I. Legal basis

• Circular No. 40/2021/TT-BTC
• Decree No. 117/2025/ND-CP
• Decree No. 68/2026/ND-CP
• Decree No. 141/2026/ND-CP

II. Is online business subject to taxation?

Individuals and household businesses selling goods online through e-commerce platforms are required to pay taxes in accordance with the provisions of Decree No. 117/2025/ND-CP, which takes effect on 1 July 2025. Specifically:

• Where sales are conducted through e-commerce platforms with payment functions (e.g., Shopee and TikTok Shop), such platforms shall withhold, declare, and remit taxes on behalf of the seller immediately upon the successful completion of each transaction.
• Where sales are conducted through platforms that do not provide payment functions (e.g., Facebook and Zalo), individuals and household businesses shall be responsible for filing tax declarations and paying taxes directly to the tax authority via electronic means.
• Taxes payable include: value-added tax (VAT), personal income tax (PIT), and other taxes depending on the type of goods or services involved. Tax rates are determined based on revenue and vary according to the nature of the goods or service transactions.

III. At what revenue threshold does online business become subject to Value-Added Tax (VAT)?

Under the Law on Value-Added Tax and Decree No. 68/2026/ND-CP (as amended and supplemented by Decree No. 141/2026/ND-CP), value-added tax (VAT) is imposed on most goods and services consumed in Vietnam. However, for individuals and household businesses, there is an important tax exemption threshold.

Individuals and household businesses with annual revenue of VND 1 billion or less are not subject to VAT. This means that if you are just starting an online business and generating only modest revenue, you will not be required to pay this tax.

Conversely, if your annual revenue exceeds VND 1 billion, you will be required to declare and pay VAT at a percentage rate calculated on your revenue. The standard VAT rate is 10%; however, a reduced rate of 5% or a 0% rate may apply to certain goods and services, including exported goods, depending on the nature of the products involved.

IV. How is Personal Income Tax (PIT) on online sales calculated?

Pursuant to Decree No. 68/2026/ND-CP, individuals and household businesses with annual revenue exceeding VND 1 billion are required to pay not only VAT but also personal income tax (PIT).

There are two methods for determining personal income tax (PIT):

• Presumptive tax method (revenue-based taxation): This method applies to small household businesses that do not maintain clear accounting records or supporting documentation. The applicable PIT rate generally ranges from 0.5% to 1.5% of revenue, depending on the business sector and type of activity.
• Declaration method (based on taxable income): This method applies to individuals who maintain proper accounting books and records, with adequate invoices and supporting documentation. The applicable tax rate is 20% of taxable income, which is calculated as revenue less deductible and legitimate business expenses.

The VND 1 billion annual revenue threshold serves as the basis for determining VAT and PIT obligations. If your annual revenue is below this threshold, you are only required to pay the business license tax (if applicable) and are not subject to VAT or PIT.

V. What types of taxes must be paid when operating a business in the form of an enterprise?

If the business is registered in the form of an enterprise (such as a limited liability company or a joint-stock company), the enterprise will be subject to corporate income tax (CIT) rather than personal income tax (PIT).

Under the Law on Corporate Income Tax, the standard corporate income tax (CIT) rate is 20% of taxable profits (i.e., revenue less deductible and legitimate business expenses). However, certain tax incentives are available to small-sized and micro-sized enterprises, including:

• Micro-sized enterprises: Enterprises with annual revenue of less than VND 3 billion are eligible for a 15% CIT rate.
• Small-sized enterprises: Enterprises with annual revenue ranging from VND 3 billion to VND 50 billion are eligible for a 17% CIT rate.

VI. Which online goods are subject to Special Consumption Tax (SCT)?

Pursuant to the Law on Special Consumption Tax, certain goods are subject to special consumption tax upon sale, including:

• Alcoholic beverages, including wine and beer;
• Cigarettes and cigars;
• Passenger automobiles with fewer than 24 seats;
• Motorcycles with an engine displacement exceeding 125 cm³;
• Air conditioners with a capacity of 90,000 BTU or less;
• Playing cards and votive paper offerings (joss paper).

SCT rates are relatively high, ranging from 10% to 150%, depending on the type of goods. For example, the special consumption tax rate is 65% for alcoholic beverages with an alcohol content of 20 degrees or more, and 65% for beer. If you engage in the online sale of such goods, you are required to declare and pay SCT to the local tax authority with which your business is registered.

VII. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

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