Law on Tax Administration 2025 and Implementing Regulations

Law No. 108/2025/QH15, effective July 1, 2026 (with specific provisions on e-commerce and household businesses effective January 1, 2026), replaces the 2019 Law. It focuses on three pillars: facilitating taxpayers, enhancing management efficiency, and digitizing management processes.

1. Scope and Subject Modernization

The law explicitly identifies a broader range of taxpayers to encompass modern business models:

• Foreign Entities: Foreign organizations and individuals conducting business or earning income in Vietnam, including those on e-commerce and digital platforms.

• E-commerce Stakeholders: Specifically includes platform owners who must now take responsibility for the tax obligations of participating sellers.

2. Taxpayer Grouping and Risk Management

The tax authority will now categorize taxpayers into specific groups to allocate management resources effectively. Criteria for grouping include:

• Industry, sector, and specific business methods.

• Legal type and ownership structure.

• Scale of operations and revenue.

• Compliance History: The most critical factor for determining priority regimes or heightened supervision.

3. Digitalization and Information Systems

The law mandates the development of a "Tax Management Information System" (TMIS), an integrated digital platform that:

• Automates Processes: Facilitates automated tax assessment, exemption processing, and refunding based on risk criteria.

• Digital Interconnection: Connects with national databases and commercial databases to ensure data fidelity.

• Electronic Transactions: Mandates that all interactions between taxpayers and tax authorities occur electronically, unless exceptional circumstances apply.

4. Key Procedural Changes

The Law on Tax Administration 2025 introduces several notable changes aimed at strengthening tax compliance, improving the efficiency of tax administration, and enhancing taxpayer rights.

Firstly, taxpayers are permitted to supplement or amend previously submitted tax filings within a period of five years from the original filing deadline, provided that the tax authority has not yet issued a decision announcing a tax audit or inspection. This amendment provides taxpayers with greater flexibility to voluntarily rectify errors and reduce potential tax exposure.

Secondly, the Law establishes new tax withholding obligations for e-commerce platforms. Specifically, digital platforms that facilitate both ordering and payment functions are required to withhold, declare, and remit taxes on behalf of household businesses and individual business operators conducting transactions through their platforms. In contrast, where a platform does not provide these functions, the relevant household businesses and individual business operators remain directly responsible for their own tax filing and payment obligations.

Lastly, the Law further strengthens taxpayer protections by expanding taxpayer rights. Taxpayers are expressly granted the right to access, view, and print electronic documents available through the Tax Management Information System (TMIS). In addition, taxpayers have the right to refuse tax audits or inspections that are not supported by a formal written decision issued by the competent tax authority, thereby reinforcing procedural transparency and legal certainty within the tax administration framework.

5. Audit and Enforcement Mechanisms

• Remote Audits: Priority is given to online and remote inspections via digital data.

• Transfer Pricing: Specific focus on "arm's length" principles and the "substance-over-form" doctrine to prevent tax erosion through linked transactions.

• Exit Bans: Temporary exit bans apply to individual business owners, legal representatives, and beneficial owners of enterprises under tax enforcement (debts exceeding certain thresholds).

• Administrative Sanctions: Fines range from 10% to 20% for under-declaration, and 1 to 3 times the tax amount for evasion. The statute of limitations for evasion is 5 years

General notes:

• The above is summarised from the current legislations and practices for internal reference only.

• This document cannot be relied upon by any other parties nor included in any submissions, reports, documents or letters required by the relevant regulatory bodies without our prior written consent and/or subject to our approval on the appropriate form and contents; and

• Please kindly noted that SP&A is not a legal firm, our comments provided under this document may include reviewing regulatory documents to be identified as general management consultancy, therefore, should not be considered, nor intended to be, a legal advice.