On June 30, 2017, the Ho Chi Minh City Tax Department issued a notice regarding the obligation to declare and pay taxes for business activities conducted in the form of e-commerce. The notice contains the following information.
NOTIFICATION
OBLIGATIONS TO REGISTER, DECLARE, AND PAY TAXES FOR BUSINESS ACTIVITIES CONDUCTED THROUGH E-COMMERCE
Based on the Laws on Taxes, Fees and Charges;
Based on the Law on Tax Administration;
The Ho Chi Minh City Tax Department announces the tax registration and tax payment obligations for business activities conducted through e-commerce as follows:
I. For individuals conducting business in goods and services through e-commerce (selling goods and services via the internet, social networks, and other forms of e-commerce)
a- Subjects required to register and declare taxes: Individuals engaged in business with annual revenue from the sale of goods and services from all forms of business (including online business) exceeding 100 million VND are obligated to register and declare taxes.
b- Taxes and fees payable include: Business license fee, value-added tax, personal income tax (and excise tax, environmental protection tax, etc. (if applicable))
Business license fee rates:
+ Revenue exceeding 500 million VND/year: 1.000.000 VND/year;
+ Revenue between 300 and 500 million VND/year: 500.000 VND/year;
+ Revenue between 100 and 300 million VND/year: 300.000 VND/year.
Individuals or newly established businesses that receive tax registration and tax identification numbers within the first six months of the year must pay the full annual business license fee; if established and received tax registration and tax identification numbers, and business registration numbers within the last six months of the year, they must pay 50% of the full annual business license fee.
Value-added tax, personal income tax
* The VAT payable equals (=) the selling price of goods and services multiplied (X) by the VAT percentage rate;
* The amount of personal income tax payable equals (=) the selling price of goods and services multiplied (X) by the personal income tax rate;
The percentage rates for VAT and personal income tax calculated on revenue are determined according to the regulations in Appendix 01 issued with Circular No. 92/2014/TT-BTC, specifically for some types of goods and services:
+ 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 related to 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%.
c- Procedures for registration and tax filing:
– Place of registration and tax payment: at the Tax Office where the individual resides or temporarily resides.
– Tax registration documents are prepared according to the instructions in Clause 7, Article 7 of Circular 95/2016/TT-BTC dated June 28, 2016 of the Ministry of Finance, specifically:
+ Tax registration declaration form No. 03-ĐK-TCT and accompanying schedules (if any);
+ A copy of the Business Registration Certificate does not require authentication;
+ Uncertified copy of a valid Citizen Identity Card or National Identity Card (for individuals who are Vietnamese citizens); uncertified copy of a valid Passport (for individuals who are foreign citizens and Vietnamese citizens living abroad).
– Tax return documents:
+ Business license fee declaration form
+ Tax declaration form 01/CNKD (form issued together with Circular 92/2015/TTBTC dated June 15, 2015 of the Ministry of Finance)
Tax registration documents and tax returns can be submitted directly to the Tax Office or sent by mail.
II. For foreign organizations and individuals (hereinafter referred to as foreign contractors) conducting e-commerce business in Vietnam or having income generated in Vietnam from e-commerce business:
1/ Obligations to deduct, declare, and pay taxes:
Organizations established and operating under Vietnamese law, organizations registered to operate under Vietnamese law, other organizations, and individuals engaged in production and business in Vietnam, when purchasing goods and services, are obligated to deduct tax when making payments to foreign entities and declare and pay tax into the State budget as prescribed.
In other cases, foreign taxpayers are responsible for declaring and paying taxes; foreign taxpayers may register and declare taxes according to regulations through authorized representatives in Vietnam or through tax agents.
2 / Determine the payable tax amount:
The payable tax amount is determined in accordance with the Circular No. XNXX / 103 / TT-BTC dated 2014 / 06 / 8 (applicable to organizations) and Circular No. XNXX / 2014 / TT-BTC dated 111 / 2013 / 15 (applicable to individuals), specifically:
* The payable VAT amount is equal to (=) The revenue from the provision of personal services (X) the percentage of VAT (5%)
* The payable CIT amount (for foreign organizations) is equal to (=) [Selling prices of goods and services minus (-) payable VAT] multiplied by (X) the percentage of corporate income tax;
The table of percentage of CIT calculated on taxable turnover is determined according to the provisions of Item 2 article 13 Circular No. 103 / 2014 / TT-BTC, specifically:
+ Goods supply activities: 1%;
+ Service provision activities: 5%
* The amount of personal income tax payable equals (=) Revenue from providing goods and services multiplied (X) by the personal income tax rate.
The percentage of personal income tax calculated on taxable turnover is determined according to the provisions of Clause 2 17 Circular No. 111 / 2013 / TT-BTC dated 15 / 08 / 2013 of the Ministry of Finance guiding the personal income tax, can:
+ Goods supply activities: 1%;
+ Service provision activities: 5%;
+ Production, construction, transport and other business activities: 2%.
III- Obligations of business establishments to stay in the tax declaration and payment on behalf of foreign-based companies (foreign contractors - foreign contractors) operating in the field of booking in Vietnam in the form of online
Pursuant to the Circular 103 / 2014 / TT-BTC dated 06 / 8 / 2014 of the Ministry of Finance;
Foreign contractors operating in the field of booking in Vietnam by online form are obliged to pay taxes in Vietnam; resident business establishments shall declare and pay taxes on behalf of foreign contractors according to regulations, specifically as follows:
– In cases where customers rent rooms and pay directly to the accommodation establishment in Vietnam, and the accommodation establishment then pays a booking commission to the foreign national, the accommodation establishment is responsible for declaring and paying taxes on behalf of the foreign national.
– In cases where the customer pays directly to the accommodation provider, and the provider then transfers the room payment to the accommodation establishment and retains their commission:
+ In case the accommodation establishment and foreign contractor has signed a contract, the hosting establishment shall notify the foreign contractor of the tax obligations and declare and pay taxes on behalf of the foreign contractor.
+ If the accommodation and foreign contractor has not signed the contract, the accommodation establishment must determine the tax liability of the foreign contractor when signing the contract and the accommodation establishment is responsible for declaring and paying the contractor tax instead of foreign contractors. .
