Vietnam’s tax authorities are increasing their control over organizations and individuals receiving commissions from livestream sales. 

Livestream selling activity. Photo: Pham Hung/The Hanoi Times

This directive was outlined in a document from the General Department of Taxation to local tax departments, emphasizing stricter controls on sales and commissions from livestream activities on e-commerce platforms.

After inspections, the tax authorities will compile a list of organizations and individuals suspected of violations. If tax evasion is found, their files will be handed over to the police.

Livestream sales involve selling products via live video broadcasts on social media platforms, e-commerce websites, or TV channels. These broadcasts typically feature individuals or groups selling their own products, or influencers (such as bloggers and TikTok personalities) who earn commissions by promoting products.

According to NielsenIQ data, 95% of online shoppers purchased products through these channels in the first quarter of the year. There are an average of 2.5 million livestream sales sessions each month involving over 50,000 sellers participating, according to the Vietnam E-commerce Association.

Current regulations require online sellers to pay value-added tax (VAT) and personal income tax if their annual revenue exceeds VND100 million ($4,200). Individuals earning commissions from livestream sales must pay personal income tax on a progressive scale ranging from 5% to 35%. If commissions are paid to business households, they must declare and pay taxes at a rate of 7%, including 5% VAT and 2% personal income tax.

These control measures are part of efforts to tighten the management of e-commerce and prevent tax losses. Recently, many organizations and individuals involved in online sales, including livestream sales, have been audited and required to pay back taxes due to undeclared income. In the first six months of the year, nearly 43,000 businesses and individuals were audited for tax declaration and payment, resulting in the collection of approximately VND9.98 trillion ($420 million), an increase of about VND3.48 trillion ($147 million) compared to the same period last year. The tax authorities also handled 4,560 violation cases, resulting in the collection and fines of nearly VND300 billion ($12.6 million).

Additionally, to further regulate sales on e-commerce platforms, the General Department of Taxation requires all online sellers to issue electronic invoices for 100% of their transactions. This aims to gradually control input invoices, tax declaration, and payment from production to distribution or import to sale.

Concurrently, the tax authorities are enhancing connectivity and integration of data on taxpayers, cross-border e-commerce transactions, with banks, and payment service providers. They use this data to verify, cross-check, and collect taxes, and penalize cases of insufficient or undeclared tax payments.

Data from the General Department of Taxation shows that e-commerce tax revenue in the first half of this year was VND180 trillion ($7.12 billion), with around VND50 trillion ($2.1 billion) in taxes collected.