Vietnam: From January 1, 2022, e-commerce and digital businesses need to register and declare tax on B2C transactions.

The Ministry of Finance (MoF) of Vietnam recently issued a Circular 80 (80//2021/TT-BTC) regarding the implementation of Vietnam’s tax law (Law on Tax Administration in 2019, Law 38/2019/QH). As per Circular 80, from the 1st of January 2022, business-to-consumer (B2C) transactions will also be subjected to withholding taxes, meaning that foreign e-commerce businesses and digital platforms (f.e. Netflix, Steam, Ebay or Amazon ) that earn a Vietnam-sourced income from the Vietnamese individuals will also have to pay taxes in Vietnam.

Previously, the tax was only applied to business-to-business (B2B) transactions, as a result, local companies in Vietnam were responsible to declare, withhold and remit taxes on payments made to foreign goods suppliers and service providers under the foreign contractor tax (FCT) regulations, with some exceptions.

Though Vietnam’s e-commerce market started to develop in recent years, by 2020 its worth reached  11.8 billion USD and is estimated to surpass 35 billion USD by 2025.

Source: General Department of Taxation of Vietnam (GDT)

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