The Ministry of Finance is drafting a Decree guiding the implementation of a number of articles of the Law on Value Added Tax (drafted for the second time), including regulations on tax obligations of e-commerce platforms.
According to the draft, e-commerce platforms with payment functions will have to deduct value added tax (VAT) and personal income tax (PIT) before paying to business households and individuals. This regulation applies to transactions that generate revenue from the sale of goods and service provision on digital platforms.
The organization managing the e-commerce platform will act as an intermediary, fulfilling tax obligations on behalf of sellers. This is to ensure full tax collection, avoiding budget losses from e-commerce transactions that are developing strongly.
In addition, the draft also expands the scope of tax payables, including digital platforms with payment functions, intermediary platforms connecting services, digital content platforms, online advertising, storage services and cloud computing.
This proposal is expected to have a big impact on online business activities, especially individuals and small business households on e-commerce platforms. Currently, the Ministry of Finance is soliciting comments on the draft before submitting it to the Government for approval.
