As of 1 January 2022, Decree 85 aims to tax Vietnam-sourced income from local individual customers regardless of the merchant is local or foreign and will impact e-commerce activities. A draft Decree related to import and export via e-commerce activities will have a further impact but clarify certain points as well.
The Vietnamese e-commerce market has recorded remarkable growth in recent years, partially due to the immediate consequences of the COVID-19 outbreak. As a result, the domestic legal framework requires several amendments and further regulations to ensure consistency between the applicable laws.
Decree 52/2013/ND-CP on e-commerce dated 16 May 2013 (Decree 52) has served as the main legal basis for e-commerce activities for almost a decade. It has now been amended by Decree 85/2021/ND-CP dated 25 September 2021 (Decree 85).
Moreover, the Ministry of Finance has circulated a draft decree regulating the management of exported and imported goods transacted via e-commerce (Draft Decree). It addresses the surge in the volume of imported and exported goods sold via e-commerce.
Decree 85 came into effect on 1 January 2022, while the Draft Decree is now pending further comments and revisions.
In this update, we will first set out the relevant points on Decree 85 and on the Draft Decree.
1. E-commerce Activities Specifically Regulated
1.1 Governing Scope
Decree 85 shows a focus on regulating the development, application, and management of e-commerce activities, by excluding activities in the following sectors or specific activities from its application:
finance, banking, credit, insurance, lottery, money exchange, gold exchange, foreign currencies exchange, and other payment means; and
betting, gaming with prizes services, digital content distribution and publication services, broadcasting and television services.
1.2 Definition of E-commerce Services
A noteworthy provision of Decree 85 is its definition of e‑commerce services, which are activities in which traders, individuals, or organizations provide e‑commerce services and set up an e-commerce website that offers a place for other traders, organizations, and individuals to carry out trade, sales of goods or offering services.
This definition excludes businesses that are merely involved in website and application design and therefore do not directly participate in the business operations of these websites.
These changes were necessary, as Decree 52’s provisions were vague on the governing scope and lacked an explicit definition of e-commerce services.
2. New Forms of E-commerce Trading Platforms
Under Decree 85, a website is deemed to be an e-commerce trading platform if it:
allows the participants to open booths to showcase goods and/or services;
allows participants to open an account to perform the process of entering into a contract with a customer;
has a sales section, where participants are allowed to post information on the sale and purchase of goods and services; and
is a social network website having one of the activities listed above, and whose part