On November 19, the National Assembly Standing Committee gave opinions on explaining, accepting and revising the draft Law amending and supplementing a number of articles of the Securities Law; Accounting Law; Independent Audit Law; State Budget Law; Law on Management and Use of Public Assets; Tax Management Law; Law on National Reserves (1 law amending 7 laws).
Regarding the amendment to the Law on Tax Administration, Chairman of the Finance and Budget Committee Le Quang Manh said that the draft amended law removes the phrase "no permanent establishment in Vietnam" for foreign suppliers operating in e-commerce or on a digital platform.
Accordingly, the draft law stipulates that for e-commerce business activities, digital platform-based business activities and other services performed by foreign suppliers, foreign suppliers are obliged to directly or authorize tax registration, tax declaration and tax payment in Vietnam according to regulations of the Minister of Finance.
Some opinions say that removing the phrase "no permanent establishment in Vietnam" for foreign suppliers operating in e-commerce or on digital platforms is inappropriate.
Regarding this content, during the process of reviewing and finalizing the draft Law, the Reviewing Agency and the Drafting Agency still had different opinions. However, based on the discussion results after the Standing Committee meeting of the Finance and Budget Committee on November 18 and the explanation of the Drafting Agency, the two sides agreed to follow the Government's proposal, accordingly, removing the phrase "no permanent establishment in Vietnam".
In the draft to receive and revise 1 law amending 7 laws, it is also clearly stated that for households and individuals with business activities on e-commerce platforms and digital platforms, the organization that is the manager of the e-commerce trading floor, the manager of the digital platform with payment function (including both domestic and foreign organizations) and other organizations with digital economic activities according to the Government's regulations shall deduct, pay taxes on behalf of households and individuals doing business, and declare the deducted tax amount on behalf of households and individuals doing business.
In case households and individuals doing business on e-commerce platforms or digital platforms are not eligible for tax deduction or payment, they are obliged to directly register for tax, declare tax, and pay tax.
The Government shall specify in detail the scope of responsibility and methods for e-commerce trading floor managers, digital platform managers and other organizations with digital economic activities to deduct, pay taxes on behalf of, and declare deducted taxes for business transactions on e-commerce platforms and digital platforms of households and individuals.
According to the explanatory report of the Ministry of Finance, this regulation requiring e-commerce platforms to deduct, declare, and pay taxes on behalf of others contributes to reducing the number of tax declarations.
At the same time, in general, it will reduce administrative procedure compliance costs for the whole society because there is only one contact point, the trading floor, to deduct, pay taxes on behalf of, and declare tax obligations on behalf of tens, hundreds of thousands of individuals and business households on the floor.
This law is expected to be voted on by the National Assembly on the morning of November 29, taking effect from January 1, 2025.
