Individual traders on e-commerce trading floors required to pay flat tax or under tax declaration method

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From August 1, e-commerce trading floors must provide online information to tax authorities. Photo: Internet.

Tax declaration is required

Clause 1, Article 8 of Circular 40/2021/TT-BTC issued by the Ministry of Finance says the owners of e-commerce trading floors are required to declare and pay taxes on behalf of individual taxpayers in line with the taxman’s roadmap.

The Director of Tax Administration Department on small and medium enterprises and business households and individuals, Nguyen Thi Lan Anh, cited Circular No.40 as saying that e-commerce trading floors are responsible for paying and declaring value added tax, personal income tax on behalf of individuals trading goods and services via e-commerce trading floors. These tax amounts will be based on the tax rate of each sector and business line.

E-commerce trading floors will base on the revenue and other revenues of individuals via these platforms such as revenue from shipping units, payment intermediaries and other payment methods to determine revenue.

All revenues and declared and paid tax amounts of each order on an e-invoice issued to buyers and sellers will be recorded by e-commerce trading floors.

From now to before July 1, 2022, if buyers require invoices, they must provide paper invoices issued by the taxman, Director Nguyen Thi Lan Anh said.

Also, from July 1, 2022, e-commerce trading floors must comply with regulations on e-invoices as prescribed in the Law on Tax Administration and Decree No. 123/2020/ND-CP and the guidance circulars of the Ministry of Finance.

From August 1, 2021, all e-commerce trading floors must submit online information to the taxman with the standard data formats required by the tax authorities.

Information provision is expected to be done monthly. The information provided to the taxman includes full name; personal identification number or identity card or citizen identification number or passport; tax code; address; email; phone number; provided goods and services; revenue; seller's bank account; and otherwise relevant information.

If the current database of e-commerce trading floors has not met the provisions of the Law on E-commerce, e-commerce trading floors must add information no later than August 1, 2021.

Responsibility of individual traders in e-commerce trading floors is specified

The new provisions specify responsibilities of individual traders. These traders must have a fixed business location and have a tax code. Individual traders doing business via e-commerce trading floors that may be business households will pay flat tax or pay under the tax declaration method.

Information provided to e-commerce trading floors is also specified in Article 37 of Decree No. 52/2013/ND-CP, including name, address of head office or permanent residence of the individual, business registration certificate or Individual Taxpayer Identification Number, phone number, information about goods, services and prices, shipping and delivery and payment methods.

If the e-commerce trading floors paid and declared taxes on behalf of individual traders, traders will base on the revenue, paid tax amounts showed on invoices to declare and adjust revenue and tax rate at the tax authority managing fixed business locations.

If e-commerce trading floors have not paid taxed for individual traders, the traders will base on the business results showed on documents issued by floors and results at fixed business locations to declare and pay tax at the tax office.