Khóa luận tốt nghiệp Luật học: Law on tax for individual taxpayers engaged in e-commerce activities in Vietnam

In Vietnam, current legal regulations state as follows: According to the 2022 Report by the Vietnam E-commerce and Digital Economy Agency Ministry of Industry and Trade: “E-commerce is a

MINISTRY OF JUSTICE MINISTRY OF EDUCATION & TRAINING

HANOI LAW UNIVERSITY

MINISTRY OF JUSTICE MINISTRY OF EDUCATION & TRAINING

HANOI LAW UNIVERSITY

Supervisor's Confirmation

DECLARATION

I hereby declare that this is my own research work, and allconclusions and data presented in this graduation thesis aretruthful and reliable

Author of the Graduation Thesis(Signature and full name)

Le Phuong Anh

il

LIST OF ABBREVIATIONAPEC : Asia — Pacific Economic Cooperation

EC : European Commission

VAT : Value — Added Tax

WTO : World Trade Organization

1H

TABLE OF CONTENTS

Page

Inner Cover Page i Declaration HÌList OfAbbreviation ilTable Of Contents ivINTRODUCTION sccssnassesssacncucmmnmasnnen ` 1CHAPTER 1: THEORETICAL ISSUES REGARDING E-COMMERCE ACTIVITIESAND LAW ON TAX MANAGEMENT FOR INDIVIDUAL TAXPAYERS IN E-COMMERCE ACTIVITIES IN VIVTNAM che 61.1 Theoretical issues regarding e-commerce aCfÏYÏf©s -cà neo 61.1.1 Concept of vo cố 61,125 Characteristics Of @-cO MCC cis nrasisinsavcenainencrnneiencnenusevamnencemmnnnanenmnieaunaner 8

PR Os ie gee, 101,14, Role of €-conner06 201V: nssesssnseeesenniaooaatoiioEHEEOIUHSEELEESESLEBEGLDEEESEGGG.EDSSEL 131.2 Theoretical issues regarding tax management law for individual taxpayers engaged inE-COMMECTCE ACH VIN CS ve csescicsses researc cence sax ana 151.2.1 The concept and characteristics of tax management for individual taxpayers in e-S9000ả =9 151.2.2 The concept and content of tax management law for individual taxpayers in e-SOULS) rn 171.2.3 Tax management law for individual taxpayers engaged in e-commerce activities

in several countries world wWide : cccceccessseeseeeeseeeeseeceaceecueeaeeeesesseceseeseeeaceacueeeees 20CHAPTER 2: LAW ON TAX MANAGEMENT FOR INDIVIDUAL TAXPAYERS IN E-COMMERCE ACTIVITIES IN VIETNAM 00 ccceccceeceesesceeseceeeeeseeceeeensesceetaesesseesaceaeaees 232.1 Legal regulations related to tax management for individual taxpayers in e-commerce

activities in Vietmamm 8n" 23

2.1.1 Regulations on tax registration for individual taxpayers in e-COITIIKTCe 23

1V

2.1.2 Regulations on tax declaration, payment obligations, and tax refunds for individualFARDAVSTS IT É CGITHHTẨIETÔiisennssukdindoesdebdseossgicdSSSGGIE.AX0045124485610446061034506101444333543835684S000252.1.3 Regulations on tax refunds, tax exemptions and reductions for individualtaAXPAYe 6511-1)1117/11J) 2001088 302.1.4 Regulations on tax inspection and audit in e-commerce activities for individual5t; 5n ii:':iiAA‡êiỉ+ằ⁄“53Ó5-Ó5Ó54Ó545454ÓÖ5Ó5ÓỎÓ3Ö53444 332.1.5 Regulations on handling violations, complaints, denunciations, and lawsuits forindividual taxpayers 11 C-COMMELCE ACfTVIÍICS Gà LH 1S S141 H1 12H 1611111 4 1x12362.2 Current status of tax management law enforcement for individual taxpayers in e-commeerce acfivi(iesin VietMAMM :cccccccccsccsesccsesccsseeescceseeensserseteessssenscessscessersescenserses 392.2.1 Achievements in implementing tax management laws for individual taxpayers in e-COTTITI€TC€ ACTIVITIES 0 eee ¿5 S14 11T T1” TH TH TT Hàn HT HT Lá Hà HT HH ke 392.2.2 Difficulties and limitations in implementing tax management laws for individualtAXPAYELS IN C-COMMMELCE ACTIVILICS :cecsesseessteesersessencnssesasssssessssesssossassnenssassassnsasnesnest 42CHAPTER 3: SOLUTIONS TO IMPROVE LAW ON TAX MANAGEMENT FORINDIVIDUAL TAXPAYERS IN E-COMMERCE ACTIVITIES IN VIETNAM 503.1 General orientations for improving tax management law for e-commerce in Vietnam

3.2 Solutions to improve tax law for individual taxpayers in e-commerce in Vietnam 533.3 Solutions to enhance the implementation of tax management law for individualtaxpayers in e-commerce IN YÏefrnaim 6 S2 2v 39 111111 1e 1xepxesreeriee 58

Ce uy 3 1 62REFERENCES 1 64

1 The urgency of the topic

The development of e-commerce globally in general and in Vietnam in particular hasbrought significant changes to traditional business methods and commercial transactions,accompanied by tremendous benefits for business entities, consumers, and society as a whole

In recent years, e-commerce activities in Vietnam have made remarkable progress In

2024, our country’s socio-economic development and the entire industry and trade sectorunfolded in a global context with many significant and unpredictable fluctuations, accompanied

by both opportunities and challenges regarding the research situation related to the topic.Nevertheless, e-commerce continued to maintain a growth rate nearly three times higher thanthat of traditional commerce globally, contributing approximately 20% to total retail sales ofgoods and services in 2024 Southeast Asia continues to be the region with the highest growthrate in e-commerce and digital economy worldwide Specifically for Vietnam, e-commercemaintained an impressive growth rate of 18-25% annually In 2024, the e-commerce market size

quickly surpassed $25 billion, an increase of 20% compared to 2023, accounting for

approximately 9% of the total retail sales of goods and consumer service revenue nationwide.The proportion of e-commerce accounts for two-thirds of Vietnam's digital economy value.Vietnam's e-commerce and digital technology growth rate continues to maintain solid double-digit growth, ranking among the top 10 countries with the highest e-commerce growth rates inthe world, creating momentum for digital economy development and leading digital

transformation in business and commerce!

Along with the strong and rapid development of e-commerce, the issue of taxmanagement for these activities has become increasingly urgent and more challenging than everbefore The primary cause is the increase in tax evasion behaviors in the e-commerce sector.Although legal regulations on tax management have been and are being improved, withimportant legal documents such as Tax Administration Law No 38/2019/QH14 passed by theXIV National Assembly on June 13, 2019, and Decree No 52/2013/ND-CP on e-commerce

' “The proportion of e-commerce accounts for 2/3 of the value of Vietnam's digital economy”, The electronic

portal of the Ministry of Industry and Trade, https://moit

gov.vn/tin-tuc/hoat-dong/hoat-dong-cua-cac-don-Y1/cuc-thuong- mai-dien-tu-va-kinh-te-so-to-chuc- yu-nam-

hoi-nghi-tong-ket-cong-tac-nam-2024-va-trien-khai-nhiem-2025.html#:~:text=N%C43%s83 m3202024%2C%20qguy%20m%C33%B4%20th%E1%BB%8B.kinh%20(%EL

%BA%BFE%20s%E13%6BB%591%20Vi%E1%BB%871%20Nam., accessed on 10/1/ 2024.

