An affiliate marketer in Vietnam may be paid through three legally distinct channels: a domestic enterprise paying commission, a foreign platform remitting funds home, or a marketplace paying referral rewards. Each channel puts the tax duty in a different place — pick the wrong channel analysis and the whole filing is wrong.
Governing Instruments
Classifying the income: commission is employment-type income or business income
For an individual without business registration, affiliate commissions and customer referral fees fall into income from salaries and wages. Point c, Clause 2, Article 2 of Circular 111/2013/TT-BTC lists within this category sales-agent commissions, brokerage commissions, advertising service fees and other remuneration the individual receives outside a formal employment relationship. The practical consequence is that this money is not taxed under the business-income regime; it follows the withholding mechanics of employment-type income.
For an individual holding business registration who markets or brokers regularly, the same commission is business revenue: the taxpayer declares and pays value added tax and personal income tax at the rates on revenue prescribed by Circular 40/2021/TT-BTC, where services sit in the highest rate band (5% VAT and 2% PIT on revenue). The boundary between the two regimes is whether the individual is business-registered and how regular the activity is — the same commission can lawfully fall under two different regimes for two different individuals.
Withholding at source and the true scope of Decree 117/2025
Clause 1, Article 25 of Circular 111/2013/TT-BTC provides that organisations and individuals paying fees, remuneration or other amounts to a resident individual who has no labour contract, or a labour contract of under three months, with total payment of VND 2,000,000 or more per payment, must withhold tax at 10% of the income before paying the individual. This is the basis on which a Vietnamese enterprise paying referral commissions to an individual withholds 10% and issues a withholding certificate; the individual settles annually under the progressive scale where required.
A spreading misconception is that every platform payment is withheld by the platform under Decree 117/2025/ND-CP. That decree assigns withholding and remittance on behalf only for business households and individuals SELLING goods or services on a marketplace with a payment function. Affiliate marketers do not sell their own goods on the platform — they supply marketing services to sellers or to the platform; their income sits outside the Decree 117 substitution mechanism and returns to 10% withholding (if the payer is a Vietnamese organisation) or self-declaration (if the payer is offshore).
Application Analysis
The hardest case is a foreign affiliate platform paying commissions straight into an individual account in Vietnam. The payer is offshore and has no Vietnamese presence to withhold, so the duty shifts to the individual: a resident individual earning salary-type income paid by a foreign organisation files directly with the Vietnamese tax authority periodically and settles annually. Many individuals skip this because money arriving from a platform looks like platform income; legally it remains taxable income of a Vietnamese resident, and the bank trail exists independently of any return.
On the enterprise side, referral commissions are deductible selling expenses for corporate income tax when supported by a commission agreement, payment records and the PIT withholding certificate of an individual recipient. Where the recipient is a partner enterprise, the transaction changes nature into a purchase of marketing services: the recipient issues an e-invoice at the standard 10% VAT rate and the payer books the cost against that invoice without PIT withholding. Mixing the two natures — paying an enterprise but withholding as if it were an individual, or the reverse — is the most common assessment error in B2B referral programmes.
Recommended Actions
- Determine the recipient status before paying: unregistered individual, registered business individual or enterprise — each status has its own document set and tax mechanics.
- Put tax clauses into the affiliate or referral agreement: whether commission is gross or net of withholding, who bears the tax, and the duty to issue withholding certificates and invoices.
- For individuals paid by foreign platforms: keep bank statements and platform commission reports, and self-declare directly with the managing tax authority.
- Keep affiliate cash flows in separate accounts from marketplace sales revenue so they are not mixed with Decree 117 revenue when reconciling at settlement.
Frequently Asked Questions
Under which income type is an individual affiliate income subject to personal income tax?
If the individual is not business-registered, affiliate commission is income from salaries and wages under Point c, Clause 2, Article 2 of Circular 111/2013/TT-BTC (the commission, advertising fee and other remuneration group). If the individual is business-registered and active regularly, it is business income, paying VAT and PIT at rates on revenue under Circular 40/2021/TT-BTC.
Must an enterprise withhold tax when paying customer referral commissions?
Yes, where the recipient is a resident individual with no labour contract or a contract under three months: under Clause 1, Article 25 of Circular 111/2013/TT-BTC, payments of VND 2,000,000 or more per payment must be withheld at 10% before payment, with a withholding certificate issued to the individual. Where the recipient is an enterprise, the payer does not withhold but receives the partner service invoice instead.
How is it declared when a foreign affiliate platform pays commissions to a Vietnamese individual?
The offshore payer performs no withholding in Vietnam, so the resident individual self-declares this income with the Vietnamese tax authority as salary-type income paid by a foreign organisation, in the period it arises and in the annual settlement. Records to keep include bank statements for the receipts, the platform commission reports and foreign-exchange conversion documents to substantiate the income when the tax authority reconciles bank flows.
How are affiliate commissions paid to a partner enterprise invoiced and taxed?
Where the commission recipient is an enterprise, the amount is revenue from supplying marketing services: the recipient issues an e-invoice at the standard 10% VAT rate and declares the revenue for corporate income tax periodically. The paying enterprise records a selling expense based on the contract and invoice, and withholds no personal income tax because the recipient is not an individual.
This article has been quality-reviewed by the FLAW AI Legal Council
