Vietnam Tightens E-Commerce Tax Regulations: Moving Towards Transparency and Fairness

In 2024, Vietnam’s tax authorities collected a record VND 116 trillion (approximately USD 4.6 billion) from e-commerce transactions, highlighting the rapid expansion of the digital economy. However, despite this milestone, more than 300,000 storefronts on Shopee, Lazada, Tiki, Sendo, and Grab remain unregistered, making tax collection a persistent challenge.

This situation has paved the way for a series of regulatory changes in 2025, with stricter oversight measures aimed at enhancing tax transparency and creating a level playing field for all businesses.

E-Commerce in Vietnam: Booming Growth, Tax Collection Challenges

Vietnam has witnessed a remarkable surge in e-commerce, with market size expanding from USD 16.4 billion in 2022 to USD 25 billion in 2024. Alongside domestic platforms like Shopee, Lazada, Tiki, and TikTok Shop, the market has also seen the entry of cross-border players such as Temu, Shein, Booking, Agoda, and Airbnb.

While tax authorities have made strides in collecting revenue from this sector, the proportion of tax collected relative to total e-commerce revenue is declining, from 20.1% in 2022 to 17.4% in 2024. This decline suggests that a significant number of individuals and businesses on digital platforms have yet to fulfill their tax obligations, from small-scale sellers to key opinion leaders (KOLs) earning billions of dong through livestream sales.

In response, the government is moving towards a regulatory framework that shifts the tax collection responsibility to digital platforms rather than relying on self-reporting by individual sellers.

New Draft Decree: A Fundamental Shift in E-Commerce Taxation

Vietnam’s Ministry of Finance is finalizing a draft decree on e-commerce tax management, with key provisions including:

?? E-commerce platforms to withhold and remit taxes on behalf of sellers

Platforms will be required to automatically deduct taxes from transactions before transferring payments to sellers. This ensures that a portion of each seller’s revenue is directly deposited into the state treasury, minimizing tax evasion risks.

?? Mandatory reporting of seller transactions

E-commerce marketplaces will be required to submit detailed transaction reports to tax authorities, enabling better identification and monitoring of online sellers.

?? Stronger oversight on cross-border platforms

Global platforms such as Temu, Shein, Booking, Agoda, and Airbnb—which generate significant revenue in Vietnam but have no local tax presence—will be required to register, declare, and pay taxes. Failure to comply could result in payment restrictions or operational limitations.

These measures align Vietnam’s e-commerce tax policies with international best practices, following in the footsteps of countries like the UK, US, Germany, Australia, and China, where digital platforms are responsible for tax collection on behalf of sellers.

Implications for Stakeholders

? E-commerce Platforms

• Increased compliance burden, requiring platforms to upgrade their systems to facilitate tax deductions.
• Risk of penalties for non-compliance in tax reporting and collection.

? Online Sellers

• Tax avoidance will become nearly impossible, as deductions will be applied at the source.
• Previously unregistered sellers may face tax audits and financial penalties.

? Tax Authorities

• More efficient tax collection through automation and real-time reporting.
• Reduced revenue leakage by capturing untaxed transactions from both domestic and international sellers.

Lessons from Global Tax Reforms

Vietnam is not alone in tackling tax evasion in the digital economy.

• United States: Since 2019, Amazon and eBay have been legally required to collect sales tax on behalf of sellers.
• European Union: From 2021, e-commerce platforms must report and collect value-added tax (VAT) for all transactions.
• China: The government has implemented AI-driven tax monitoring to detect fraud and enforce tax compliance among e-commerce sellers.

Vietnam is now following suit, aiming to build a fairer and more transparent tax system for its digital economy.

Technology: The Future of Tax Compliance

Automated tax deductions by e-commerce platforms are just the beginning of Vietnam’s digital tax transformation. In the near future, AI, big data, and blockchain will play a crucial role in:

• Monitoring online transactions to detect tax evasion.
• Automating tax audits for individuals and businesses operating on digital platforms.
• Enabling real-time tax calculation and collection, ensuring higher efficiency and compliance.

Conclusion: A New Era of Digital Taxation

Vietnam is entering a critical phase in digitizing its tax system, particularly as e-commerce continues to grow. The shift towards direct tax collection through online platforms is expected to drive significant changes in how businesses, individuals, and the economy interact with tax authorities.

However, successful implementation will require strong collaboration between the government and digital platforms, as well as a clear transition roadmap to avoid unnecessary market disruptions.

?? ECOVIS Vietnam is ready to assist businesses and individuals in adapting to these new tax regulations, ensuring compliance while optimizing business operations in the digital age.

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