The Vietnam Chamber of Commerce and Industry (VCCI) has proposed that the Ministry of Finance allow online sellers to pay taxes under a fixed-rate method and postpone the implementation of the new e-commerce tax policy by three months.

VCCI recently submitted its feedback on the draft decree governing tax management for business activities on e-commerce and digital platforms, which applies to individual sellers and household businesses.

Notably, VCCI has suggested delaying the tax collection deadline for online sales by three months.

The draft decree is scheduled to take effect on April 1, 2025. However, VCCI pointed out that businesses have raised concerns that the timeline is too tight - less than two months from now - while the decree is still in its draft stage. Companies need additional time to develop IT systems, allocate human resources, and educate sellers about compliance requirements.

To address this, VCCI proposed pushing back the implementation date to July 1, 2025, allowing businesses sufficient time to prepare.

VCCI acknowledged the necessity of tax collection but emphasized the importance of designing a tax framework that minimizes administrative burdens and compliance costs for both businesses and individual sellers.

The organization also stressed the need to clearly define responsibilities among stakeholders in the new tax system to ensure smooth implementation.

Calls for a fixed-rate tax option

The draft decree does not allow individual sellers on e-commerce platforms to pay taxes under a fixed-rate method. VCCI argued that tax authorities might assume all e-commerce businesses use digital software capable of automatically tracking revenue, making a declaration-based tax system feasible.

However, VCCI contended that this approach is unsuitable for small-scale or newly established online sellers, as many lack the capital to invest in business management software and may struggle with complex tax declarations.

To support small online businesses, VCCI recommended allowing a fixed-rate tax scheme for sellers with a limited number of transactions. The number of orders could be verified through logistics providers.

Additionally, the draft decree requires online sellers to declare business expenses. VCCI argued that this requirement is unnecessary, as taxes are calculated based on revenue.

Requiring detailed reporting on costs such as inventory, labor, utilities, shipping, and marketing would create a significant administrative burden for individual sellers.

Concerns over e-commerce platform obligations

VCCI also opposed a provision that mandates e-commerce platforms submit tax withholding records to tax authorities.

According to businesses, this requirement is redundant, as platforms already report detailed tax deductions monthly, providing tax agencies with full data on taxpayers and their tax liabilities.

Requiring platforms to submit vast amounts of tax withholding documents - potentially millions of records annually - would increase compliance costs for businesses.

Taxable revenue definition under scrutiny

The draft decree defines taxable revenue as the total amount collected by e-commerce platforms from buyers.

VCCI argued that this definition could misrepresent a seller’s actual revenue. Payments made through platforms often include multiple components beyond the seller’s products, such as shipping fees, platform service charges, and payment processing costs.

To ensure fairness, VCCI suggested revising the definition so that taxable revenue reflects the actual amount e-commerce platforms intend to pay sellers after deducting service fees.

 Hanh Nguyen