1

issued on 16/5/2013 (together with amendments and supplements stipulated in Decree No.85/202 1/ND-CP on 25/9/2021), the unique characteristics and nature of the digital economy aswell as the rapid development of e-commerce in Vietnam have revealed that tax administration

in this field still faces considerable difficulties

One of the greatest challenges is the ability to comprehensively manage the revenue and

expenditure sources of business entities, thereby accurately determining their revenue and tax

obligations This becomes even more complex when e-commerce transactions primarily occur

online, independent of traditional physical facilities such as shops or stores Additionally, servers

storing data may be located abroad, making tax monitoring and inspection increasingly difficult.Furthermore, an entity may open multiple stores on the same e-commerce platform or even

across different platforms, simultaneously participating in business activities on various social

media platforms Therefore, identifying taxable subjects and taxpayers in the electronic

environment becomes a significant challenge for tax authorities Moreover, the robust

development of online business forms has created numerous gaps in controlling transactions and

cash flows, making it difficult to ensure that all business activities are monitored and fully taxed,

contributing to creating fairness in the national tax system

For the reasons and realities mentioned above, researching the topic: “Legal Framework

jor Tax Administration of Individual Taxpayers in E-commerce Activities in Vietnam” has

significance theoretically and practically to contribute to the evaluation and improvement oflegal regulations governing this field

2 Literature review

The issue of tax management for e-commerce in general, as well as specific research on

tax management for individual e-commerce taxpayers, has been addressed in various studies,articles, and scientific journals Notably:

Firstly, the doctoral dissertation in economics by Pham Nu Mai Anh (2019) at the

Academy of Finance, titled “Zax Management for E-commerce in Vietnam” outlined

fundamental issues of tax management in e-commerce activities The study focused on taxauthorities’ management of e-commerce in Vietnam and proposed measures for improvement.However, the dissertation emphasized economic aspects rather than legal perspectives on e-

commerce tax management.

Secondly, the Master’s thesis in Law by Ton Nu Phuoc Duyen (2022), titled “Tax LawsJor the Sale and Supply of Goods on E-Commerce Platforms by Businesses and IndividualTraders: A Case Study in Quang Neai Province” in 2022 at the University of Law, Hue

University The thesis focuses on examining the legal framework governing tax management

for the sale and supply of goods through e-commerce platforms by businesses and individual

traders By analyzing the practical application and enforcement of these tax Jaws in Quang Ngai

Province, the study identifies challenges and opportunities within the current system Based on

these findings, the thesis proposes a range of solutions aimed at improving the legal framework

for tax management in e-commerce activities These recommendations are designed to enhancethe alignment of tax laws with the practical demands of managing e-commerce activities and to

support the growth and regulation of e-commerce within Quang Ngai Province

Thirdly, the scientific journal titled “Overview ofLegal Provisions and Some Difficulties

on Managing Tax Towards Individuals and Business Households on E-commerce Trading

Platforms Under Vietnamese Law” by authors Pham Huynh Bao Oanh and Doan Thanh Tho,

published by Ho Chi Minh City University of Economics and Finance in 2024 The document

analyzes the legal provisions and challenges in tax management for e-commerce in Vietnam Ithighlights rapid e-commerce growth, the evolving tax laws, and the increasing complexity ofensuring comphance among individual and business taxpayers Challenges include unclearregulations, difficulties in identifying taxable entities, and limited enforcement tools The paperalso discusses international best practices and proposes reforms such as enhanced digitalinfrastructure, simplified procedures, and better interagency coordination to improvecompliance and efficiency

Fourthly, the study titled “Tax Declaration Decisions on Social Networks of Online

Retailers: A Case Study in Vietnam” by authors Le Xuan Cu and Nguyen Tran Hung was

published in the online journal kuey.net, under the section Educational Administration: Theoryand Practice The article specifically explores the tax declaration decisions of online retailers onsocial media platforms in Vietnam It examines factors influencing compliance, such asawareness of tax policies, perceived fairness of the tax system, and enforcement measures The

study highlights the challenges faced by tax authorities in managing e-commerce taxation and

provides recommendations to improve compliance These include better communication of tax

policies, strengthening enforcement mechanisms, and simplifying tax procedures

3

3 Objectives of the research

This thesis is developed based on the following objectives:

Firstly, to identify and clarify the fundamental theoretical aspects of tax managementlaws for individual taxpayers engaged in e-commerce activities in Vietnam

Secondly, to analyze the content and current state of legal regulations on tax

management for individual e-commerce taxpayers in Vietnam

Thirdly, to propose solutions to improve tax management laws for individual commerce taxpayers in Vietnam

e-4 Scope and subject of the research

Research Subjects:

The research subjects of this thesis include theoretical aspects related to e-commerceactivities and tax management regulations applicable to individual e-commerce taxpayers inVietnam

Scope of Research:

i Scope of Content

Regarding international trade, the thesis analyzes and clarifies the concepts andcharacteristics of this activity, provides an overview of international trade models, and highlightsthe role of e-commerce in Vietnam's socio-economic development

Regarding tax laws for individual e-commerce taxpayers, the thesis focuses on analyzingand studying the legal foundations related to this issue, thereby proposing solutions and

recommendations to improve relevant legal regulations

it Scope of Space and Time

The thesis examines tax management laws applicable to individual e-commerce

taxpayers across the entire territory of Vietnam over a five-year period (from 2020 to the

present)

5 Research method

The thesis applies various research methods, including analytical method, enumeration

method, synthesis method, statistical method, and comparative method for data, figures, and

related information

The figures and parameters are extracted from theses, dissertations, and scientific articles

that have been published in previous research Additionally, the author also references and

4

utilizes materials from international articles, teaching curricula fromreputable universities, alongwith authoritative and reliable information sources from websites and online databases.

6 Scientific and practical significance of the research

The research results of the thesis provide contributions in both theoretical and practicalaspects as follows:

First, regarding the theoretical aspect: Although the thesis does not directly focus on

resolving theoretical issues related to tax management for e-commerce, the researchresults fromthis topic have contributed to further clarifying the theory of tax management in e-commerce,particularly the legal theory of tax management for individuals participating as taxpayers in the

e-commerce sector.

Second, regarding the practical aspect: The thesis has delved deeply into analyzing issuesrelated to tax management regulations for individual taxpayers in e-commerce activities inVietnam On this basis, the research has proposed practical solutions aimed at improving theeffectiveness of applying tax management laws for individual taxpayers in the e-commerce

sector in Vietnam today

7 Structure of the research

Apart from the cover pages, table of contents, introduction, conclusion, references, andappendices (if any), the thesis is structured into the following three chapters:

Chapter 1 Theoretical issues regarding E-commerce activities and law on tax

management for individual taxpayers in E-commerce activities in Vietnam

Chapter 2 Law on tax management for individual taxpayers in E-commerce activities

in Vietnam

Chapter 3 Solutions to improve law on tax management for individual taxpayers in commerce activities in Vietnam

E-CHAPTER 1: THEORETICAL ISSUES REGARDING E-COMMERCE

ACTIVITIES AND LAW ON TAX MANAGEMENT FOR INDIVIDUAL

TAXPAYERS IN E-COMMERCE ACTIVITIES IN VIETNAM1.1 Theoretical issues regarding e-commerce activities

1.1.1 Concept of e-commerce

In the context of globalization, the emergence and development of e-commerce is an

inevitable trend This stems from the increasing demand for commercial transactions, along with

the clear benefits that the internet and electronic devices bring in facilitating global connectivity

Tn today’s era, the exchange and trade of goods between merchants and consumers cannot be

separated from e-commerce tools

When referring to commercial activities in the electronic environment, especiallythrough the global Internet, various terms are often used These include “online trade”,

“paperless commerce” and “e-business” However, the term “e-commerce” is the mostcommonly used and is considered a general convention In this environment, merchants canpromote, introduce, and market their products and services by posting images and videos Onthe consumer side, with just a few simple actions on electronic devices, they can easily searchfor and purchase the products and services they need

From a theoretical perspective, while the term “e-commerce” has been defined by many

international organizations, there is not yet a unified definition of e-commerce Severalrepresentative concepts of e-commerce can be referenced, including:

According to the World Trade Organization (WTO): “Electronic commerce is a newarea of trade involves goods crossing borders electronically Broadly speaking, this is

production, advertising, sale and distribution ofproducts via telecommunications networks’”.

Following the European Commission: “E-commerce can be defined generally as the

sale or purchase ofgoods or services, whether between businesses, households, individuals or

private organizations, through electronic transactions conducted via the internet or other

computer-mediated (online communication) networks”?

2 WTO, “Electronic commerce”,

https://www.wto.org/english/thewto e/whatis e/tif e/bey4 e.htm#:~:text=A%20new %20area%200f%o20trad e,0f%20products%20via%20telecommunications%20networks, accessed on 27/12/2024.

2 European Commission, “Glossary: E-commerce”,

https://ec.europa.eweurostat/statistics-explained/index.php?title=Glossary:E-commerce, accessed on 27/12/2024.

