Vietnam's Digital Economy Delivers Nearly 135 Trillion VND in Tax Revenue

Online commerce brings a larger return to the state budget

Vietnam collected nearly 135 trillion VND, about 5 billion USD, in taxes from ecommerce and other digital activities in the first eight months of 2025, a 63 percent increase from a year earlier. The General Department of Taxation's figures show how expanding online transactions and stronger tax administration are bringing more money into the state budget.

Domestic organizations supplied the largest share, contributing more than 121 trillion VND. Another 170 foreign suppliers paid 8.71 trillion VND, while 918,000 households and individuals contributed nearly 1.78 trillion VND. A further 156,000 households and individuals declared and paid 2.04 trillion VND through the Electronic Information Portal.

Foreign suppliers have already paid more in the first eight months of 2025 than during all of 2024, when their contribution reached 8.69 trillion VND. Their latest payments were 40 percent higher than in the same period of 2024. Since the portal opened in 2022, overseas providers have paid close to 26.15 trillion VND through the system.

The Ministry of Finance had recorded the acceleration earlier in the year: collections reached 74.4 trillion VND in the first five months of 2025, up 55 percent from a year earlier. By the end of August, the larger total showed that the momentum had continued.

Vietnam's changes affect several groups at once. Foreign digital suppliers face a higher value added tax rate, platforms have new duties to collect taxes from sellers, and households are increasingly using electronic tools to file and pay. For consumers, some digital subscriptions and advertising services may become more expensive as suppliers adjust their prices.

Three forces behind the increase

Vietnam's revenue growth rests on three connected developments: more online business, rules that bring domestic and foreign suppliers into the tax system, and enforcement supported by better information from platforms, banks and payment intermediaries.

Shoppers buy through marketplace apps, small businesses sell through social media, and enterprises purchase cloud software, online advertising and digital content. A growing middle class and widespread mobile internet use have helped transaction volumes rise. Ecommerce remains the main driver, alongside online travel, media, ride hailing and food delivery.

One estimate placed Vietnam's digital economy at 30 billion USD in 2023, with a projected rise to 45 billion USD in 2025. Those figures describe an expected increase of 15 billion USD, or 50 percent, over two years. The 2025 figure is a projection rather than a completed measurement.

More transactions give tax authorities more activity to assess. A platform commission, an advertising purchase or a subscription payment can each create a tax obligation. Easier registration and electronic filing help businesses meet those obligations, while transaction and payment records help officials identify revenue that has not been declared.

How the tax framework developed

Vietnam's Law on Tax Administration No. 38/2019 and guidance including Circular No. 80/2021 require overseas suppliers without a permanent establishment in Vietnam to register, declare and pay tax when selling digital services or goods to Vietnamese customers. A permanent establishment means a fixed business presence in the country.

Foreign suppliers have no minimum revenue threshold for registration. Authorities use payment information, customer addresses and access data, including SIM country codes or IP locations, to determine whether customers are in Vietnam. These checks help connect a digital purchase to the country where the customer is located.

The main developments span several years:

• 2019: Law on Tax Administration No. 38/2019 established part of the legal framework for taxing overseas suppliers.
• 2021: Circular No. 80/2021 provided guidance on tax administration.
• 2022: The Electronic Information Portal opened, allowing foreign suppliers to register, file and pay online.
• July 1, 2024: The 2024 VAT Law took effect, broadening obligations for foreign suppliers and platform operators.
• July 1, 2025: Decree No. 117/2025 introduced platform withholding duties, while the VAT rate for foreign suppliers rose from 5 percent to 10 percent.
• August 2025: Registered foreign suppliers reached 170, and digital economy tax collections approached 135 trillion VND for the first eight months.

Electronic registration reaches overseas suppliers

The Electronic Information Portal gave foreign companies selling into Vietnam without a legal presence a direct way to deal with the tax authority. Its launch in 2022 helped narrow a collection gap involving providers that could serve Vietnamese customers without maintaining an office in the country.

Payments from foreign suppliers rose from 1.85 trillion VND in 2022 to 6.89 trillion VND in 2023 and 8.69 trillion VND in 2024. The 8.71 trillion VND collected in the first eight months of 2025 continued that rise. Major platforms and service providers have registered through the system.

The number of registered foreign suppliers increased from 158 in early June to 170 by August 2025. Clearer rules for transactions across borders, together with electronic registration and filing, have supported the expansion of participation.

