As of 1 July 2025, new regulations on value-added tax (VAT) have officially came into effect. The new regulations are detailed in the following three key legal documents:
- The Law on Value-Added Tax 2024, which has been passed by the National Assembly of Vietnam on 26 November 2024 (the“VAT Law”);
- Decree No. 181/2025/ND-CP dated 1 July 2025, which provides detailed guidance onthe implementation of certain articles of the VAT Law; and
- Decree No. 117/2025/ND-CP dated 9 June 2025, which regulates tax management for e-commerce and digital platform business activities conducted by households and individuals.
One of the key highlights of the new regulations is the mechanism for the withholding and payment of VAT applicable to business activities via e-commerce and digital platforms. Accordingly, the e-commerce and digital platforms shall be responsible for withholding taxes before paying the remaining amount to the sellers and then, on behalf of the sellers, remitting the payable taxes to the tax authority. The new amendment aims to:
- Enhance state budget revenue collection from e-commerce, digital platform, and other digital economic activities;
- Create a fair and transparent business environment between traditional businesses and those operating digitally;
- Increase the responsibility of intermediary organizations and e-commerce/digital platforms management organizations in supporting tax authorities with tax collection; and
- Facilitate simpler and more efficient tax compliance for individuals and household businesses.
Who does this mechanism apply to?
The supplemented regulations identify two categories of taxpayers subject to withhoding and payment of VAT on their behalf:
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Taxpayer |
On behalf of Taxpayer |
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In the context of increasingly expanding business on e-commerce and digital platforms, the above regulations on tax withholding and payment on behalf of the seller help minimize tax evasion risks from online business activities and foster a more transparent and equitable e-commerce and digital ecosystem.
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