6

Asia-Pacific Economic Cooperation (APEC) presents the following view: “Electroniccommerce refers to commercial transactions for the exchange of goods and services betweengroups (individuals) that are primarily electronic in nature, mainly through Internet-based

systems”,

The three definitions all reflect the development of e-commerce in the context of

globalization and the digitalization of the economy However, each definition has significant

differences in terms of scope, transaction methods, participants, and development trends First,

the WTO focuses on cross-border transactions, emphasizing e-commerce as a new field of trade,

primarily revolving around the production, advertising, sales, and distribution of goods viatelecommunications networks EC, on the other hand, expands the scope to include both goods

and services, not only between businesses but also among individuals, households, and private

organizations, highlighting the role of the Internet and computer-mediated communication

networks Meanwhile, APEC narrows its focus to electronic transactions, defining the Internet

as the core platform, reflecting modern e-commerce trends with the rise of platform economies

and digital commerce Another key difference lies in the scope and participants in e-commerce

activities: WTO emphasizes global trade, EC covers a diverse range of entities and transactiontypes, whereas APEC focuses on the intangible and digital nature of transactions Overall, e-commerce is no longer limited to cross-border trade but has expanded into digital services, onlineplatforms, and the sharing economy, reflecting the transformation in global business models andconsumer behaviors

Meanwhile, some perspectives view e-commerce with a broader and more generalmeaning, suchas:

According to the Model Law on Electronic Commerce of the United Nations

Commission On International Trade Law (UNCITRAL), “Electronic commerce is the

exchange of commercial information through electronic means without the need for paper

documents at any stage ofthe transaction”

The Organization for Economic Cooperation and Development (OECD), 1997, states:

“Electronic commerce encompasses commercial transactions involving organizations andindividuals based on the processing and transmission of digitized data through open networks

4 APEC “Definition of E-Commerce”, _ eCommercelntro/sld003 html, accessed on 27/12/2024.

http://www.isoc-vn.ore/www/archive/010922-SProbst-7

(such as the Internet) or closed networks with gateways to open networks (such as AOL) Inthese transactions, goods and services are ordered through the network, while payment and

delivery can be conducted either directly on the network or nof”P.

In Vietnam, current legal regulations state as follows:

According to the 2022 Report by the Vietnam E-commerce and Digital Economy

Agency (Ministry of Industry and Trade): “E-commerce is amodern business model based on

information technology, enabling businesses and individuals to conduct transactions for goods

and services quickly and conveniently” Meanwhile, Assoc Prof Dr Dang Van Dan, in the

monograph “E-commerce in Vietnam’ (2021), presents a broader perspective: “E-commerce isthe process of conducting economic and commercial transactions through electronic means, in

which activities ranging from advertising, ordering, payment to delivery are all carried out

online ”

The definition from the Vietnam E-commerce and Digital Economy Agency

emphasizes the modernity and convenience of e-commerce as a technology-driven business

model, facilitating fast and efficient transactions In contrast, Assoc Prof Dr Dang Van Dan

offers a more comprehensive view, describing e-commerce as a holistic process encompassingvarious activities, from advertising to delivery, all conducted digitally Both definitionscomplement each other, reflecting the multidimensional nature of e-commerce in theVietnamese context

It can be seen that, in terms of economic nature, e-commerce remains a traditionalcommercial activity, but the fundamental difference lies in the method of transaction execution.This difference is the use of electronic tools to conduct buying, selling, and exchange of goodsand services E-commerce can be viewed as a modern business method that inherits andupgrades traditional commercial activities by leveraging digital technology utilities Thus, e-commetce activities can be defined as follows: E-commerce is the conduct ofpart or all ofbusiness transactions, buying and selling, exchange, marketing, and advertising ofproducts andservices through electronic devices connected to the Internet

1.1.2 Characteristics of e-commerce

> Le Van Tuyen (2022), “E-commerce in Vietnam: Current Situation and Recommendations”, Vietnam Social Sciences Online Journal, https://vjol.info.vn/index.php/khxhvn/article/view/76038, accessed on 27/12/2024.

8

E-commerce has been and continues to develop strongly in the digital age, with uniquecharacteristics that create a distinct nature compared to traditional commerce Specifically:

First of all, e-commerce is intangible Transactions do not take place in a physical

environment but are conducted entirely in an electronic environment, requiring no direct contact

between parties Instead, all exchanges and documentation can be transmitted through computer

data, audio recordings, or other electronic means E-commerce allows everyone to participate in

buying, selling, and trading from temote areas to developed urban areas, facilitating the

reduction of socio-economic development gaps between different regions within a country

Furthermore, e-commerce is a globalized and borderless market It allows transactions to beconducted anytime, anywhere without geographical limitations This creates favorable

conditions for merchants to expand their business scope to international markets and easily

access global customers

Secondly, this activity is both instantaneous and has certain ‘delays’ compared to

traditional commercial transactions This is because e-commerce typically responds

immediately to the need for searching and establishing transactions between parties, but the time

for contract execution and transaction completion is slower compared to direct trading forms

In the field of e-commerce, the contract signing process occurs quickly through theglobal Internet system, but delivery is slower compared to traditional purchasing methods.Unlike buying directly at physical stores, where customers can select, pay for, and take productsimmediately, online transactions require waiting time for receiving goods Most items (exceptdigital products like software) cannot be provided instantly To address these limitations, e-commerce companies are moving towards a breakthrough solution: building networks of localbranches The operating model will be as follows: After customers select products on thewebsite, the system will transfer requests to the nearest stores or branches This significantlyreduces delivery time, enabling same-day delivery This solution aims to address two key issues

in e-commerce: high shipping costs and lengthy waiting times By leveraging local branchnetworks, merchants expect to enhance customer shopping experiences and mmmimizeinconveniences in the goods delivery process

Thirdly, e-commerce activities are characterized by high digitalization and information

transparency The development level of e-commerce depends on the digitalization level and

integration capability of the global economy, reflected through different evolutionary stages

9

This development process occurs in the following stages: starting with the use of email, thensearching for information on the Internet, followed by placing orders and using online services.Nextis building a business website, and finally, applying comprehensive e-commetce solutions.

Moreover, the transaction process is highly automated, minimizing human intervention, thereby

saving time and operating costs Information about products and services is publicly disclosed

clearly and in detail As a result, customers can easily compare prices and quality quickly and

accurately This is a factor thatcontributes to increasing competitiveness in the electronic market

Fourthly, e-commerce offers flexible pricing Flexible pricing is an important strategy of

e-commerce, allowing merchants to quickly adjust product prices based on market factors Themost prominent feature is the ability to change prices in real-time, depending on the balance ofsupply and demand, seasonality, and user behavior E-commerce platforms such as Amazonand Lazada often apply dynamic algorithms to optimize prices, helping to increase profits and

competitiveness The advantages of this strategy include: maximizing revenue, attracting

price-sensitive customers, and quickly responding to market fluctuations

Fifthly, e-commerce activities are dependent on technology and the user's level of

technological proficiency All e-commerce transactions, from buying and selling goods to onlinepayments, take place on a technological platform Therefore, if the technological infrastructure

is not strong enough or unstable, transaction activities will encounter difficulties For example,

if the Internet speed is slow or the security system is poor, transactions may be interrupted orunsafe, reducing user trust in e-commerce Additionally, the technological proficiency ofconsumers is also an important factor affecting participation in e-commerce Consumers need

to have skills in using electronic devices such as computers and smartphones, along with theability to use online payment applications such as credit cards or e-wallets If consumers areunfamiliar with technology or unskilled in using online tools, they will have difficultyconducting transactions This can create a significant barrier to the development ofe-commerce,especially in rural areas or for older people who are not familiar with technology These factorsdirectly affect the ability to access e-commerce activities Consumers in developed countries orareas with better technological infrastructure will easily participate in e-commerce, while in

developing regions, access to technology may be limited, leading to a disparity in participation

in this market

1.1.3 Models of e-commerce activities

10

E-commerce has now developed into a diverse field with many different models, eachwith its own characteristics and applications suitable for each participant To better understandthis development, we can analyze each popular model in e-commerce in more detail.

