The Draft Decree will impact the practice of e-commerce providers about being compliant with tax submissions. Provisional CIT obligations at the end of any calendar year will favourably impact companies with high revenue in the last quarter. Some changes related to PIT are introduced as well.

13 May 2022



In February 2022, the Ministry of Finance of Vietnam released a draft Decree on tax administration (Draft Decree) to solicit public comments. The Draft Decree amends some articles of Decree 126/2020 guiding the Law on Tax Administration and Decree 123/2020 on invoices.

In this legal update, we will discuss the noteworthy takeaways from the Draft Decree.

1. Provisional Corporate Income Tax Payment

Currently, Decree 126/2020 requires the provisional corporate income tax (CIT) to be paid before the end of a certain calendar year, for the first three quarters to account for at least 75% of the annual CIT liability. Under the Draft Decree, from the tax year of 2021, the total provisional CIT payment for the four quarters in a fiscal year must not be less than 80% of the total CIT liability of the annual CIT finalisation, which is a favourable change for enterprises with significant income in the last quarter.

2.  E-commerce Platforms’ Tax Withholding Obligations

The Draft Decree provides additional obligations for organisations owning an e-commerce platform depending on the use of the online ordering function and given authorisation. The e-commerce platform owner must declare and pay taxes on behalf of domestic and overseas individuals who sell goods and services on the e-commerce platform via the online ordering function. However, if the seller does not use the online ordering function the e‑commerce platform owner may declare and pay taxes on behalf of the seller if authorised by them. In other cases, the owners of the e-commerce platform are not required to declare and pay tax on behalf of the seller, but are responsible for providing the tax authorities with information about the traders, organisations and individuals who have conducted partially or wholly their supply of goods or provision of services via the e‑commerce platform.

The above requirements, if officially passed, will increase the tax compliance burden of e-commerce platform companies.

3. Personal Income Tax Declaration
3.1 Filing of Declaration

The Draft Decree states that organisations and individuals paying income are not required to file the monthly or quarterly personal income tax (PIT) declaration if there is no PIT withheld in the relevant month or quarter.

3.2 Dividends or Bonuses in the Form of Securities

Under Decree 126/2020, securities companies and commercial banks must withhold and declare PIT when an individual receives dividends in the form of securities, or where an existing individual shareholder receives securities as a bonus. Before Decree 126/2020, the individual was responsible for the PIT declaration and payment of it. The Draft Decree proposes that the above regulation of Decree 126/2020 is only applied from 1 January 2023. If an individual prior to 1 January 2023 receives dividends as securities, or an existing individual shareholder receives securities as a bonus and the securities trading company or commercial banks have not withheld and declared tax on their behalf, such individual shall declare and pay tax directly to the tax authority and shall not be subject to both administrative penalty for late tax filing and interest on late payment.

4.  Deadline for Tax Declaration and Payment

The Draft Decree clarifies that if the deadline for tax declaration, tax payment, and the deadline for tax authorities to handle the tax dossier or enforce tax payment, does not fall on a working day, then such deadline will be on the next working day.

For more information, please contact:

Duc Tran / Associate

© 2022 ACS Legal Vietnam Company Limited – All rights reserved

This legal update is not an advice and should not be treated as such.

Download pdf: Changes in Payment, Declaration and Filing Requirements for CIT and PIT

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