A company selling through e-commerce platforms issues its own invoices and files its own VAT and corporate income tax returns. The platform only withholds and pays tax on behalf of household businesses, individual businesses, and foreign suppliers, under Decree 252/2026/ND-CP, effective July 1, 2026.
So what’s left for you? You issue an e-invoice for every transaction under Decree 254/2026/ND-CP, report revenue before platform fees are deducted, and handle tax correctly on advertising and services bought from foreign suppliers.
Legal Framework and Categories of Online Sellers
Online business is governed by the Law on Tax Administration No. 108/2025/QH15 and its implementing decrees. Each category of seller calculates and pays tax differently:
- Domestic companies (LLCs, joint stock companies, including FDI enterprises): You file VAT under the credit method and make quarterly provisional CIT payments. The platform doesn’t withhold tax automatically for this group. You keep your own books, issue output invoices, and file the annual finalization return.
- Household businesses and individual businesses selling online fall under a separate tax management mechanism, in which the e-commerce platform withholds and pays tax on each transaction. This article covers company obligations only.
- Foreign suppliers (Google, Meta, TikTok, Netflix, and others): They register, declare, and pay tax through the tax administration system on Vietnam-sourced revenue that a Vietnamese party or the platform operator hasn’t already withheld and paid.
How Platform Withholding Works Under Decree 252
A platform operator with both an online ordering function and a payment function withholds, declares, and pays VAT and PIT on behalf of household businesses and individual businesses on each transaction. For foreign suppliers doing business on the platform, the operator withholds and pays VAT and CIT (Article 43 of Decree 252).
Domestic companies that open a store, including official brand stores on Shopee Mall, LazMall, and TikTok Shop Mall, fall outside the platform withholding scope. The platform remits sales proceeds after deducting service fees, while the company issues its own invoices, files its own returns, and pays its own tax.
A withholding platform declares the tax withheld monthly, retains transaction data, and provides information when the tax authority asks (Articles 45 and 46 of Decree 252).
Taxes an E-commerce Company Must Declare
E-commerce companies, FDI enterprises included, declare three main taxes. Each has its own pressure point when you sell through platforms.
VAT
The rate is 8% (through December 31, 2026) or 10%, depending on the type of goods or services. You file monthly or quarterly under the credit method. Taxable revenue is the selling price excluding VAT, after valid deductions, and it must match the total of e-invoices issued. For more detail, see our guide to VAT for FDI enterprises.
CIT
The standard rate is 20%, or 15–17% depending on company size. You make provisional payments quarterly and finalize annually. Revenue for CIT is the selling price before platform fees, payment fees, and shipping fees. Book those fees separately as expenses once you hold a valid invoice.
PIT
A company withholds PIT when paying employees and individual contractors. For an e-commerce company, PIT withholding depends on how you engage KOLs, KOCs, and affiliates:
- Hiring through the platform’s affiliate program: You pay commissions and service fees to the platform and receive an invoice issued by the platform. The platform pays the KOLs and KOCs directly, so withholding on those payments sits with the platform. Because you don’t pay the individuals yourself, you don’t withhold PIT, but keep the program terms and the platform’s commission invoices as supporting records.
- Hiring through a KOL management agency: The agency invoices the company for services. You don’t withhold PIT because the payee is an organization.
- Contracting directly with individuals (no labor contract, or a contract under 3 months): From July 1, 2026, you withhold 10% on payments of VND 5 million or more per payment (Article 50(2) of Decree 253/2026/ND-CP). Eligible individuals can submit a commitment form to defer withholding. Keep the service contract, the acceptance record, and the tax withholding certificate on file.
- Employees on labor contracts of 3 months or more (livestream hosts, store operators): Their income counts as salary, withheld under the 5-bracket progressive scale. Details are in our PIT guide for employers.
E-invoice Rules for Each Online Transaction
E-invoices are the first thing tax authorities check at an e-commerce company, and they underpin your VAT return. Decree 254/2026/ND-CP, effective July 1, 2026, sets three principles:
- Invoice type: E-commerce companies use e-invoices with or without a tax authority code. Retail businesses that sell directly to consumers and fall within the designated list use invoices generated from cash registers.
- B2C transactions where the buyer declines an invoice: You must still issue an e-invoice. Record buyer details from the information the buyer supplies. Some special cases have their own issuance timing, for example prepaid telecom service cards, which use a consolidated end-of-day invoice.
- Issuance timing: You issue the invoice when ownership or the right to use the goods passes to the buyer, whether or not payment has been collected. A COD order is therefore invoiced when you hand over the goods, not when the cash arrives (Article 9(1) of Decree 254). If the customer returns goods or cancels an order, handle the issued invoice as set out in our e-invoice guide.
