New tax burden under Circular 40 finds resistance from e-commerce platforms

E-commerce operators are not too keen on paying tax on behalf of their vendors

E-commerce platform operators have been added to the list of those responsible for declaring and paying tax on behalf of other individuals by Circular No.40/2021/TT-BTC, which will officially take effect from August 1.

As soon as it was officially released a few days ago, the Vietnam E-commerce Association, representing e-commerce platforms, advised against the circular, arguing that operators only provide a platform for vendors to conduct business, they do not pay vendors income directly. Therefore, requiring e-commerce companies to pay taxes on behalf of others would be inappropriate.

Echoing this, representatives of various e-commerce sites like Chotot and real estate platform Batdongsan.com also said that their websites’ role is to provide information on products being put up for sale or lease and are not directly involved in the transactions between sellers and customers.

Therefore, they cannot supervise the entire operations of sellers and do not have any information related to their actual revenue, bank account details, or tax numbers.

“We propose the tax authorities to reconsider requiring platforms which function only as intermediaries between buyers and sellers,” said a representative of a platform that does not offer a payment function.

The Big 4 e-commerce platforms including Tiki, Lazada, Sendo, and Shopee allow users to make payments through their platforms via diverse payment options including cash on delivery, credit card, or a partner e-wallet. So far, the four giants have not made public comments on the new tax rules.

Ta Thi Phuong Lan, deputy director of the General Department of Taxation's Department on SMEs, Business Households, and Individuals, said that while they do not directly pay income to vendors, e-commerce platforms have direct visibility over their operations, putting them in position to pay tax on their behalf.