Tax declaration instructions for resident individuals with e-commerce business activities

Along with the development of science and technology, e-commerce has become an important economic sector in many countries due to its advantages such as saving time, convenient transactions and optimizing costs. In recent years, Vietnam has always been ranked among the countries with the fastest growing e-commerce market in the world.

Below are some instructions for tax declaration according to current law:

Vinh Tax Department officials check against motorbike tax loss. Photo: Quang An

First, about the subjects of tax declaration and payment

According to the provisions of the Law on Value Added Tax and its implementing documents, goods and services used in Vietnam that are purchased and sold through e-commerce from websites located in Vietnam or in other countries, the seller must declare and pay VAT according to regulations.

Regarding personal income tax, individuals residing in Vietnam who generate taxable income from e-commerce transactions in Vietnam and on international websites must declare and pay personal income tax according to regulations.

Second, on determining the amount of tax payable

For individuals residing in Vietnam who conduct e-commerce business activities and whose total revenue from all types of business in the calendar year (including other types of business other than e-commerce) exceeds VND 100 million/year, they must declare and pay VAT and personal income tax according to the regulations for business individuals as prescribed in Circular No. 92/2015/TT-BTC dated June 15, 2015 of the Ministry of Finance. Specifically as follows:

- VAT payable = Sales price of goods and services x VAT rate

- Amount of personal income tax payable = Selling price of goods and services x personal income tax rate

The table of VAT and personal income tax rates calculated on revenue is determined according to the provisions in Appendix 01 issued with Circular No. 92/2015/TT-BTC applicable to each industry sector as follows:

- Distribution and supply of goods: VAT rate is 1%; personal income tax rate is 0.5%;

- Services: VAT rate is 5%; Personal income tax rate is 2%;

- Transportation and services associated with goods: VAT rate is 3%; personal income tax rate is 1.5%;

- Other business activities: VAT rate is 2%; Personal income tax rate is 1%.

Officers of Vinh Tax Department handle work. Photo: Quang An

In addition, individuals doing e-commerce business with a business revenue of over 100 million VND/year and a fixed business location must pay the business license fee according to regulations (from 300,000 VND/year to 1,000,000 VND/year depending on the revenue level). For individuals doing e-commerce business with a business revenue of 100 million VND/year or less and no fixed location, they are exempt from paying the business license fee.

Regarding tax registration and declaration, individuals with e-commerce business activities should directly contact the Tax Department where they reside for instructions on tax registration and declaration and payment according to regulations.