Implementing Guidelines on E-commerce and Digital Businesses: Circular 80

Posted by Written by Thang Vu Reading Time: 3 minutes
  • Vietnam issued Circular 80 guiding the implementation of the Law on Tax Administration.
  • While Circular 80 focuses on several tax aspects we will focus on e-commerce and digital businesses.
  • Circular 80 comes into effect on January 1, 2022.

Vietnam’s Ministry of Finance (MoF) recently issued Circular 80/2021/TT-BTC (Circular 80) guiding the implementation of the Law on Tax Administration in 2019 (Law 38/2019/QH14). Circular 80 goes into effect on January 1, 2022, and contains several chapters with detailed instructions for the implementation of tax formalities.

We will focus on one of the most important chapters, which provides guidance on tax administration for e-commerce business activities based on digital platforms as well as other types of service provision from overseas business entities without a permanent establishment in Vietnam.

Circular 80 highlights

Circular 80’s guidance affects the following taxpayers, both directly and indirectly:

  1. Overseas suppliers of goods and service providers who do not have a permanent establishment in Vietnam;
  2. Organizations and individuals in Vietnam who purchase goods and services from overseas suppliers;
  3. Organizations and tax agents who are authorized by overseas suppliers to register, declare and pay taxes in Vietnam; and
  4. Commercial banks and payment intermediary service companies.

Overseas suppliers of goods and service providers are required to register for a tax identification number in Vietnam as well as for the first direct declaration with the local tax authority. The declaration can be done by themselves or via an authorized representative in Vietnam such as a tax agent. The first direct declaration can be registered using form 01/NCCNN. The following periodic declarations can be done using form 02/NCCNN. The applicable tax rates depend on the activities and fees charged.

If the overseas suppliers of goods and service providers do not register appropriate and conform with tax declaration as required by the tax authority, the tax administration will be conducted as follows:

Previously, the withholding tax was only applied when a business-to-business (B2B) transaction occurs, which means that a local company in Vietnam was responsible to declare, withhold and remit withholding taxes on payments made to foreign goods suppliers and service providers under the foreign contractor tax (FCT) regulations (with some exceptions).

As per Circular 80 from January 2022, business-to-consumer (B2C) transactions will also be subject to withholding taxes. This means that foreign businesses who earn Vietnam-sourced income from Vietnamese individuals through digital platforms will also have to pay taxes in Vietnam. A few examples of such businesses are Netflix and Steam as well as online traders on digital market platforms such as Amazon and eBay.

GDT likely to play bigger role in implementation

The responsibilities of tax declarations, withholdings, and remittance from B2C transactions will be performed by commercial banks as well as payment intermediary service companies. The General Department of Taxation (GDT) will notify the names and website addresses of unregistered overseas suppliers to the local headquarters of commercial banks and payment intermediary service providers for tax withholding purposes.

Commercial banks and payment intermediary service providers will be responsible to declare and pay withholding taxes to the local tax authority on a monthly basis using form 03/NCCNN enclosed in Appendix I of Circular 80. The due date for tax declaration and remittance is on the 20th day of each month.

If the B2C transactions are carried out via credit cards or other payment methods, where tax cannot be withheld by commercial banks and payment intermediary service providers (such as PayPal), the banks will be required to monitor and report such payments to the GDT on a monthly basis using form 03/NCCNN enclosed in Appendix I of Circular 80. The due date for tax declaration and remittance is on the 10th day of each month.

Plan ahead for January 2022

While the next steps by the GDT are unclear, it is likely that it will prepare a list of unregistered overseas suppliers and proceed with mandatory measures to enforce tax compliance for their Vietnam-sourced income. In such cases, the tax may likely be levied on the customers who make payments to those unregistered overseas suppliers.

Most local customers would be unwilling to pay both the overseas suppliers and the associated local tax arising from their own payments. Therefore, it is likely that they will avoid purchasing from unregistered overseas suppliers in the future.

We will update when there is further official guidance from the GDT. However, we recommend that businesses study the new Circular and prepare to be compliant in the new year.


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Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in HanoiHo Chi Minh City, and Da Nang. Readers may write to vietnam@dezshira.com for more support on doing business in Vietnam.

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