. 117/2025/ND-CP.

Method of tax declaration

The e-commerce platform operator must submit the tax declaration dossier electronically via the General Department of Taxation’s official portal: https://thuedientu.gdt.gov.vn/

Responsible authority

The competent authority to receive and process the tax declaration dossier is the E-commerce Tax Sub-Department.

Process for handling canceled or returned orders

In the case of canceled or returned transactions, the e-commerce platform operator shall perform offsetting of the tax amounts previously withheld and remitted with the tax amounts to be withheld and remitted for other transactions involving the sale of goods or provision of services by the seller

Determination of tax payable on behalf of sellers

The amount of tax payable by the e-commerce platform operator on behalf of sellers is calculated as total tax from completed transactions of sales of goods/services after deducting total tax from canceled or returned transactions conducted by business households or individual sellers.

Responsibilities of Online Sellers on E-commerce Platforms

Business households and individuals selling goods or services on e-commerce platforms have the following responsibilities:

• Declare and pay other applicable taxes, including special consumption tax, environmental protection tax, natural resource tax, and other relevant charges;
• Provide complete and accurate personal identification information to the e-commerce platform operator, including tax identification number or personal identification number (for Vietnamese citizens); passport number or identification issued by a competent foreign authority (for foreign citizens); and other mandatory seller information;
• Provide accurate, complete, and timely information and documents related to the determination of tax obligations to the e-commerce platform operator, if subject to tax withholding and payment on behalf.

Advantages of the New Regulation

The regulation requiring online sales taxes to be withheld immediately upon successful transactions offers several benefits:

• Simplify administrative procedures: business households and individuals selling online through e-commerce platforms are no longer required to submit monthly or quarterly tax declarations and reports;
• Automatically withhold tax per order, simplifying tracking and management;
• Reduce the risk of tax arrears or penalties due to failure to declare or late declarations.

Notes for business households and online sellers

• Update identification information (citizen ID number/tax identification number), address, and correct name on the e-commerce platform’s system;
• Regularly review monthly transaction and tax reports issued by the platform;
• Review your pricing strategy to ensure post-tax profitability, since taxes are calculated directly based on gross transaction revenue (i.e., the selling price); you may consider including other costs in the product price.

If you require detailed consultation on taxes withheld at the time of online sales, please feel free to contact Viet An Law for the best support