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In brief

On 19 October 2020, the government issued Decree No. 126/2020/ND-CP guiding some provisions of the Law on Tax Administration (“Decree No. 126“), to be effective on 5 December 2020.

Decree No. 126 covers, the tax declaration and calculation; timeline for tax declaration and payment; tax assessment; tax refund; late payment interest and fines; rights and obligations of tax authorities and taxpayers; obligations of commercial banks and payment intermediary service providers in withholding and paying tax on behalf of offshore e-commerce suppliers; enforcement; and other issues.

In more detail

1.    Responsibilities of commercial banks and intermediary payment service providers (IPSPs) with respect to e-commerce business

In addition to other obligations in reporting information on accounts, account balances and transaction data to tax authorities upon request, commercial banks and IPSPs are required to withhold and pay tax on behalf of foreign suppliers having no permanent establishment in Vietnam. In particular, Article 30.3 of Decree No. 126 provides as follows:

  • Commercial banks and IPSPs will withhold and pay tax on behalf of foreign suppliers without a permanent establishment that conduct e-commerce business, business on digital platforms with individual buyers in Vietnam and have not registered for tax declaration and payment.
  • The General Department of Taxation will collect names and website addresses of foreign suppliers that have not registered and inform banks and IPSPs of such information for identifying transaction accounts of foreign suppliers and withholding tax.
  • In case individuals buy goods and services from foreign suppliers and make payments by card or other forms of payment for which banks and IPSPs cannot withhold tax, banks and IPSPs will be responsible for monitoring amounts remitted to foreign suppliers and reporting them monthly to the General Department of Taxation.
  • Banks and IPSPs will declare and pay tax on behalf of foreign suppliers on a monthly basis.

2.    More cases where tax authorities have the right to publish information on taxpayers

Article 29 of Decree No. 126 provides more cases under which tax authorities can publish information on taxpayers. These include case where taxpayers have not paid tax after more than 90 days of the tax payment due date or after the deadline for implementing an administrative decision regarding taxation; closing down without completing the procedures for tax code deactivation or no operation at the registered address.

3.    Suspension of exit of legal representative

Previously, the measure of suspension of exit only covered fulfillment of individual tax liability. Under Decree No. 126, this measure also applies to legal representatives of enterprises. Accordingly, legal representatives of enterprises that are currently subject to coercive measures to comply with administrative decisions on tax but fail to do so, will also be prevented from leaving Vietnam.

4.    Additional cases of tax assessment

Decree No. 126 supplements cases where the tax authorities can impose tax, such as failure to comply with tax examination/inspection decisions within the prescribed period or failure to declare and determine associated transaction prices for enterprises with related transactions.

5.    Prioritized treatment in custom fields

Article 38 of Decree No. 126 details prioritized treatment in custom field for enterprises. In particular, enterprises may receive a tax refund before an examination and pay tax before the 10th day of the subsequent month, according to Article 9.2 of Law on Import, Export Tax. The frequency of post-customs clearance examinations will also be limited.

5.    Advance pricing agreements (APAs)

Decree No. 126 sets forth fundamental rules for APAs and a new set of prescribed forms as compared with those under Circular 201/2013/TT-BTC.


Thanh Vinh Nguyen is a partner in Baker McKenzie's Ho Chi Minh City office. Prior to joining the Firm, he practiced tax and consultancy work for two international accounting firms and worked as a compliance counsel for an international insurance company. He has co-written Business Operations in Vietnam, published by The Bureau of National Affairs, Inc.


Thanh Hoa Dao is a special counsel in Baker McKenzie's Ho Chi Minh office. Prior to joining Baker and McKenzie, she worked as legal counsel at one of the Big Four firms.