Tax management for goods transacted via eCommerce

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However, regulations on the times or shipments of goods exempted from import duty have not yet issued. Therefore, customs declarants have abused this policy to divide shipments into small quantities for enjoying tax exemption.

Imposing tax exemption quota

The draft decree stipulates management of eCommerce goods to prevent abusing tax incentives.

1. Imported eCommerce goods is valued at VND1,000,000 or less on each order;

b.Imported eCommerce goods is valued at over VND1,000,000 and taxed more than VND100,000 on each order by customs.

Each buyer only enjoys import duty exemption for no more than one order/day and no more than four orders/month.

2. If imported eCommerce goods is valued at over VND1,000,000 and taxed over VND100,000 on each order by customs, the import duty will be levied on the entire shipment.

Regulations on the limit of times for enjoying tax-free quota for the goods is equal to goods traded by border residents in Article 9 of the Government Decree 134/2016 dated September 1, 2016.

According to the Ministry of Finance, the promulgation of regulations aims to prevent tax evasion by buyers when trading goods via eCommerce.

In addition, to restrict the abuse of tax incentives for goods sent via express delivery and postal services as per the provisions of the Government Decree 18/2021, and unify the tax incentives policies between goods sent via these services and goods traded via eCommerce, the Ministry of Finance proposes to impose import duty free quota for goods sent via express delivery and postal services to be equal to goods traded via eCommerce.

The Prime Minister's Decision 78/2010 dated November 30, 2010 stipulates the value of imports sent via express delivery services which are subject to tax exemptions.

To ensure consistency with the provisions of this draft Decree as well as the provisions of the law on value-added tax and international practices, so the Ministry of Finance proposes to abolish Decision 78/2010.

Specifying application of tax polices

The application of export tax, excise tax, environmental protection tax and value added tax on eCommerce goods will comply with the provisions of tax law.

Therefore, the taxpayer must fully pay taxes for the entire shipment. According to existing regulations, most exports are applied a 0% tax rate, so the draft decree does not stipulate the content of export tax exemption.

In fact, the eCommerce transactions via eCommerce trading floor, eCommerce website, the buyer orders goods via website and then electronically transfer money to the seller or eCommerce trading floor. After receiving the payment, the seller will issue an e-document and delivery goods to the buyer, then the buyer receives goods, and the transaction is closed.

According to the Ministry of Finance, regulations on the customs value for imports and exports are prescribed in Article 86 of the Law on Customs, Article 20 of Decree 08/2015/ND-CP amended and supplemented in Decree 59/2018/ND-CP, Circular 39/2015/TT-BTC amended and supplemented in Circular 60/2019/TT-BTC.

Accordingly, imported and exported eCommerce goods are assessed customs value like other goods, regardless of the trade method.

ECommerce goods are mainly purchased by individuals for consumption with small amount. Documents confirming the trade are e-orders. Many buyers have ordered goods in flash sales or sale off period, so the goods price is lower than the former price. The buyers are only interested in receiving the goods and paying the exact amount stated on the order or payment documents or other documents, and do not pay attention to exit and entry border gates.

To simplify procedures and facilitate trade for this operation, the draft provides as follows

“1. Customs value for goods exported via eCommerce transaction is the selling price stated on the order or payment documents or other documents, excluding international transport and insurance costs.

2. Customs value of goods imported via eCommerce transactions is the purchase price stated on order or payment documents or other documents, including international transport and insurance costs (if any).

The Ministry of Finance proposes regulations on customs and duty payment in the draft decree the customs declarant pay taxes on behalf of the goods owners will pay the expected tax amount into the customs’ account at the State Treasury.