B2C model (Business to Consumer):

The B2C model is the most common form of e-commerce, in which businesses provide

goods or services directly to consumers through online platforms Typical examples of this

model are e-commerce sites like Amazon, eBay, or online stores of well-known brands like

Zara, Nike The B2C model has created great convenience for consumers, who can easily

search, compare, and shop for products from anywhere without having to go toa physical store.According to experts from the United Nations Conference on Trade and Development, the retail

sales of the e-commerce sector increased from 16% to 19% in 2020, while the B2C e-commercerevenue of the world’s top 13 companies reached $2.9 trillion in 2020°.

However, for businesses, the B2C model also requires them to invest heavily in online

marketing and optimize the user experience to compete in the vast market An important factor

that businesses need to focus on is improving online payment systems and ensuring security for

consumers In addition, businesses must also manage the delivery process and customer supporteffectively to maintain customer loyalty and increase revenue growth

B2B model (Business to Business):

The B2B model is the transaction between businesses, especially in providing rawmaterials, input products, or support services to other businesses This is an e-commerce modelwith large transaction values and is an important foundation of manufacturing industries, serviceproviders, or large commercial enterprises Platforms like Alibabas 1688.com and DHgate.com

are typical examples of the B2B model’ One of the prominent features of the B2B model is the

complex transaction process, which often requires long-term contracts, large quantities, and clearpayment terms This model creates opportunities for businesses to optimize the supply chain,reduce costs, and increase production efficiency However, businesses participating in the B2B

© Ghazwa Hassna, Kamel Rouibah (2023), “The roles of user interface design and uncertainly avoidance in

B2C ecommerce success: Using evidence from three nation cultures”, Electronic Commerce Research and

Applications Volume 61,https://www.sciencedirect.com/science/article/abs/pii/$1567422323000625?via%o3Dihub, accessed on

02/1/2025.

7 Miyan Liao, Jiaming Fang (2023), “Boosting E - Commerce sales with livestreaming in B2B marketplace: A

perspective on livestreamers’s competencies”, Journal of Business Research, Version of Record 12 July 2023,

https://www.sciencedirect.com/science/article/abs/pii/S014829632300526X, accessed on 02/1/2025.

11

model need to have a very professional customer management system and operating process.This requires e-commerce platforms to be capable of handling large data and providinganalytical tools to support business decisions.

C2C model (Consumer to Consumer):

The C2C model is a model that allows individuals to sell to each other through

e-commerce platforms Typical examples include eBay, Taobao, or Facebook Marketplace This

model expands transaction capabilities, helping consumers earn money from unused or

self-made products The C2C model also opens up opportunities for individuals to participate in the

market without owning a store or business However, one of the major challenges of this model

is ensuring the safety and security of transactions between consumers C2C platforms need to

have mechanisms to protect the rights of buyers and sellers, such as consumer protection policies

and rating and feedback systems Because transactions often occur between individuals withlittle intervention from businesses, building trust between buyers and sellers is very important

C2B model (Consumer to Business):

The C2B model is quite unique in that consumers provide products or services tobusinesses, rather than the other way around Some typical examples include online surveyplatforms where consumers participate to answer questions and receive rewards, or platformswhere consumers can sell photos or videos to media or advertising companies The strength ofthe C2B model is that it creates two-way interaction, where consumers are not only buyers butalso value providers for businesses This opens up earning opportunities for individuals, whilebusinesses can also leverage resources from the consumer community to serve marketing,advertising, or product development campaigns However, for this model to operate effectively,

it requires the participation of a large number of consumers and a stable technology platform toconnect consumers and businesses

B2G (Business to Government) and G2B (Government to Business) models:

The B2G and G2B models relate to transactions between businesses and governmentagencies In the B2G model, businesses provide products and services to government agenciesthrough online platforms For example, businesses can participate in online tenders organized

by the government to provide goods or public services The G2B model is when the government

provides services or information to businesses through electronic platforms, such as providing

public data or supporting administrative procedures This model requires platforms to meet

12

security, transparency, and legal process requirements Transactions in the B2G and G2Bmodels often involve large and long-term contracts, requiring participants to comply with strictlegal regulations.

G2C model (Govermnent to Consumer):

The G2C model is the transaction between the government and consumers, in which the

government provides public services such as tax payments, document registration, and online

public services This is an important model that saves time and costs for both the government

and citizens The G2C model contributes to improving the efficiency of administrative

management, while creating favorable conditions for citizens to catry out administrativeprocedures

In summary, each e-commerce model has its own advantages and disadvantages, and

each model serves a specific target group To succeed in e-commerce, businesses and

organizations need to understand the characteristics of each model and apply appropriate

technology to optimize the user experience, while building effective marketing and securitystrategies

1.1.4 Role of e-commerce activities

E-commerce has been and is developing strongly, bringing many benefits not only toconsumers but also to businesses along with merchants, society, and government management

First of all, for consumers, e-commerce creates maximum convenience in shopping.Consumers can easily access goods and services from all over the world with just a few simpleoperations through electronic devices This saves time and costs and expands the choice ofproducts, while consumers can compate prices and evaluate product quality through onlineplatforms before making a purchase decision The development of delivery and electronicpayment services has also made it easier for consumers to make buying and selling transactionswithout having to go to a store The Department of E-commerce and Digital Economy (Ministry

of Industry and Trade) estimates that the number of consumers shopping online in 2023 will be

up to 61 million people and estimates the value of online shopping per person at about 336

For businesses and individual entrepreneurs, e-commerce offers opportunities toexpand markets and increase revenue Businesses can reach a global customer base withoutbeing limited by geographical location They can optimize their business processes, from

inventory management, reducing operating costs to implementing accurate marketing strategies

thanks to analyzing customer data from online platforms E-commerce helps businesses have

lower operating costs compared to traditional commerce The automation of processes from

management to logistics helps minimize manpower and personnel costs Businesses also save

on expensive premises costs, only needing to invest in warehouses to store goods at a reasonable

cost Thanks to optimized operating costs, consumers benefit when product prices on commerce platforms are often lower than when buying at traditional stores or supermarkets.Besides, e-commerce also promotes innovation in business models, allowing businesses todevelop new products and services based on customer needs

e-For society, e-commerce plays an important role in promoting economic developmentand improving the quality of life of the community E-commerce not only creates job

opportunities for a large number of workers in fields such as delivery, online marketing, software

development butalso helps promote the development of supporting industries, from information

technology to logistics’ Futhermore, e-commerce also supports the provision of essential

products and public services, helping to improve the quality of life of people

Finally, for government management, e-commetce opens up opportunities to reform andoptimize administrative and tax management State agencies can apply modem managementtools to monitor and supervise economic activities, while improving tax collection efficiencythrough the application of online tax systems and electronic transactions The government canalso use e-commerce platforms to provide online public services, helping to reduceadministrative procedures and increase transparency in public transactions

To conclude, e-commerce is not only a tool to optimize business and consumptionprocesses but also contributes to the development of society and the economy, while creatingopportunities for state agencies to improve management and serve people more efficiently

° Doan Minh Thang (2023), “The impact of e-commerce on social life”, Journal of State Management, https:/www.quanlynhanuoc.v/2023/08/24/tac-dong-cua-thuong- mai-dien-tu-den-doi-song- xa-hoi/, accessed on: 03/1/2025.

14

1.2 Theoretical issues regarding tax management law for individual taxpayers engaged

in e-commerce activities

1.2.1 The concept and characteristics of tax management for individual taxpayers in

e-commerce.

To fully understand the nature of tax administration, it is necessary to analyze it from the

fundamental concepts of tax and management According to clause 1, Article 3 of the Law on

Tax Administration 2019, “tax” is defined as a compulsory payment to the state budget by

entities including organizations, households, business households, and individuals in accordance

with the provisions of tax law Meanwhile, according to the Vietnamese dictionary,

“management” is understood in two meanings: one is to look after and maintain according tocertain requirements; two is to organize and control activities according to established

standards!°,

According to the viewpoint in the Public Finance textbook of the State Finance

Department, University of Economics Ho Chi Minh City (2005), tax administration is defined

as a set of professional measures implemented by agencies with the function of collecting state

budget revenue These are regular activities of the tax authorities to ensure that tax collection iscarried out fully, promptly, and in compliance with legal regulations In this sense, taxadministration includes building a tax collection plan, organizing collection measures, andorganizing the tax sector apparatus However, practice shows that the scope of tax administration

is not limited to managing tax collection

In the context of e-commerce - a form of business that carries out buying and sellingactivities in an electronic environment, these transactions inevitably generate revenue, expenses,and create profits for the participating entities Therefore, e-commerce activities are subject tothe regulation of many different taxes: VAT, corporate income tax for organizations, andpersonal income tax for individuals This poses an urgent requirement for the effectiveness oftax administration

In essence, tax administration is a specialized management field within the scope of stateadministrative management This activity is expressed through the competent state agency

taking measures to ensure the correct and sufficient collection of tax amounts that organizations

and individuals are obliged to pay into the state budget, thereby contributing to ensuring the

‘© Tnstitute of Linguistics (2017), “Vietnamese Dictionary”, Da Nang Publishing House.

