Vietnam: Change to VAT treatment of e-commerce

The National Assembly of Vietnam has approved a new Law on Tax Admin, which will replace the current tax regime for foreign service providers including e-commerce business.

This new law specified that tax rules relating to e-commerce activities will be implemented in July 2022.

Supplies with no permanent establishment 

Article 42.4 of the new law refers to e-commerce business activities, business conducted on a digital platform, and other services provided by offshore suppliers with no permanent establishment in Vietnam. Under Article 27.3 and 42.4, both foreign suppliers (with no permanent establishment in Vietnam) and banks are now required to file and pay tax in Vietnam.

Changes addressed

Some of the main points relating to e-commerce changes are:

  • Commercial banks will be required to withhold and pay taxes on behalf of e-commerce companies that do business abroad but earn income from Vietnam;
  • E-commerce companies that do business on digital platforms without a permanent establishment in Vietnam will be required to register for tax in Vietnam or authorise another entity to do so;
  • A business that qualifies for conducting e-tax transactions will be required to do so for tax purposes;
  • E-invoices will be mandatory for all enterprises from November 2020


There are limited details of how this will be managed and there are ongoing discussions. The Government and the Ministry of Finance are expected to address these grey areas soon.

This new law will also affect non-resident businesses that sell goods and services into Vietnam via online platforms.

Non-resident sellers over the local VAT registration threshold will be required to register.

ROI Calc Calculate your ROI