Vietnam's Digital Economy
Starting July 1, 2025, if you sell goods or services on online platforms like Shopee, Lazada, Tiki, or TikTok Shop in Vietnam, how you pay taxes is about to change significantly. New government regulations (Decree 117/2025/ND-CP) will make it simpler for you in some ways, but also introduce new calculations to understand.
Platforms Will Withhold Your Taxes Directly
The biggest change is that e-commerce platforms will now be responsible for calculating, withholding (deducting), and paying Value Added Tax (VAT) and Personal Income Tax (PIT) on your behalf. This applies to both Vietnamese and foreign individual/household sellers.
- When it happens: This deduction will occur as soon as your order is confirmed and the buyer makes a successful payment.
- What’s taxed: The tax will be calculated on the FULL revenue from your sales, not on the net amount you actually receive after fees. This is important!
Think of it this way: If you sell a product for VND 100,000, and the platform charges you VND 10,000 in fees, shipping, or discounts, you might only receive VND 90,000. However, your tax will still be calculated on the original VND 100,000.
Understanding Your Tax Rates
The tax rates depend on what you sell and whether you are a domestic or foreign individual/household seller.
Common Tax Rates (as a percentage of your total sales revenue):
Type of Sale | VAT | PIT – Domestic Individual | PIT – Foreign Individual | Combined Rate (e.g., Domestic Individual – Goods) |
Goods | 1% | 0.5% | 1% | 1.5% |
Services | 5% | 2% | 5% | 7% |
Transportation/Services linked to goods | 3% | 1.5% | 2% | 4.5% |
Export to Sheets
Example for a Domestic Individual Seller:
Let’s say in a month, you sell VND 100,000,000 worth of goods on an e-commerce platform.
- VAT: 1% of VND 100,000,000 = VND 1,000,000
- PIT: 0.5% of VND 100,000,000 = VND 500,000
- Total Tax Withheld by Platform: VND 1,000,000 + VND 500,000 = VND 1,500,000
This VND 1,500,000 will be deducted by the platform from your earnings. Remember, this is calculated on your gross sales, even if the platform takes out fees for shipping, promotions, or transaction costs.
What if Your Annual Revenue is Low?
If your annual revenue from online sales (across all platforms) is VND 100 million or less (this threshold will increase to VND 200 million from January 1, 2026), you are generally exempt from VAT and PIT.
- If the platform has already withheld tax from you but your total annual revenue falls below this threshold, you can apply for a tax refund for the excess amount paid.
E-Invoicing and Other Taxes
- E-Invoicing: New rules for e-invoices (Decree 70/2025/ND-CP and Circular 32/2025/TT-BTC) are also in effect.
- If you sell directly to consumers (like a retail shop), you might need to use e-invoices generated from a cash register connected to the tax authorities.
- If the platform issues invoices on your behalf, they will do so, and you generally won’t need to re-declare those sales for tax.
- Other Taxes: Don’t forget, you might still need to pay other taxes like Annual License Tax, and potentially Special Consumption Tax or Environmental Protection Tax, depending on what you sell. You are responsible for providing accurate tax ID information to the platforms.
Practical Tip for Online Sellers
Understand Your Gross Revenue: Always know your total sales revenue before any platform deductions. This is your taxable income.
Check Your Statements: Carefully review the statements provided by your e-commerce platforms to understand the withheld tax amounts.
Keep Records: Maintain good records of all your sales, platform fees, and tax deductions.
Invoicing for Returns:
If a customer rejects an order at delivery, you generally don’t need to issue an invoice.
If a customer returns an item after accepting it, you’ll need to create a return record, and your invoicing system should generate an adjustment invoice to reduce your taxable revenue accordingly.
These new regulations aim to create a fairer and more transparent tax environment for Vietnam’s booming digital economy. Understanding them is key to smooth operations and compliance for all online businesses.
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