15

performance of state functions and tasks!! Tax administration is carried out in three main

aspects: First, formulating tax policies, including tax regulation policies and managementpolicies; Second, building the organizational apparatus of the tax sector and developing human

resources in tax administration activities; Third, applying appropriate methods to influence the

awareness and behavior of taxpayers in fulfilling their tax payment obligations

Based on the above analysis, it is possible to identify the definition of tax administration

for individuals in e-commerce as follows: Tax administration for individuals in e-commerce is

the organization and management of the tax authorities’ work with individual taxpayers

participating in e-commerce activities in fulfilling their tax payment obligations in accordancewith the regulations promulgated by law

Tax administration for e-commerce is a component of tax management carried out by

state authorities, encompassing all fundamental characteristics of tax administration while also

having unique aspects due to its operation m a virtual, non-physical environment and its

involvement with multiple regulatory agencies

Firstly, atits essence, this is an important part of state management in the economic field

Tax administration is reflected in the organization, assignment of responsibilities to departmentswithin the tax agency and the establishment of effective coordination relationships in theimplementation of tax policies State management of the economy is conducted through theorganized and legal impact of the State, in order to effectively use domestic and foreigneconomic resources The goal is to achieve national economic development goals in the context

of integration and expansion of international exchange Public financial management isunderstood as the process by which the State plans and formulates policies, uses a system oftools and methods to influence financial activities This is to ensure that the movement is inaccordance with the objective requirements of the socio-economic context and best serves thefunctions undertaken by the State In the context ofe-commerce, tax administration for taxpayers

is an important part of state management in the economic field and a key branch of publicfinancial management This activity requires close coordination between management agenciesand the ability to adapt to the constantly changing digital business environment

' Nguyen Trung Duong, Le Nhat Hong (2019), “Tax administration for e-commerce activities: Current

situation and some recommendations”, Journal of Law and Practice No 40/2019, p.18.

16

Secondly, it is necessary to clearly identify the key elements of tax administrationactivities with individual e-commerce taxpayers, including subjects, objects, tools andmanagement methods, because tax administration in this field is a complex activity, requirmg

synchronized coordination between state management subjects

Regarding management subjects, state agencies such as tax authorities, customs and

related agencies play a key role The management objects include the behaviors of the tax

management agency, civil servants, taxpayers and specifically individual taxpayers (excluding

organizations and businesses) in e-commerce transactions

Management tools include laws, plans and policies Law is the most important guidingand regulating tool, creating a premise for adjusting economic relations, maintaining stabilityand ensuring equality in tax rights and obligations Legal documents promulgated by theNational Assembly and the Government, such as the Law on Tax Administration and the Law

on Personal Income Tax, will be typical legal bases In addition, plans and policies are

indispensable tools The development of short-term, medium-term and long-term plans helps to

assess the effectiveness of tax management through each stage, especially in the current market

economy, foreign economic policies, economic and tax structure become more important than

ever.

Management methods include three main methods: administrative, economic andeducational The administrative method is used to ensure that subjects in tax management

relations comply, but it is also necessary to avoid bureaucracy and abuse of power Meanwhile,

the economic method uses material benefits to stimulate the positivity of management objects,such as increasing salaries and bonuses for individuals with outstanding work achievements inthe field of tax management The educational method aims to raise awareness and sense offulfilling tax obligations to the State through propaganda activities

1.2.2 The concept and content of tax management law for individual taxpayers in commerce activities

e-To begin with, regarding the concept and nature of the Jaw on tax administration forindividuals in e-commerce, it is necessary to analyze it from both the perspective of tax

administration and the regulatory legal framework Tax administration is understood as the

activity of organizing and assigning responsibilities among departments within the tax agency,

17

in order to effectively implement tax policies through the establishment of a close cooperativerelationship.

As analyzed above, tax administration is the act of organizing and assigning

responsibilities to departments within the tax agency to perform the tax management function

through the establishment of a cooperative relationship between departments in an effective

manner in the implementation of tax policies In order for tax administration activities to achieve

high efficiency, the State needs to promulgate and implement a legal system to institutionalize

the functions, tasks, powers and responsibilities of relevant subjects At the same time, the law

also clearly stipulates the order and procedures corresponding to the authority to participate intax administration of each subject This is the reason why the Law on Tax Administration was

promulgated, creating a solid legal foundation for tax administration activities in the market

economy.

In recent years, our Party and State have always been concerned with improving theefficiency of managing financial resources and the state budget, especially focusing on tax

management through legal tools From there, it is possible to define the law on tax administration

for individual taxpayers in e-commerce as follows: The law on tax administration for individuals

in e-commerce transactions is a setoflegal regulations promulgated by the State to adjust socialrelations arising in tax administration activities for taxpayers in the e-commerce environment.This is an important legal basis for tax administration activities in the modern market economy,especially in the context of strong e-commerce development as it 1s today

Regarding the content of tax administration law for individuals paying taxes in commerce, these are essentially the stages and processes of tax administration activities Theyinclude: legal regulations on tax registration and taxpayer information management; regulations

e-on tax declaratie-on, calculatie-on, and payment; laws e-on tax finalizatie-on, collectie-on, and refunds;laws on tax exemption and reduction; regulations on inspection, audit, and handling of tax lawviolations; regulations on complaints and complaint resolution or litigation and tax disputeresolution

First, tax registration and tax information management for individual taxpayers in

e-commerce activities Tax registration and taxpayer information management is the first basic

process, requiring online business individuals to register for tax codes and provide accurate

18

information to tax authorities This process helps establish taxpayer identity and creates amanagement database.

Second, legal regulations on declaration, payment, tax finalization and collecting taxes

for taxpayers in e-commerce transactions Tax payment is the process by which individuals or

organizations transfer tax money to the State Budget based on tax declaration information Tax

amounts to be paid are determined according to law, and taxpayers self-declare and are

responsible for their declarations Tax declaration is a process where taxpayers complete tax

returns on personal computers and submit them via the Internet All online tax payment

procedures can be performed on computers with internet connections, helping taxpayers avoidvisiting tax offices to submit tax returns when due Tax finalization is the process of checking all

data in taxpayers’ e-commerce transaction taxes, thereby accurately determining the tax amount

to be paid, tax amount paid, tax deficiency (unpaid) or excess (overpaid) Tax collection is a legalaction where the State requires taxpayers to pay outstanding tax debts to the State Budget, based

on tax finalization results Unpaid or incomplete tax payments when due will be collected Tax

collection is implemented through administrative decisions by tax authorities after tax audits and

inspections, requiring taxpayers to pay the missing tax amount and it may be due to taxpayers’unintentional or intentional late payment

Third, regulations on tax refunds, tax exemption and reduction for individual commetce taxpayers Tax refund is a legal act of the State, whereby the State issues a decision

e-to return e-to the entitled taxpayer the amount of tax they have paid but for which the State has nolegal basis to retain or possess Tax exemption is essentially the State's “exemption” of taxobligations for e-commerce taxpayers when they meet tax exemption conditions according tolaw Tax reduction is the State's decision to exempt part of taxpayers’ tax obligations when theysatisfy tax reduction conditions according to Jaw Tax exemption and reduction are essentiallyforms of State “incentives” for taxpayers, helping them overcome financial difficulties, therebyencouraging them to participate in investment areas that the State needs to attract.Simultaneously, this also reflects the State's goodwill in promoting the principle of fairness inthe tax system,

Fourth, regulations on inspection, audit, violation handling, complaint resolution, and

litigation related to individual taxpayers in e-commerce transactions Tax inspection and auditaim to determine the completeness, accuracy, and truthfulness of documents, information, and

19

records that taxpayers have declared, submitted, and presented to tax authorities Additionally,they assess compliance with tax laws and other related regulations for handling according toregulations Based on tax inspection and audit results, tax authority leaders will make handling

decisions, require recovery of incorrectly refunded tax amounts, or apply administrative

sanctions for tax management violations, or transfer files to competent authorities for handling

