Improve Vietnam's tax administration system for e-commerce

Improve Vietnam’s tax administration system for e-commerce

The Prime Minister of Vietnam issued Directive No. 889/CD-TTg on October 1st, 2022, on improving the efficiency of tax administration for e-commerce and digital business.

The popularity of digital businesses has expanded as the digital economy has flourished. According to predictions, Vietnam’s e-commerce would generate USD 13,7 billion in revenue in 2021, up 16% from 2020 and taking 6.5% of all retail sales.

The quick emergence of several new e-commerce and digital business models creates new difficulties for state management, especially the administration of tax collection.

The Prime Minister must focus on carrying out a number of responsibilities if tax collection administration in e-commerce and digital company operations is to keep being more effective.

As stated in Decision No. 508/QD-TTg dated April 23, 2022, the Ministry of Finance assumes primary responsibility and works in coordination with other Ministries and agencies to implement a number of solutions for the implementation of the Strategy for Reform of the Tax System through 2030. These include solutions for enhancing the tax administration for e-commerce, such as strengthening the propagation, assisting those involved in commerce and business in declaring and paying taxes in line with the law, advising overseas suppliers to follow the rules while doing business in Vietnam, and create a tax administration database for e-commerce.

The Ministry of Justice requests urgent opinions on the draft Decree on revising Decree 126/2020/ND-CP, which outlines a number of articles of the Law on Tax Administration and specifies the amendments on tax administration for e-commerce.

To complete the legal basis for suspending and revocation of the online operating license for units with tax violations, the Ministry of Information and Communications should collaborate with the Ministry of Finance and other authorities in establishing the legal normative document system.

The Ministry of Industry and Trade will conduct research, complete the legal framework, collaborate with the Ministry of Finance to share a database, and connect data for state management on e-commerce activities in order to create favorable tax administration conditions for individual business activities on the e-commerce trading platform.

ASL LAW is the top-tier Vietnam law firm for doing business in Vietnam. If you need any advice, please contact us for further information or collaboration.


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