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October 29, 2021

Vietnam releases a Circular on digital tax

The Ministry of Finance in Vietnam released Circular 80/2021/TT-BTC on 29 September 2021 regarding the implementation of the country’s tax law, including a section on digital tax.1

The rules apply in cases where an overseas business that does not have a Permanent Establishment (PE) in Vietnam carries out the following activities to organizations, or individuals in Vietnam:

1. E-commerce

2. Digital platform-based businesses

3. Other related services

The Circular has a tax registration and declaration requirement that will be imposed once the online portal of the Tax Authority goes live (expected to be 1 January 2022). The overseas supplier can directly register for tax filings or authorize a Vietnamese party to do so on its behalf. The authorized party is defined to include an organization or a tax agent operating under the laws of Vietnam.

The Circular states that tax payable is calculated on revenue earned by the overseas supplier and different value added tax/corporate income tax rates will be applied depending on the nature of the activities conducted. Three sources of information are to be used to determine and identify transactions of an overseas supplier arising in Vietnam and it is the responsibility of the supplier to retain all related information used for determining Vietnam-sourced income in accordance with the Law on Tax Administration in the event of a future tax audit by the Vietnamese tax authority.

We note that if the overseas supplier comes from a country which has a tax treaty with Vietnam, it may be possible to submit a tax treaty claim for a corporate income tax exemption if it can be demonstrated that it does not operate through a PE in Vietnam.

The Circular also addresses the responsibilities of Vietnamese parties (including Vietnamese counterparties under business to business (B2B) supplies, and commercial banks/payment-service providers under business to consumer (B2C) supplies) in withholding, declaring and paying taxes on behalf of overseas suppliers should the overseas suppliers fail to do so.

The Circular is effective as of 1 January 2022.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Vietnam Limited, Ho Chi Minh City

Ernst & Young Vietnam Limited, Ha Noi



  1. For background on Vietnam’s digital tax, see EY Global Tax Alert, Vietnam implements taxation of digital transactions, dated 13 July 2020.