If the mspection and audit reports confirm administrative violations, these reports will be

considered evidence of violations

Individual taxpayers have the right to complain about administrative decisions or

administrative actions of tax authorities and tax officials if they believe these decisions or actionsviolate the law and infringe upon their legitimate rights Additionally, individuals also have the

right to denounce tax law violations by taxpayers, tax officials, or other organizations and

individuals The resolution of complaints and denunciations will be implemented according to

the laws on complaints and denunciations

1.2.3 Tax management law for individual taxpayers engaged in e-commerce activities inseveral countries worldwide

Tax administration law for individuals participating in e-commerce activities hasbecome an urgent issue in the context of the strong development of the digital economy andonline transactions Across countries worldwide, to ensure fairness and efficiency in taxcollection, many nations have developed and adjusted their legal systems to manage taxes forindividuals participating in e-commerce activities

In the United States, the Internal Revenue Service (IRS) has required e-commerceplatforms such as eBay, Etsy, and Amazon to provide information about seller transactions toensure that individuals and businesses participating in e-commerce comply with their taxobligations Individuals conducting business on these platforms must declare income tax fromonline transactions This demonstrates the U.S government's efforts in building a transparentand efficient tax system while limiting tax evasion in the online business environment

In the European Union (EU), member states have agreed on certain tax regulations fore-commerce activities, particularly through the application of VAT on electronic transactions

Accordingly, e-commerce platforms must be responsible for collecting and paying VAT for

individual online seller transactions to avoid tax revenue loss in the region The EU hasdeveloped the One-Stop-Shop (OSS) system to simplify the tax collection process for businesses

20

and individuals engaged in cross-border e-commerce, helping reduce complex administrativeprocedures To screen non-compliant taxpayer websites, tax authorities in some EU countriescross-reference information sourced from the Intemet with information extracted from intemal

databases, including information from V AT returns, corporate income tax, personal income tax,

and import-export tax returns, to create taxpayer risk analysis profiles For example, France and

the Netherlands have developed intelligent Internet search tools to classify activities between

organizations and individuals conducting business online but not declaring or paying taxes

Meanwhile, Germany uses the Xpider tool to detect websites of German organizations and

individuals engaged in e-commerce, identify e-commerce activities not yet covered by tax law,and collect and store information for tax inspection and audit purposes

In Singapore, one of the leading countries in e-commerce tax management, the

government has issued clear tax policies for individuals and businesses participating in

e-commerce Accordingly, e-commerce transactions must comply with Goods and Services Tax

(GST), and individuals conducting business on online platforms must declare detailed incometax The Singapore government also provides detailed support and guidance on tax obligationsfor individuals participating in e-commerce, helping people easily comply with regulationswithout encountering complexity

Australia has also taken strong steps in tax management for individuals participating ine-commerce Online platforms must ensure tax collection and payment according to VATregulations for cross-border transactions The Australian government requires e-commerceplatforms to report and provide information about sellers, especially those with high revenuefrom online transactions, thereby ensuring these individuals fulfill their tax obligationscompletely

In general, tax administration laws for individuals participating in e-commerce activitiesacross countries worldwide reflect government efforts in building a fair, transparent, and easilyapplicable tax system However, the application of tax policies still faces many challenges,especially in monitoring and controlling cross-border transactions, requiring close intemationalcooperation to prevent tax evasion in the e-commerce environment

CHAPTER 1 SUMMARY

Chapter 1 of the thesis focuses on theoretical issues related to e-commerce activities and

tax administration law for individuals participating in e-commerce in Vietnam

21

First, the author presents content including concepts, characteristics, and common commerce models E-commerce is defined as a modern transaction method that leverages digitaltechnology to connect businesses and consumers globally The notable characteristics of e-

e-commerce include intangibility, global reach, immediacy but with delays in goods delivery,

information transparency, and dependence on technology

Next, the chapter addresses legal aspects of tax administration for individuals

participating in e-commerce The main contents include the concept of tax administration,

characteristics and tax administration tools, as well as legal content on tax administration for

individual e-commerce taxpayers It can be seen that tax administration law plays an importantrole in ensuring tax fairness and enhancing budget collection efficiency

Finally, the chapter analyzes tax administration laws for e-commerce in several

countries including the United States, European Union, Singapore, and Australia These

countries have implemented strict control mechanisms, such as requiring e-commerce platforms

to provide transaction information from individual sellers, deploying automated tax collectionsystems, and using technology to monitor e-commerce activities From this, the research drawslessons for Vietnam in improving the legal framework for tax administration of online businessindividuals

22

CHAPTER 2: LAW ON TAX MANAGEMENT FOR INDIVIDUAL TAXPAYERS

IN E-COMMERCE ACTIVITIES IN VIETNAM2.1 Legal regulations related to tax management for individual taxpayers in e-commerceactivities in Vietnam

2.1.1 Regulations on tax registration for individual taxpayers in e-commerce

Tax registration is the process by which individual taxpayers declare to the state taxmanagement agency information related to their personal identification For individuals

registering for tax, this information includes their full name, date of birth, occupation, address,

and some other personal information such as citizen identification number or passport, email,

and contact phone number Current law has also determined that individual taxpayers engaged

in traditional business or e-commerce business must comply with the obligation to register for

tax and use tax identification numbers in accordance with legal regulations!*.

According to clause 1, Article 4 of Circular 86/2024/TT-BTC, individuals who aresubjects of tax registration are specified in points a and b of clause 1, Article 30 of the currentLaw on Tax Administration Specifically:

“1 Taxpayers must apply for taxpayer registration and shall be issued with TINs by tax

authorities before beginning their business operations or incurring amounts payable to the state

budget The following entities shall apply for taxpayer registration:

a) Enterprises, organizations and/or individuals shall apply jor taxpayer registration through

the interlinked single-window system together with enterprise, cooperative or businessregistration as prescribed in the Law on Enterprises and other relevant regulations;

b) Organizations and individuals beside those stipulated in point a of this clause shall registerdirectly with tax authorities as regulated by the Minister of Finance.”

Based on the above regulations, individuals subject to e-commerce taxes must registerfor tax and be issued a tax identification number by the competent tax authority when a tax

obligation arises and before starting production or business activities This registration is carried

out through one of the following two mechanisms: First, individuals register through a single

inter-agency portal linked to business registration, in accordance with the current Enterprise Law

and relevant legal provisions; Second, individuals register directly with the tax authority asstipulated in clause 2, Article 4 of Circular 86/2024/TT-BTC

'2 Clause 1, Article 17 of the Law on Tax Administration 2019 (amended and supplemented in 2024).

23

Additionally, regarding e-commerce activities, digital platform-based businesses, andother services provided by foreign individuals or suppliers without a permanent establishment

in Vietnam, current tax laws also stipulate that these entities must directly or authorize tax

declaration and other tax obligations in Vietnam This is a new point in the current tax

management law for e-commerce compared to previous regulations This shows thatVietnamese law has expanded the scope of taxpayers in line with tax management practices andglobal legal trends

Moreover, when registering for tax with the competent state authority, individual

taxpayers also need to comply with the regulations on tax registration dossiers and taxregistration deadlines as follows:

Regarding Tax Registration Dossiers:

For taxpayers who are households, business households, and individual businesses, the

tax registration dossier includes: A tax registration declaration; A copy of the valid citizen

identification card, identity card, or passport; and Other relevant documents as stipulated in

Article 22 of Circular 86/2024/TT-BTC

Regarding Tax Registration Deadlines:

This issue is stipulated in Article 33 of the current Law on Tax Administration For

taxpayers who register for tax concurrently with business registration activities, the tax

registration deadline is also the business registration deadline!> As for taxpayers who register

for tax directly with the tax authority, the tax registration deadline is 10 working days from thefollowing dates: (i) Issuance of a business household registration certificate, establishment andoperation license, investment registration certificate, or establishment decision; (i)Commencement of business activities for organizations not subject to business registration orbusiness households and individual businesses subject to business registration but not yet issued

a business registration certificate; (iii) Arising responsibility for tax deduction and substitute taxpayment; organizations paying substitute tax for individuals under contracts or businesscooperation documents; (iv) Signing a contract for a bid with a foreign contractor orsubcontractor declaring and paying tax directly with the tax authority; signing oil and gas

3 Clause 1, Article 33 of the Law on Tax Administration 2019 (amended and supplemented in 2024).

24

contracts or agreements; (v) Arising personal income tax obligations; (vi) Arising requests for

tax refunds; (vii) Arising other obligations to the state budget'*.

