HCM City lists applicable tax categories for online sellers

The HCM City Department of Taxation officially announced a series of taxes applicable to online merchants, including licence tax, value added tax, personal income tax, excise tax, and environmental protection tax (if any).

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On July 7, 2017, the Ho Chi Minh City Department of Taxation announced in detail the regulations on registration, declaring and paying taxes to all e-commerce business activities in Ho Chi Minh City.

This announcement revealed that merchants selling goods through the internet with annual revenue of more than VND100 million ($4,400) have to register and declare tax. The tax obligations consist of licence tax, value added tax, personal income tax, excise tax and environmental protection tax (if any).

In particular, the amount of licence tax subjected to online merchants with annual revenue above VND500 million ($22,000) is VND1 million ($44) per year, those with annual revenue of VND300-500 million ($13,200-22,000) will have to pay VND500,000 ($22) per year, and the ones who earn a revenue of VND100-300 million ($4,400-13,200) per year have to pay VND300,000 ($13.2) of licence tax.

Online merchants who were granted tax registration and tax codes during the first half of the year will pay licence tax for the whole year, while those who are granted tax registration, enterprise codes, and tax codes in the second half of the year will have to pay 50 per cent of the annual charge.

Besides, internet sellers who distribute and supply goods have to pay value added tax and personal income tax of 1 per cent and 0.5 per cent, respectively. The applicable charges for service providers are 5 and 2 per cent, respectively.

Online merchants providing transportation services or other services related to distributing goods have to pay 3 per cent of value added tax and 1.5 per cent of personal income tax. Other e-commercial business activities have to pay two per cent value added tax and one per cent personal income tax.

Previously, the tax departments in Ho Chi Minh City have clarified and collected information on the identity and telephone numbers of 13,422 Facebook account holders. However, according to the Tax Department in Binh Thanh district, there were no individuals or organisations coming forward to work with them.

Recently, leaders of some tax departments in Ho Chi Minh City districts said that they would continue to update the list of online sellers and invite them to file and pay tax. Meanwhile, tax departments will collect tax arrears and list out all individuals and organisations found to be committing tax evasion on the mass media.

Vietnam E-commerce Report 2017, which was released by the Vietnam E-commerce Association (VECOM) based on a survey conducted on thousands of enterprises all over Vietnam at the end of 2016, revealed that there 34 per cent of enterprises ran their online business on social networks, such as Facebook or Zalo, in 2016.

Also, 85 per cent of enterprises received online orders through email, 45 per cent received orders from their own websites, and fewer than 50 per cent of the surveyed enterprises said that they received customers’ orders through social networks.


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