APFL & Partners > News > THE WEEK IN BRIEF: 12 OCT 2021

Welcome to the latest edition of The Week in Brief, a regular legal update from the APFL & Partners Vietnam office.

This week, we highlight new e-commerce rules for foreign enterprises, and fee reductions for domestic flights in Vietnam. Read on to find out more, or contact our team for more information.

New Rules on E-Commerce for Foreign Enterprises


New regulations on foreign enterprises operating e-commerce activities in Vietnam will come into force in the New Year. These new rules were published late last month in Decree No. 85/2021/ND-CP (“Decree 85”), which adds three articles governing foreign organizations selling goods or services online. 

Decree 85 also supplements new regulations on tax liabilities of foreign enterprises operating e-commerce activities in Vietnam. 

Decree 85

Following Decree 85, foreign enterprises or entities will be classified as owning an e-commerce website in Vietnam if:

  • The enterprise has an e-commerce website registered under a Vietnamese domain name;
  • The enterprise has an e-commerce website featuring content in Vietnamese, and;
  • The enterprise has an e-commerce website which generates more than 100,000 annual transactions from Vietnam.

Foreign enterprises meeting the above criteria must register their activities with the government, and either set up a representative office or appoint an authorized representative in Vietnam. 

Decree 85 also stipulates the criteria for foreign investors to provide e-commerce services in Vietnam. In particular, Article 67c sets out the options for foreign investors looking to provide these services. The two main options include creating a new enterprise or contributing capital to a current e-commerce business. Furthermore, if the foreign investor has a controlling interest in one of the top-five e-commerce providers – defined on access rates, number of sellers, transactions, and total value – the approval of the Ministry of Security is also required.

Meanwhile, Article 67b of Decree 85 states that foreign companies selling goods on an e-commerce trade floor must appoint a commercial agent in Vietnam; must import goods as advertised; and must provide assurances to the trade floor that it is importing and exporting goods in compliance with Vietnamese laws relevant to enterprises without a legal establishment in Vietnam.

Decree 85 was published on 25 September, amending and supplementing Decree No. 53/2013/ND-CP on e-commerce. It will enter into force on 1 January 2022.

New tax regulations

Meanwhile, the Ministry of Finance has also issued new regulations on the tax management of e-commerce companies or enterprises who trade on digital platforms but are not resident in Vietnam. 

Circular No. 80/2021/TT-BTC (“Circular 80”) was issued on 29 September to guide a number of articles of the Law on Tax Management and Decree No. 126/2020/ND-CP dated 19 October 2020. 

It requires foreign service providers to register for electronic tax transactions alongside their tax registration through the General Department of Taxation portal. Once registration has been completed, tax should be paid in convertible foreign currencies using the correct identification code. If foreign service providers fail to do so, under Article 81, the enterprise which purchases its goods or services or provides services on its behalf shall be liable.

Circular 80 will cover overseas suppliers without a permanent establishment in Vietnam, organizations and individuals purchasing goods and services from overseas suppliers, tax organizations and agents acting on behalf of foreign entities with regards to their tax, and commercial banks and others providing financial services for e-commerce activities. Like Decree 85, it will also enter into force on 1 January 2022.

Lower Flight Fees Come into Force

Vietnam’s aviation sector has been hit hard during the fourth wave outbreak of COVID-19. Most international flights have been grounded since 2020 when tourist travel was suspended. Then, during the most recent outbreak, Vietnam’s lockdowns and internal travel restrictions reduced domestic flights still further.

The government has now issued a new Circular regulating the service fees for aviation services in Vietnam for 2021. Effective since 26 September, Circular No. 21/2021/TT-BGTVT (“Circular 21”) sets out the fees for off-peak domestic flights in groups A and B taking off and landing at 50 per cent of those stated in Circular No. 53/2019/TT-BGTVT (“Circular 53”) dated 31 December 2019. 

These fees are based on weight and range from an initial price of 756,000 VND for less than 20 tons to 11,625,000 VND for 250 tons or more. Likewise, additional fees for each ton over and above this initial price range from 32,000 VND to 59,000 VND.

Circular 21 also adjusts the minimum prices of other aviation services to be lower than set out in Circular 53. From 1 January 2022, the fees shall revert to their original prices as set out in Circular 53.

The authorities have now allowed domestic flights to resume on 19 routes, with the first flight from Hanoi to HCMC taking off on 10 October as part of an initial pilot scheme.

For more information about these changes, or to discuss doing business in Vietnam, contact our team on:

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