2.1.2 Regulations on tax declaration, payment obligations, and tax refunds for individual

taxpayers in e-commerce

2.1.2.1 Regulations on tax declaration for individual taxpayers in e-commerce

Individual taxpayers in e-commerce activities must declare accurately and completely

all tax retum contents according to the forms and requirements of the Minister of Finance, as

well as submit all required documents and materials in tax declaration files to tax authorities

Specifically, the law stipulates:

“Business households and individual businesses with revenue from production and

business activities in a calendar year of 100 million VND or less are not required to pay VAT

and personal income tax according to the provisions of the law on VAT and personal income

tax Business households and individual businesses are responsible for declaring taxes

accurately, honestly, fully, and submitting tax dossiers on time; taking responsibility before the

lawfor the accuracy, honesty, and completeness oftax dossiers according to regulations’.

Accordingly, if business households and individual businesses have revenue frombusiness types, including e-commerce businesses and activities, of 100 million VND or more inacalendar year, they are required to pay taxes However, regardless of whether they are required

to pay taxes or not, individuals engaged in e-commerce business activities must declare taxesaccording to the provisions of the law; if the revenue is less than 100 million VND, they mustfulfill the obligation to declare and prove that they are eligible for tax exemption, and vice versa

In addition to the subjects mentioned, there is another case related to individuals engaged

in e-commerce business, which is an organization cooperating with individuals in business.According to the provisions of tax and tax management laws, this organization is responsible fordeclaring and paying VAT on the entire revenue from business cooperation activities, regardless

of the form of profit distribution At the same time, the organization will also declare and paypersonal income tax on behalf of individuals participating in business cooperation In the casewhere the organization cooperates with individuals who are business households or individual

businesses as stipulated in clause 5, Article 51 of the Law on Tax Administration, if that

'4 Clause 2, Article 33 of the Law on Tax Administration 2019 (amended and supplemented in 2024).

'5 Clause 2, Article 4 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

25

individual is operating in the same industry as the industry cooperating with the organization,both the organization and the individual will independently declare taxes based on actual

business results according to regulations'® Applying this to the field of e-commerce, if anindividual has a business contract with organizations that partner with e-commerce platforms in

Vietnam, the individual does not need to declare taxes themselves; instead, the business

organization will fulfill this obligation Specifically, the e-commerce trading platform must base

on revenue and other receipts that the individual business receives on the platform, including

amounts received through delivery units (COD), intermediary payment methods, etc., to

determine the revenue for substitute tax declaration and payment for the individual business Theseller's information will be transferred to the tax authority electronically on a monthly basis The

data to be transferred to the tax authority includes revenue, bank accounts, list of goods and

services, and personal information including full name, personal identification number or

identity card/citizen identification card/passport, tax identification number, address, email, and

contact phone number, etc Thus, this is a case where individuals participate and profit from

e-commerce activities but will not directly declare taxes; instead, this obligation will be fulfilled

by an intermediary, which is usually e-commerce websites and platforms

In reality, the process of controlling tax declaration and collection in this sector still facesmany shortcomings due to both subjective and objective reasons Subjectively, the awareness oftax obligations compliance by individuals and organizations remains pivotal The regulation of

a revenue threshold of 100 million VND/year for mandatory declaration and payment of VAT

and personal income tax still has many loopholes, leading to some subjects liable for tax notbeing tightly managed Households, business households, and individual businesses operatingonline often seek to evade taxes by splitting revenue into multiple accounts or conductingbusiness on multiple platforms, making tax management more complex This poses manydifficulties for tax authorities in monitoring, reviewing, checking, statistics, and managing taxdata effectively

In addition, individuals fulfillmg tax declaration obligations must also meet the legalrequirements regarding tax declaration dossiers, submission locations, and declaration deadlines

‘6 Point c, clause 5, Article 7 of Decree No 126/2020/ND-CP dated October 19, 2020 on elaboration of the Law on Tax Administration.

26

Tax declaration dossiers typically include tax declaration forms along with relevant documentsand materials, used as a basis for determining the taxpayer's tax obligations to the state budgetand must be prepared and sent by the taxpayer to the tax management authority via electronic or

paper form Current law stipulates three methods of tax declaration for business households and

individual businesses in our country as follows:

First, for individuals engaged in business who pay taxes using the declaration method,

taxpayers are responsible for submitting tax declaration forms, statements, and any required

appendices in accordance with the templates prescribed by the Ministry of Finance’.

Additionally, they must provide all necessary documents and supporting materials as required

in the tax declaration dossier to the tax authorities and are legally responsible for the accuracy

and truthfulness of the declared information According to clause 1, Article 45 of the Law on

Tax Administration, tax declaration dossiers for business households and individual businessesusing the declaration method must be submitted to the Tax Department that directly manages

the location where the business operates!® Regarding the deadline for tax declaration, clause 1,

Article 44 of the Law on Tax Administration specifies the following: (i) The deadline for

submitting monthly tax declaration dossiers is no later than the 20th day of the month followingthe month in which the tax obligation arises; (1) The deadline for submitting quarterly taxdeclaration dossiers is no later than the last day of the first month of the quarter following the

quarter in which the tax obligation arises!?.

Second, for the tax payment method based on each transaction, additional documents

may be required in the tax declaration dossier’ While the Ministry of Finance does not provide

specific templates for these documents, they must still comply with the relevant legal regulations.The place for submitting tax declaration dossiers for this category is specified as follows:

“Individuals earning income from digital content products and services must submit their tax

declaration dossiers to the Tax Department that directly manages the location where they reside

Ứ Clause 1, Article 11 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

'8 Clause 2, Article 11 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

'9 Clause 3, Article 11 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

2® Clause 1, Article 12 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

27

(permanent or temporary residence)”! According to clause 3, Article 44 of the Law on Tax

Administration, the deadline for submitting tax declaration dossiers for individuals paying tax

per transaction is no later than the 10th day from the date the tax obligation arises”.

Third, for the fixed tax (lump-sum tax) method, the tax declaration dossier is detailed for

specific cases under clause 1, Article 13 of Circular No 40/2021/TT-BTC Additionally,

according to clause 3, Article 13 of Circular No 40/2021/TT-BTC and Article 44 of the Law on

Tax Administration 2019, the deadline for submitting tax declaration dossiers for lump-sum

taxpayers is as follows: Regular lump-sum taxpayers must submit their tax declaration dossiers

no later than December 15 of the year preceding the taxable year Ifa lump-sum taxpayer starts

a new business, changes the tax calculation method, modifies their business sector, or alters their

business scale during the year, the tax declaration dossier must be submitted within 10 days from

the date of the change For lump-sum taxpayers using invoices issued by the tax authorities on a

per-transaction basis, the tax declaration dossier must be submitted no later than the 10th day

from the date the revenue-generating transaction occurs

2.1.2.2 Regulations on tax payment obligations for individual taxpayers in e-commerce

Before analyzing legal regulations on tax payment obligations, it is necessary to identifyand clearly understand the tax calculation basis for individual businesses in e-commerceactivities For individual e-commerce taxpayers, these bases are specified mainly in the Law onTax Administration, Law on Value Added Tax, and Law on Personal Income Tax, as well asthe current implementing documents These are legal documents that provide generalregulations on tax calculation bases for various subjects, including individuals engaged in e-commerce activities

In e-commerce activities, electronic invoices are identified as the most typical and clearbasis for tax calculation An electronic invoice means an invoice in the form of electronic data,issued by the goods seller or service provide to record the goods sale or service provision inaccordance with regulations of law on electronic accounting and tax, including the invoices

generated by cash registers that are digitally connected to tax authorities”*.

2! Point b, clause 2, Article 12 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

22 Clause 2, Article 112 of Circular No 40/2021/TT-BTC dated June 1, 2021, guidelines value-added tax personal income tax and tax administration of household businesses and individual businesses.