Foreign Contractor Tax on Cross-border Advertising and Digital Services
Online advertising (Facebook Ads, Google Ads, TikTok Ads) and cloud or software services (AWS, Microsoft Azure, SaaS) are taxed differently depending on where the purchase takes place. For direct contracts, foreign contractor tax (FCT) applies as usual:
- Purchases on an e-commerce platform: A company that applies the VAT credit method and buys goods or services from a foreign supplier on an e-commerce platform must withhold and pay CIT, plus VAT on the service portion, when it pays (Article 43(3) of Decree 252). The Vietnamese company withholds here, not the foreign supplier.
- Purchases under direct contracts: Cloud and software services contracted directly with a foreign supplier follow standard FCT rules. Whether online advertising falls under one mechanism or the other depends on whether the transaction occurs on an e-commerce platform or under a direct contract.
- Electronic notification and tax registration: Once you’ve withheld and paid on a transaction on a platform that has both ordering and payment functions, you notify the platform operator electronically so it doesn’t withhold again on the same transaction. Include the transaction code, transaction value, and tax withheld (Article 43(4) of Decree 252). A foreign supplier whose entire revenue has been withheld and paid doesn’t need to register for tax separately (Article 40 of Decree 252).
Tax Risks and How to Control Them
Tax authorities run automated risk analysis, matching your returns against transaction data from platforms and e-invoice data.
Four Common Risks When Data Is Reconciled
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Revenue on the return is lower than platform data. The usual mistake is recording revenue at the amount the platform transfers. Illustration: an order priced at VND 1,000,000 (excluding VAT), with VND 150,000 in platform fees, leads to a transfer of VND 850,000. Revenue must be recorded at VND 1,000,000, and the VND 150,000 goes to expenses against the platform’s service fee invoice.
Control: Reconcile the platform’s payment reports against bank statements monthly. Bank statements usually lump many orders together, while platform reports list each order, each fee type, and each return. Vouchers on TikTok Shop and Shopee must be split by who funds them. Example: a product costs VND 1,000,000 and the customer uses a VND 100,000 voucher. If the platform funds the voucher, revenue stays at VND 1,000,000 because the platform compensates the shop for the difference. If the shop funds it, revenue is VND 900,000, with the discount shown on the invoice.
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Invoices issued at the wrong time, or missed. COD orders are often invoiced when cash arrives, when the correct moment is hand-over of the goods. B2C orders where the customer declines an invoice are also easy to miss.
Control: Integrate your order management or ERP system with your e-invoice software so invoices issue on the date goods are handed over. Returns and cancellations after an invoice is issued must be handled under the rules on invoice adjustment and replacement.
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Money and expenses passing through personal accounts. COD cash or online transfers go to a director’s or employee’s account without being declared. Facebook and Google ads paid by the director’s personal card are easily excluded from expenses if the payment documentation conditions aren’t met.
Control: Route all sales proceeds and COD cash into accounts held in the company’s name. Pay for advertising with a company card or account.
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Negative inventory on the books. Platform order data often doesn’t sync with warehouse data in time. If stock-out is recorded from platform orders while incoming goods or returns haven’t been booked, goods sold on the books exceed documented purchases. Tax authorities usually ask for an explanation of where these goods came from, and the related cost of goods sold can be excluded from deductible expenses.
Control: Sync inventory across the platform, your order management software, and your accounting software. Record goods receipt as soon as goods arrive, with the purchase invoice. Restock returns according to platform reports, and count physical inventory against the books monthly.
Deductible Expenses Specific to E-commerce
An expense is deductible if it serves business operations, is backed by a valid invoice or document, and is supported by non-cash payment for payments of VND 5 million or more per payment (Article 9(1) of Decree 320/2025/ND-CP). Missing proof of non-cash payment also forfeits input VAT deduction. Two expense types are often rejected at finalization:
| Expense Item | Required Documents | Common Reason for Rejection |
|---|---|---|
| Platform service fees | Monthly e-invoice issued by the platform operator | Invoice shows the wrong company name or tax code |
| Samples and promotional free gifts | Promotion program records and promotion procedures under current regulations | Giveaways without valid promotion records |
For purchases from foreign suppliers covered in the FCT section above, CIT that your company pays on their behalf counts as an expense only when the contract states that the amount the foreign party receives excludes CIT.
Penalties
Failing to issue an invoice when selling goods or services is fined VND 1 million to VND 80 million for organizations, depending on the number of invoices (Article 24(3) of Decree 125/2020/ND-CP, as amended by Decree 310/2025/ND-CP). Tax evasion leads to recovery of the full evaded amount, late payment interest at 0.03% per day, and a fine of 1 to 3 times the evaded tax. Large-scale or repeated evasion can be prosecuted under the Criminal Code.
Indochina Link Vietnam helps e-commerce companies review multi-channel revenue, reconcile platform data, standardize advertising expenses, and finalize taxes. Explore our corporate tax compliance services or contact us directly for advice.
Content based on Law on Tax Administration No. 108/2025/QH15, Decree 252, Decree 254, Decree 320, and Decree 125. Current as of October 2026. E-commerce tax rules change quickly, so seek professional advice before applying them.
