Following a series of articles on the latest regulations on E-commerce that will take effect from 2022, this article shall continue providing readers with some outstanding policies on E-commerce that have recently come into effect.

1. Changes in the subjects of procedures for notification of E-commerce websites/mobile applications

A sale E-commerce website/mobile application (“app”) is website/app set up by traders or organizations or individuals to promote trade, sell their goods or provide their services. Accordingly, the sale of goods and services on this E-commerce platform is carried out only by the owner of that E-commerce website/app.

Unlike the previous regulations – all E-commerce websites/apps must be notified to the E-Commerce and Digital Economy Department of the Ministry of Industry and Trade to be officially allowed to operate, the new provisions of Decree 85/2021 only require E-commerce websites/apps with online ordering functions to carry out the said procedure. The online ordering function is a function that allows the customer to initiate the contracting process under the terms published on the website/app, including the conclusion of the contract with the automated information system. Accordingly, websites/apps are designed to serve the purpose of providing information; marketing products to customers without the function of ordering online will not have to be notified as prescribed. This is new and progressive regulations on E-commerce that help competent authority to focus on managing real E-commerce transaction – implemented in the E-commerce environment.

2. Obligations to declare and pay income tax for sellers and service providers on E-commerce platforms

To sell goods or provide services on E-commerce platform, the trader/organization/individual is bound to not only provide full information about their goods and services as well as fully meet the business conditions as prescribed by law but also fulfill financial obligations to the Government–i.e. declare and pay taxes arising from the income earned by the sale of goods and services on the E-commerce platform.

Besides the legal provisions on tax obligations for sellers who are companies, lawmakers have recently issued two legal documents: Circular 40/2021/TT-BTC and Circular 100/2021/TT-BTC, which provide guidance on business households and individuals to fulfill their financial obligations when operating in E-commerce environment. Accordingly, business households and individuals earning income from the sale of goods and services on E-commerce platform(s) must declare and pay income tax under law. It may make this tax declaration and payment by:

(i) Business households and individuals have incomes; or

(ii) Organizations including owners of E-commerce platforms shall make tax declarations on behalf of individuals under authorization as prescribed by the Civil Code.

In case the owner of the E-commerce does not declare tax on behalf of sellers and service providers on E-commerce platforms under the authorization, the tax authority will coordinate with the E-commerce platform in sharing and providing information of the business individual through the platform under the guidance of the General Department of Taxation for tax administration under law.

The Government’s promulgation of detailed regulations to business individuals on the implementation of financial services for their income through E-commerce activities has created conditions for them to fulfill their civic obligations as well as contribute to avoiding losses to the State budget in the growth of E-commerce activities now, we can say.

The above are some latest rules on E-commerce that companies and individuals who are participating in or wishing to enter this potential business market should be aware of. For detailed information or to avoid possible mistakes in the business process, you can refer to the legal documents listed in the article or ask for guidance from the competent authority.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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