The 2024 VAT Law also raised the annual turnover threshold at which business households become liable for VAT to 200 million VND. Turnover means sales revenue before expenses are deducted. The higher threshold eases pressure on the smallest sellers, while businesses above it need to keep their records current.

Local tax departments have introduced eTax Mobile and expanded electronic invoicing to make payment simpler for individuals and very small businesses. The smartphone app supports account setup, declarations and payments. Guidance handbooks explain how business households can declare and pay electronically.

Platforms take on tax collection duties

Decree No. 117/2025, effective July 1, 2025, makes foreign and domestic platform operators withholding agents for taxes arising from transactions on their systems. Withholding means collecting the tax from a payment and sending it to the tax authority on the seller's behalf.

The arrangement moves much of the collection work from millions of small sellers to a smaller number of large intermediaries. Platforms must withhold and remit VAT on transactions by resident and nonresident sellers. They must also withhold and remit personal income tax for nonresident individuals, with personal income tax collected where required under the applicable rules.

If a platform cannot determine a seller's revenue from completed transactions, it must apply the highest applicable deduction rate as a fallback. Filing and payment follow a monthly schedule, giving officials a more regular view of transactions and collections.

Households and individuals selling through platforms should expect withholding when an order is confirmed and payment is completed, then reconcile the deductions with their annual obligations. Reconciliation means checking that the tax already collected matches the amount owed and the records of sales.

Platform operators need to build withholding into their transaction systems, check payments against records and submit monthly returns. Seller onboarding and Know Your Customer checks, which establish a customer's identity, help platforms determine each seller's status and location.

The practical work includes several connected tasks:

• Register or confirm seller tax accounts and connect onboarding with identity checks.
• Apply the correct tax rate to each transaction and withhold at settlement.
• File monthly VAT and personal income tax reports and remit the amounts collected.
• Keep transaction, invoice and payment records for audits and customer inquiries.
• Maintain procedures for applying the fallback deduction rate when revenue cannot be determined.

Many sellers will benefit from electronic invoices issued by platforms. Foreign suppliers receiving payments directly from Vietnamese consumers should continue using the Electronic Information Portal for registration and filing.

Why the higher VAT rate matters

Foreign suppliers' VAT rate increased from 5 percent to 10 percent on July 1, 2025, while the corporate income tax component remained at 5 percent. The change is expected to raise collections further and bring the treatment of many foreign digital services closer to Vietnam's standard VAT rate.

Vietnam has historically used a foreign contractor tax formula for many digital services that combines VAT and corporate income tax. VAT is a consumption tax collected through the supply chain and usually borne by the final consumer. Corporate income tax is the tax component applying to the supplier's business income.

An overseas provider charging Vietnamese consumers must account for VAT even without an office in Vietnam. Applying a 10 percent rate to foreign suppliers aims to reduce tax advantages between local and offshore providers and create more consistent treatment.

Some suppliers may adjust prices or billing, while others may change invoices to display VAT separately. A more uniform rate also simplifies compliance for platforms that would otherwise manage multiple reduced rates. Other countries use VAT or goods and services tax, known as GST, to tax digital services sold across borders to local customers.

Audits recover unpaid tax

Vietnam's tax authorities collected more than 759 billion VND in arrears during the first eight months of 2025 from 2,734 enterprises and 872 households and individual businesses. Arrears are taxes owed from earlier periods that have not been paid.

Earlier reviews of 164,661 taxpayers had already produced hundreds of billions of dong in retroactive assessments for enterprises and individual sellers. A retroactive assessment calculates tax due on past activity.

Auditors use electronic invoice data, platform transaction records and banking information to match payments with declared revenue. This gives them several ways to check whether a seller's tax return reflects actual business activity.

Banks and payment service providers can be directed to withhold or report payments involving foreign suppliers that do not comply. Vietnamese business partners must also withhold tax in arrangements where one business buys from another, connecting overseas sales to a party within Vietnam's tax system.

Tax officials are upgrading technical systems to handle more traffic and reconcile payments faster. Authorities have said they will use data analytics and artificial intelligence to identify unusual patterns, flag repeated errors and concentrate reviews on cases presenting a higher risk of unpaid tax.

What changes for sellers and consumers

Domestic ecommerce sellers face a more automatic collection process as platforms withhold VAT and, where required, personal income tax at payment. Many small sellers fall below the 200 million VND annual turnover threshold for VAT liability. Those above it should keep accurate records and reconcile their accounts with monthly platform statements.

