Shopee, Tiki, Lazada to pay taxes on behalf of sellers

E-commerce platforms like Shopee, Tiki, and Lazada will declare and pay taxes on behalf of partner sellers, according to a Ministry of Finance proposal.

The ministry is set to submit a proposal on amendments to a number of articles in Decree No.126 detailing the Law on Tax Administration, including the above-mentioned change.

According to the ministry, this is an optimal solution for managing tax payments efficiently, contributing to reforming administrative procedures.

With this regulation, instead of hundreds of thousands of individuals directly declaring tax with authorities, the e-commerce platform is the only entity to do so and pay taxes on their behalf to reduce administrative procedures for tax authorities and taxpayers.

The ministry argued that this regulation is not contrary to current regulations under tax laws because all trading activities, from ordering, transportation, payment to settlement of complaints about goods and services are occurring through the e-commerce platform and buyers only make transactions through it.

It said that since last year, the ministry has drafted and consulted with trading individuals and business households on tax management, including the collection of taxes from traders on e-commerce platforms.

The ministry formerly proposed a plan that all e-commerce platforms must pay taxes on behalf of partner sellers to avoid tax loss. However, this proposal raised enormous controvery among companies and experts.

After receiving feedback, the finance ministry proposed to divide e-commerce platforms into two types: platforms with online ordering function and those without this function.

Platforms like Chotot and Batdongsan.com do not directly participate in transactions, but only allow the posting of information on goods and services, so they do not have to declare and pay tax on behalf of partner sellers.

In addition, these e-commerce platforms do not control or have information on revenues, bank accounts, citizen identity information, tax codes, addresses of individual sellers.

In 2020, Shopee had about 210,000 individual sellers, while the figure for Tiki exceeded 8,800 and Voso, over 3,210, according to the General Department of Taxation.

It is estimated with 100 active e-commerce platforms, the number of business individuals must be up to hundreds of thousands.