Not only small and medium-sized enterprises but also large brands are participating in livestreams. These livestream sessions often involve individuals who are either the owners of the goods or sales representatives for other organizations or individuals (bloggers, TikTokers, social media influencers). Revenue from these livestream sessions can reach tens of billions, even hundreds of billions of VND. Livestreamers also receive commissions corresponding to the sales generated from their livestreams.

According to Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance guiding the personal income tax (PIT), income from brokerage commissions, advertising services, other services, other remuneration, etc., is considered salary income. Therefore, individuals with income from affiliate marketing are subject to PIT regulations for salary income. Tax calculation by deduction method at source of 10% for payments exceeding 2,000,000 VND. Individuals receiving income are responsible for annual PIT settlement according to the progressive tax schedule with 7 brackets (from 5%, 10%, 15%, 20%, 25%, 30%, and 35%). Individuals are entitled to deductions for themselves, dependents, and other deductions as prescribed by law.

If the affiliate marketing commission is paid to a household business (HB), this commission is considered revenue from business activities if the HB has a business registration with a business line suitable for affiliate marketing, has a HB tax registration, and is being managed by the tax authority under a stable fixed tax regime or is a HB that keeps books and accounts. In this case, the organization paying the affiliate marketing commission does so based on the invoice issued by the HB and does not withhold PIT. The HB directly declares and pays taxes to the tax authority at a rate of 7% (5% VAT and 2% PIT).

The rapid development of e-commerce and online business has posed challenges for management, supervision, consumer protection, and tax administration. Tax evasion by individuals operating on e-commerce platforms, including livestream sellers – not only in Vietnam, but also in many countries around the world – has been raised and is being paid attention to for strict and effective management, bringing fairness between business forms and an equal business environment, and compliance with tax laws by taxpayers.

To combat tax evasion and create a fair business environment in the digital market, inspections and audits of e-commerce activities in general and individuals generating income from livestream selling in particular need to be conducted more intensively and frequently with strict penalties.

The Tax Department is continuing to intensify the collection, review, and cross-checking of revenue and payment data of organizations to individuals conducting advertising and selling goods via livestream; publicizing and supporting individuals with income from livestream activities to register for tax, declare and pay taxes into the State budget.

For cases of non-voluntary tax declaration and payment, the tax authority has and will coordinate closely with banks to identify cash flow and income information; guide tax declaration and payment and handle tax violations in accordance with the law. If the violation is determined to be tax evasion at the prescribed level, the tax authority will transfer the case to the police for investigation and prosecution.

In the first half of 2024, the tax authorities have reviewed nearly 43,000 online sellers nationwide who have declared and paid more than VND9,900 billion in taxes, nearly 3 times higher than the same period last year. In addition, the tax authorities have also handled more than 4,500 violations, collecting additional taxes and fines of nearly 300 billion VND.

E-commerce Tax Management: Requires Cooperation from Multiple Agencies

The Tax Department is developing a risk management model for organizations and individuals engaged in e-commerce, applying artificial intelligence (AI) to process big data, and issuing warnings for cases with tax risks; researching and developing tools to automatically collect business data online through websites, e-commerce platforms, and social networks to perfect the e-commerce database.

At the same time, for effective tax management of e-commerce activities, the involvement of all levels and sectors is necessary at the present time to avoid tax evasion and ensure the quality of goods for consumers. The Ministry of Finance (General Department of Taxation) will continue to coordinate with the Ministry of Industry and Trade, the Ministry of Information and Communications, the Ministry of Public Security, and the State Bank to share and connect data to enhance tax management of e-commerce activities.

The Ministry of Finance (General Department of Taxation) is continuing to study and propose amendments to the Law on Tax Management, the Tax Law, and relevant sub-legal documents to strengthen the responsibility for tax declaration, payment, and provision of information to the tax authorities of entities related to e-commerce activities.