Cross-border e-commerce — where the seller is in one country, the buyer is in Vietnam and the platform operates from abroad — has long been a grey area of tax administration. From 01/7/2026, the new legal framework closes this gap: the Law on Tax Administration 108/2025/QH15 (Clause 3, Article 13), Decree 252/2026/ND-CP (Article 43, replacing Decrees 117/2025 and 126/2020) and the Law on E-Commerce 122/2025/QH15 (Clause 1, Article 39) together establish a mechanism for withholding, filing on behalf and paying on behalf of taxes for cross-border business on digital platforms.
This article analyzes the cross-border focus: who the taxpayers are, how the withholding mechanism operates, the conditions for application and the sanctions for non-compliance.
Expanded taxpayer scope: covering foreign organizations and individuals
Under the new framework, foreign organizations and individuals doing business in Vietnam or earning Vietnam-sourced income are taxpayers — including when the business is conducted through e-commerce platforms or digital platforms. This provision extends tax administration to foreign suppliers and foreign platforms whose tax obligations in Vietnam were previously difficult to determine.
The platform operator withholding, filing-on-behalf and paying-on-behalf mechanism
The centerpiece of the new framework is the tax withholding, filing-on-behalf and paying-on-behalf mechanism imposed on e-commerce platform operators (Clause 3, Article 13 of Law 108/2025; Article 43 of Decree 252/2026). Platform operators are responsible for:
- For household and individual businesses on the platform: withholding, filing on behalf and paying on behalf of value-added tax (VAT) and personal income tax (PIT);
- For foreign suppliers on the platform: withholding, filing on behalf and paying on behalf of VAT and corporate income tax (CIT).
In other words, instead of relying on each small seller to self-declare, the law shifts the withholding and remittance obligation to the platform operator — the party holding the most complete transaction data.
Application condition: the platform must have both functions at the same time
This mechanism applies only when the e-commerce platform has both functions at the same time: (1) online ordering and (2) payment. This is a mandatory “both together” condition:
- A platform with both online ordering and payment functions → the platform operator withholds, files on behalf and pays on behalf;
- A platform lacking either function → sellers declare and pay taxes themselves under the general rules.
Businesses operating or selling through platforms should correctly identify their platform model to know who bears the tax obligation.
Foreign suppliers not yet withheld: self-registration, self-filing, self-payment
Where a foreign supplier has not yet been withheld tax by the platform operator, the foreign supplier must self-register, self-file and self-pay through the Tax Administration Information System as prescribed. This rule ensures no obligation gap: either the tax has been withheld at source through the platform, or the foreign supplier fully performs its obligations to the Vietnamese tax authority.
Sanctions: activity restriction and access blocking
The new framework goes beyond prescribing obligations by adding sanctions strong enough to ensure enforcement. Under Clause 1, Article 39 of the Law on E-Commerce 122/2025/QH15, foreign suppliers or platforms that fail to comply with tax obligations may face activity restriction or access blocking. This is a highly deterrent sanction compelling cross-border platforms to take their tax obligations in Vietnam seriously.
Key differences from the old framework
Compared with the past, the 2026 framework has three fundamental differences: (1) the taxpayer scope is expressly expanded to foreign organizations and individuals doing business on digital platforms; (2) the withholding mechanism is codified with specific application conditions (both functions at the same time); (3) access-blocking sanctions are directly prescribed in the Law on E-Commerce. Old instruments such as the Law on Tax Administration 38/2019, Decrees 126/2020 and 117/2025 and Circular 80/2021 are no longer current bases for these matters.
Frequently asked questions
If a platform only has ordering functions and payments go through a third party, who pays the tax?
When a platform lacks either function (online ordering or payment), the withholding mechanism does not apply — sellers declare and pay taxes themselves under the general rules.
Must foreign suppliers selling to Vietnamese buyers through platforms pay tax in Vietnam?
Yes. Foreign organizations and individuals doing business in Vietnam or earning Vietnam-sourced income are taxpayers; tax is withheld, filed on behalf and paid on behalf through the platform operator (where conditions are met), or the foreign supplier self-registers, files and pays.
What happens for failure to comply with tax obligations?
Under Clause 1, Article 39 of the Law on E-Commerce 122/2025/QH15, non-compliant foreign suppliers or platforms may face activity restriction or access blocking.
Recommendations
Parties involved in cross-border e-commerce should: (1) determine whether their platform has both ordering and payment functions at the same time; (2) review contracts with the platform operator on withholding, filing-on-behalf and paying-on-behalf responsibilities; (3) foreign suppliers should proactively learn the procedures for tax registration, filing and payment through the Tax Administration Information System; (4) compare the full text of Law 108/2025, Decree 252/2026 and Law 122/2025 before applying them.
Note: This article is for general information only and does not constitute legal advice for any specific case. You should consult a lawyer before making decisions.
Transparency note: This content was drafted by AI under the FLAW SEO Autopilot process — reviewed by the QA Council (AI Legal Council) and approved by the owner. It is not a lawyer opinion and is not recorded as lawyer-approved.
Do you need advice on tax obligations for cross-border activities? Contact FLAT Law Firm for support.