23 Clause 1, Article 89 of the Law on Tax Administration 2019 (amended and supplemented in 2024).

28

Regarding this issue, Circular No 32/2011/TT-BTC dated 14/03/2011, regulates thecreation, issuance, and use of electronic invoices in the sale of goods and provision of services.Accordingly, when conducting e-commerce transactions, participating entities must use

electronic invoices as a basis for recording completed commercial transactions This is an

important condition that helps tax authorities easily control transaction content while serving as

a basis for checking and monitoring the tax declaration and payment process To strengthen

coordination between related parties, Resolution No 19/NQ-CP dated 12/3/2015, specifically

stipulates key tasks and solutions to continue improving the business environment and

enhancing national competitiveness On this basis, the tax sector has strongly implementedelectronic tax declaration and payment through cooperation with commercial banks nationwide

to improve tax collection efficiency

Although certain results have been achieved in implementing tax declarations and

determining tax calculation bases, the actual tax revenue from e-commerce activities is still not

commensurate with the actual revenue of domestic and cross-border business platforms inVietnam One of the main reasons is the difficulty in determining the revenue of organizationsand individuals participating in e-commerce This issue becomes more complex as in Vietnam,

in 2021, up to 73% of e-commerce transactions were conducted through cash on delivery (COD)payment methods (according to the Department of E-commerce and Digital Economy -

Ministry of Industry and Trade, 2022)** Additionally, for newly emerging business models in

e-commerce, there are still no specific and strict regulations to manage tax declarations anddetermine tax calculation bases This leads to tax collection efficiency not meeting expectationswhile creating mequality between online and traditional business models Another issue 1s that

in the internet environment, business activities can occur through websites without requiring the

physical presence of taxpayers in a specific country or location In other words, “digital

presence” is not clearly defined in current tax laws, which mainly rely on the concept of

“physical presence” of business organizations or individual taxpayers Meanwhile, many

business entities can own multiple digital accounts on different platforms to conduct sales andservice provision activities Payments can also be made through various bank accounts, causing

significant difficulties for tax authorities in identifying and controlling taxpayers

% Phi Manh Cuong (2023), “Tax Laws in E-commerce”, Electronic Industry and Trade Magazine,

https:/apchicongthuong.vn/phap-luat-ve-thue-trong- thuong- mai-dien-tu- 108245 htm, accessed on 20/1/2025.

29

Next, it is essential to understand the basics of tax payment obligations for individual commerce businesses Tax payment is considered a basic but representative and importantobligation of taxpayers Current tax administration law stipulates several contents about tax

e-payment deadlines for individual taxpayers as follows:

In cases where taxpayers self-determine the tax amount to be paid, the payment deadline

is no later than the last day of the tax declaration filing deadline If there are supplementary tax

declarations, the tax payment deadline will apply according to the filing deadline of the tax

period with errors In cases where tax authorities determine the tax amount to be paid, the

payment deadline will follow the deadline stated in the tax authority's notice Taxpayers canfulfill their tax payment obligations to the state budget through methods such as paying at the

State Treasury, tax administration office where tax declarations are received, organizations

authorized by tax authorities to collect, or through commercial banks, credit institutions, and

payment service providers as prescribed by law

Tax payment extensions can be considered if taxpayers fall into one of the following

cases: suffering material damage directly affecting production and business activities due to

force majeure events as stipulated in clause 27, Article 3 of the Law on Tax Admunistration, orhaving to cease operations due to relocation of production and business facilities as required by

competent authorities, affecting production and business results In these cases, taxpayers may

be granted an extension for partial or full tax payment as prescribed

2.1.3 Regulations on tax refunds, tax exemptions and reductions for individual taxpayers

in e-commerce

2.1.3.1 Regulations on tax refunds for individual taxpayers in e-commerce

According to current regulations in Article 70 of the Tax Administration Law, individual

taxpayers in e-commerce transactions are eligible for tax refunds in the following cases: Tax

administration authorities shall implement tax refunds for individuals eligible for tax refundsaccording to tax laws Tax authorities shall refund excess payments in cases where taxpayershave paid more to the state budget than the required amount according to clause 1, Article 60 ofthis Law Two types of taxes are applied and adjusted for individual e-commerce taxpayers:VAT and personal income tax

First, regulations on VAT refunds for individual e-commerce taxpayers Clause 1,

Article 19 of Circular 219/2013/TT-BTC stipulates the conditions for VAT refunds as follows:

30

“Business establishments and organizations eligiblefor VAT refunds as guided in points

1, 2, 3,4, 5 ofArticle 18 of this Circularmust be businesses paying tax under the credit method,having been granted business registration certificates or investment licenses (practice pennits)

or establishment decisions by competent authorities, having seals in accordance with law,

establishing and maintaining accounting books and documents according to accounting laws;

having bank accounts according to the business establishment's tax code ””

Accordingly, the prerequisite and basic condition for VAT refunds is that the business

entity must pay tax under the credit method However, clause 1, Article 12 of Circular

219/2013/TT-BTC stipulates the following subjects eligible for the tax credit method including:(i) Operating business establishments with annual revenue from goods and services of one

billion dong or more and fully implementing accounting, invoice, and documentation systems

according to laws on accounting, invoices, and documents, except for households and individual

businesses paying tax under the direct calculation method guided in Article 13 of this Circular;

(ii) Business establishments voluntarily registering to apply the tax credit method, except forhouseholds and individual businesses paying tax under the direct calculation method guided inArticle 13 of this Circular; (ii) Foreign organizations and individuals supplying goods andservices for oil and gas exploration, investigation, development, and exploitation activitiespaying tax under the credit method through Vietnamese party's declaration and payment on theirbehalf Therefore, household and individual businesses are not eligible for tax payment under

the credit method and consequently are not eligible for consideration of VAT refunds

Second, regulations on personal income tax refunds for individual taxpayers in commerce Personal income tax refund is the reimbursement of excess personal income tax paidwhen taxpayers fully meet the conditions prescribed by law Although there is no specificdefinition in legal documents, personal income tax refund can be understood as a mechanismthat helps individuals receive back excess tax payments According to clause 2, Article 8 of thePersonal Income Tax Law 2007, individuals may be eligible for tax refunds in cases such aswhen the tax amount paid is greater than the tax amount due, when they have taxable incomebut haven't reached the threshold requiring tax payment, or according to decisions by competent

e-state authorities Conditions for personal income tax refunds are specifically regulated in clauses

2 and 3, Article 28 of Circular 111/2013/TT-BTC Accordingly, individuals must have a tax

code at the time of submitting tax finalization documents If individuals have authorized tax

31

finalization to organizations or individuals paying the income, the tax refund will beimplemented through these organizations, through a mechanism of offsetting between excesstax payments and tax payable of individuals If individuals self-declare taxes directly with tax

authorities, they can choose either tax refund or offset against the next period Notably, if

individuals are eligible for tax refunds but submit late tax finalization returns, they will not be

subject to administrative penalties for late submission To receive tax refunds, taxpayers in

e-commetce transactions need to prepare and submit tax refund documents to competent tax

authorities Tax refund documents include written requests for tax refunds and related

documents meeting legal requirements Thus, to receive tax refunds, individuals need to meetconditions suchas having registered and obtained a tax code, falling into one of the cases eligible

for tax refunds as prescribed, and submitting tax refund requests to tax authorities according to

legal procedures

2.1.3.2 Regulations on tax refunds for individual taxpayers in e-commerce

First of all, regarding tax exemption for individuals paymg e-commerce taxes

According to clause 2, Article 4 of Circular 40/2021/TT-BTC on principles for calculating VAT

and personal income tax for business households and individual businesses:

“Business households and individual businesses with revenue from production andbusiness activities in a calendar year of 100 million VND or less are exempt from paying VATand personal income tax according to VAT and personal income tax laws Business householdsand individual businesses are responsible for accurate, truthful, and complete tax declarationsand timely submission of tax documents; they are legally responsible for the accuracy,truthfulness, and completeness oftax documents as prescribed”

Therefore, business households and individuals with annual revenue of 100 millionVND or less from production and business activities are exempt from both VAT and personalincome tax under respective tax laws While these entities are exempt from tax calculations andpayments for their e-commerce business activities, they must still fulfill all tax declarationobligations and submit complete and truthful tax documentation

Next, regarding current tax management regulations on tax reduction for individuals in

e-commerce activities: For individuals and business households who have received tax payment

notifications from tax authorities at the beginning of the year but subsequently cease or

temporarily suspend business operations during the year, the fixed tax amount will be adjusted

32