Sellers operating on several platforms need to track their combined revenue and tax credits. A tax credit records tax already accounted for under the relevant rules, making accurate statements important when sellers calculate their remaining obligations.

Foreign suppliers should confirm portal registration, obtain a tax identification number and file on schedule. Their contracts, prices and invoices need to reflect the VAT change introduced on July 1, 2025. When services are sold to Vietnamese businesses, the local entity may be responsible for withholding.

Suppliers therefore need to establish which party accounts for VAT and corporate income tax in each payment arrangement. They should also monitor the tax authority's published lists of registered foreign suppliers and manage the different rules for sales to consumers and sales to businesses.

Consumers may encounter price changes in digital subscriptions or advertising services connected with the higher foreign supplier VAT rate. The policy aims to support a fairer marketplace between domestic and overseas providers. Consistent rules and platform collection are also expected to reduce confusion and administrative work for very small sellers.

Businesses can support compliance by keeping portal credentials active, reviewing contracts and prices for the 10 percent foreign supplier VAT rate, and connecting invoice records with platform or bank data. Monthly reconciliation, timely payment through eTax Mobile or the tax authority's website, and retained invoices and platform statements help support filings during audits.

Costs, data protection and classification disputes

Platform operators carry the largest operational burden under the new withholding arrangements. Their systems must identify resident and nonresident sellers, determine the amount subject to VAT, calculate personal income tax where applicable and remit collections each month.

Millions of transactions mean higher compliance costs. Platforms also need retained records, audit logs and customer support procedures so that sellers can query deductions and officials can review them. Sharing data with banks and tax authorities must follow privacy rules.

Household businesses selling through social media need guidance on when withholding applies and how to reconcile collected amounts. Disputes can arise over service classification, customer location or the point when a transaction becomes taxable.

Companies should keep evidence supporting their treatment of transactions, including proof of customer location, and be ready to support their filings during reviews. Foreign suppliers serving both consumers and businesses must manage different collection arrangements. Providers operating in several countries also need to monitor overlapping obligations, particularly when selling additional services or combining services into packages.

Vietnam's approach beside regional and global changes

Vietnam is often described as an early mover in Southeast Asia through its dedicated foreign supplier portal and, since July 2025, platform withholding. Its approach uses VAT and existing income tax rules rather than a separate digital services tax.

Indonesia recorded about 1.75 billion USD in digital economy tax revenue from 2022 through August 2024. That figure covered ecommerce VAT, crypto trading taxes, taxes on lending between individuals through online platforms, and procurement related taxes. Vietnam's roughly 5 billion USD total for the first eight months of 2025 is larger, but includes a very large contribution from domestic organizations and covers different categories and dates.

Across the region, governments are applying VAT to digital services sold across borders and giving platforms collection responsibilities. Vietnam's use of standard consumption taxes keeps its framework closer to existing indirect tax systems and helps avoid trade disputes associated with separate digital services taxes.

International negotiations under the Organisation for Economic Co-operation and Development's BEPS 2.0 Pillar One have slowed. The framework concerns international tax reform. Previous pauses on unilateral digital services taxes have ended in several places, and some countries are reviving or expanding those taxes.

Multinational platforms and content providers consequently face more complicated obligations across markets. Vietnam's reliance on VAT, platform withholding and corporate income tax rules for foreign contractors reduces the risk of overlapping taxation associated with separate digital services taxes, while businesses still need to check how their services are treated elsewhere.

Readers tracking implementation can consult General Department of Taxation and Ministry of Finance notices. Further detail is available in the eight month tax results, a platform withholding decree summary and an explanation of Vietnam's digital taxation framework. Legal analyses also address the 2024 VAT Law and foreign supplier obligations.

Key Points

• Vietnam collected nearly 135 trillion VND, about 5 billion USD, from ecommerce and digital activities in the first eight months of 2025, up 63 percent.
• Domestic organizations contributed more than 121 trillion VND, while 170 foreign suppliers paid 8.71 trillion VND.
• Foreign suppliers have paid close to 26.15 trillion VND through the Electronic Information Portal since its launch in 2022.
• Foreign supplier VAT rose from 5 percent to 10 percent on July 1, 2025; the corporate income tax component remained at 5 percent.
• Decree No. 117/2025 gives platforms withholding responsibilities and requires monthly filing and payment.
• The annual turnover threshold for business household VAT liability is 200 million VND.
• Tax authorities recovered more than 759 billion VND in arrears in the first eight months of 2025.
• Vietnam relies on VAT, income tax rules and platform collection rather than a separate digital services tax.