In order to simplify tax procedures and strengthen management of business activities in the digital environment, the Government has issued Decree 117/2025/ND-CP effective from July 1, 2025, clearly stipulating the responsibility of withholding, declaring and paying taxes on behalf of e-commerce platforms for individuals and online business households.
DNP Viet Nam Law Firm will provide FDI enterprises with information on this issue!
1. Applicable subjects:
Legal basis: Article 2 of Decree 117/2025/ND-CP
- Organize the management of e-commerce floors and digital platforms with payment functions (both at home and abroad), organizations with digital economic activities.
- Resident and non-resident households and individuals doing business on this platform.
- Tax authorities and related organizations.
2. Mechanism for tax deduction and payment:
2.1 Which entities must deduct and pay taxes on behalf of:
Legal basis: Article 4 of Decree 117/2025/ND-CP
Organizations managing domestic and foreign e-commerce platforms that are subject to deduction and payment of tax or digital platforms with payment functions will deduct and pay VAT and personal income tax on behalf of each transaction of households and individuals.
2.2 Time of deduction:
Legal basis: Clause 1, Article 5 Decree 117/2025/ND-CP
Tax is deducted immediately upon successful transaction and payment acceptance for sales of goods and services on e-commerce platforms for households and individuals.
2.3 Applicable tax rates:
Legal basis: Clause 2, Article 5 Decree 117/2025/ND-CP.
| Tax Type / Subject | Goods | Service | Transport, services associated with goods |
| VAT | 1% | 5% | 3% |
| Personal Income Tax – Resident Individuals | 0.5% | 2% | 1.5% |
| Personal Income Tax – Non-resident Individuals | 1% | 5% | 2% |
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3. Households and individuals doing business on e-commerce platforms. Not available Payment function must self-declare and pay taxes:
3.1 For households and individuals doing business on e-commerce platforms with a residence:
Legal basis: Article 8 of Decree 117/2025/ND-CP
- Directly perform obligations for value added tax, personal income tax, special consumption tax, environmental protection tax, resource tax and other revenues payable to the state budget managed and collected by tax authorities according to regulations.
- Declaration method: monthly.
—> In case, Irregular business must be declared on a case-by-case basis.
- Tax declaration documents: Tax declaration for households and individuals with business activities on e-commerce platforms according to Form No. 02/CNKD-TĐMT issued with this Decree.
3.2 For households and individuals doing business on e-commerce platforms without residence:
Legal basis: Article 9 Decree 117/2025/ND-CP
- Directly pay value added tax and personal income tax on goods and services traded on e-commerce platforms as a percentage (%) of revenue.
- Declare value added tax on domestic sales of goods, provision of services on e-commerce platforms, personal income tax and pay taxes to the E-commerce Tax Department per occurrence by electronic means.
- Register for electronic tax transactions, first-time tax registration through tax declaration documents.
- Tax declaration documents: Tax declaration for non-resident individuals doing business on e-commerce platforms according to Form No. 03/CNNN-TMĐT issued with this Decree.
4. Tax refund documents and procedures:
Legal basis: Article 10 Decree 117/2025/ND-CP
- In case the floor has deducted and paid tax instead: If a household or individual has annual revenue that is not subject to VAT and personal income tax, after the e-commerce platform has completed its declaration and payment obligations, the individual can apply for a tax refund for the deducted tax.
- In case households and individuals pay taxes themselves: If a household or individual has self-declared and paid taxes during the year but the total revenue is not subject to tax, they will be refunded the excess tax paid according to tax management laws.
5. Responsibility for providing information of households and individuals doing business on e-commerce platforms:
Legal basis: Article 11 of Decree 117/2025/ND-CP
- Households and individuals residing and doing business on e-commerce platforms must self-declare and pay other taxes such as: special consumption tax, environmental protection tax, resource tax, according to the law.
- Business households and individuals are responsible for providing complete and accurate information to the e-commerce platform:
+ Tax code or personal identification number (Vietnamese citizens);
+ Passport number or valid identification information (foreign citizens);
+ Mandatory information for sellers according to e-commerce regulations;
+ Documents related to tax obligations when the floor is responsible for deducting and paying on behalf.
Decree 117/2025/ND-CP marks an important reform step in tax management for e-commerce activities, helping to reduce procedures for individuals and business households when e-commerce platforms deduct and pay VAT and personal income tax on their behalf. However, businesses still need to proactively provide complete and accurate information and fulfill their obligations to other types of taxes in accordance with regulations to ensure their rights and avoid legal risks.
(Form No. 02/CNKD-TĐMT)
(Form No. 03/CNNN-TMĐT)
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