The Government of Vietnam issued Decree No. 117/2025/ND-CP (“Decree 117”) on June 9, 2025, stipulating tax administration for business activities of households and individuals on e-commerce platforms and digital platforms. 

Decree 117 will take effect from July 1, 2025, and includes the following key points: 

1. Scope of regulation and applicable entities 

Scope of Regulation: 

• Stipulates the responsibility for withholding and remitting taxes (Value Added Tax (“VAT”) and Personal Income Tax (“PIT”)) by organizations managing E-commerce exchanges and digital platforms with payment functions, including both domestic and foreign organizations, along with other organizations engaged in digital economic activities. 

• Guides these organizations on how to implement tax withholding, remittance, and declaration of withheld taxes for transactions of households and individuals on digital platforms. 

• Regulates the dossier, procedures for tax declaration, tax payment, and tax refund for households and individuals engaged in business activities on E-commerce platforms and digital platforms. 

The Decree applies to: 

• Organizations managing E-commerce exchanges and organizations managing digital platforms with payment functions; 

• Other organizations engaged in digital economic activities subject to tax withholding and remittance; 

• Resident households and individuals, and non-resident individuals engaged in business activities on e-commerce platforms and digital platforms; 

• Tax authorities and relevant organizations and individuals. 

2. Regulations on withholding and remitting taxes  

Organizations managing E-commerce platforms, both domestic and foreign, are responsible for withholding and remitting taxes on behalf of households and individuals doing business on their platforms. 

The types of taxes to be withheld and remitted include: 

• VAT for transactions involving the supply of goods and services generating revenue in Vietnam by households and individuals. 

• PIT for resident individuals (for both domestic and foreign-sourced income) and non-resident individuals (for domestic-sourced income). 

3. Time of withholding and determination of withheld tax amount  

The withholding of VAT and PIT will be performed immediately upon successful transaction confirmation and acceptance of payment. The amount of tax to be withheld is determined as a percentage of the revenue from each transaction. 

In cases where it is not possible to determine whether the revenue-generating transaction from the E-commerce platform is for goods or services, or the specific type of service, the highest percentage rate will be applied for tax determination. 

4. Mechanism for tax declaration and payment 

Organizations managing E-commerce platforms will declare withheld tax on a monthly basis.  

For cancelled transactions or returned goods, the withheld and remitted tax can be offset against the tax to be withheld and remitted for other sales of goods or service provision transactions.  

Domestic organizations will be granted a separate tax code for declaring and remitting taxes on behalf of others. Meanwhile, foreign organizations will be granted a 10-digit tax code to fulfill their tax obligations in Vietnam and declare and remit withheld taxes from resident households and individuals. The declaration dossier includes the Tax Withholding Declaration (Form No. 01/CNKD-TMĐT) and the detailed list of withheld taxes (Form No. 01-1/BK-CNKD-TMĐT). 

5. Responsibilities of households and individuals doing business on e-commerce platforms 

Resident households and individuals engaged in business activities on E-commerce platforms are responsible for declaring and paying special consumption tax, environmental protection tax, natural resource tax, and other levies.  

These individuals are responsible for providing complete and accurate tax code or personal identification number information to the E-commerce platform managing organization.  

Households and individuals whose VAT and PIT have been withheld, declared, and remitted by E-commerce platform managing organizations are not required to self-declare and pay these taxes for the activities that have already been withheld. 

Decree 117/2025/ND-CP marks a significant step in completing the legal framework for tax administration of business activities in the digital space, aiming to ensure tax fairness and enhance the effectiveness of state budget collection in the context of a rapidly developing digital economy.