Vietnam: Hanoi’s Tax Department explains the ruling of the 5% VAT rate on e-commerce activities
The Hanoian Tax Department in Vietnam encourages taxpayers to fulfill their obligations with respect to the e-commerce activities following the draft plan by Vietnam’s MoF “Tax management for e-commerce activities in Vietnam.”
The city tax department is exerting efforts to address questions and concerns of taxpayers. Aside from the 2% personal income tax, social media influencers are also subject to pay 5% VAT. Social media influencers are individuals and companies that earn income from social media websites (e.g., Meta Platforms or formerly known as Facebook, Inc., Google, and YouTube).
Penalties
A failure to comply with the tax obligations will be considered as tax evasion and tax fraud and the city tax departments will take coercive measures to collect arrears. Other tax offences that may occur are:
- False declaration
Taxpayers may be fined for tax administrative violations, as well as charge a late payment interest.
- Deliberate tax evasion
According to the Tax Law, taxpayers may be fined 1 to 3 times of the late payment amount and may even be transferred to the investigation agency for clarification.
More updates for Vietnam
- From January 1, 2022, e-commerce and digital businesses need to register and declare tax on B2C transactions.
- MoF issues Circular 80 guiding the Policy on Tax administration for e-Commerce business activities