HCMC – The Government has proposed amendments to the corporate income tax law, including a provision to tax foreign e-commerce and digital platforms earning income in Vietnam.
The draft law was presented to the National Assembly today, November 22. Deputy Prime Minister Le Thanh Long explained that the proposed changes aim to ensure tax compliance from foreign businesses selling goods or services through digital platforms in Vietnam. The draft law introduces the concept of taxing “permanent establishments,” including e-commerce and digital technology platforms operating within the country.
The NA Finance and Budget Committee has urged a clarification on how to effectively collect taxes from foreign entities without local branches or offices in Vietnam. Le Quang Manh, chairman of the committee, pointed out that global practices typically limit corporate income tax to foreign service providers, while goods transactions are treated as import-export activities subject to indirect taxes.
The draft law seeks to address income generated by “virtual permanent establishments,” businesses that operate without a physical presence in Vietnam. However, the committee acknowledged challenges in implementing this due to existing international tax agreements, which may restrict Vietnam’s ability to enforce such provisions.
The National Assembly is expected to discuss the draft amendments further in upcoming sessions.
