Paying fees to TikTok Pte. Ltd: must enterprises pay foreign contractor tax on its behalf?

On 13 August 2026, Tay Ninh Provincial Tax Authority issued Official Letter No. 7279/TNI-QLDN2 in response to an enterprise selling on TikTok regarding foreign contractor tax (FCT) obligations on payments made to TikTok Pte. Ltd. The Official Letter addresses three questions commonly faced by enterprises doing business on the platform: whether they must withhold and pay FCT on TikTok's behalf; whether input value-added tax (VAT) is creditable; and whether platform service fees qualify as deductible expenses.

1. Legal bases cited

The Official Letter relies on three groups of new regulations, all issued on 30 June 2026:

• Clause 3, Article 43 of Decree No. 252/2026/ND-CP (detailing and guiding the implementation of the Law on Tax Administration): organizations doing business in Vietnam that apply the VAT credit method, when purchasing goods or services from foreign suppliers or non-resident individuals on e-commerce platforms, are responsible for withholding and paying on their behalf VAT (Point a), corporate income tax (CIT) of foreign suppliers (Point b) and personal income tax (PIT) of non-resident individuals (Point c). CIT and PIT are determined in accordance with Article 44 of this Decree.
• Points a and b, Clause 1, Article 46 of Decree No. 252/2026/ND-CP: e-commerce platform operators subject to the withholding and payment-on-behalf mechanism must manage the accounts granted by the tax authority, retain transaction data, withhold, declare and pay tax on behalf accurately and fully, and bear legal responsibility for their tax dossiers.
• Point a, Clause 2 and Point c, Clause 3, Article 30 of Circular No. 89/2026/TT-BTC: FCT (VAT calculated directly on revenue, CIT calculated as a percentage of revenue) is declared upon each payment made to the foreign contractor. Enterprises file a finalization declaration upon completion of the contract only if there is a change in the tax amounts already declared and paid, and where multiple payments are made within a month, they may register to declare on a monthly basis. The Vietnamese party withholds and pays tax on behalf of the foreign contractor and files the tax dossiers with its directly managing tax authority.

2. Three conclusions of Tay Ninh Provincial Tax Authority

(i) Obligation to withhold and pay FCT on behalf. The enterprise is not required to declare, withhold and pay FCT on behalf of TikTok Pte. Ltd if TikTok Pte. Ltd directly declares and pays tax via the e-portal on the revenue it receives from the enterprise, and the invoices/documents already include Vietnamese taxes.

(ii) Input VAT credit. Invoices/documents issued by TikTok Pte. Ltd are not VAT invoices under Vietnamese law; therefore, the enterprise is not entitled to credit the input VAT.

(iii) Deductible expenses for CIT purposes. Platform service fees invoiced by TikTok Pte. Ltd are deductible when determining taxable income for CIT purposes, provided that the invoices/documents contain the enterprise's full name, address and tax code, and that valid payment documents are available as prescribed.

💡 Recommendations for enterprises

1. Review TikTok invoices/documents: check whether they show that Vietnamese taxes are included, and whether they contain the enterprise's full name, address and tax code.
2. Retain evidence that TikTok Pte. Ltd has registered, declared and paid tax in Vietnam on the relevant revenue.
3. Make payments via bank transfer or other non-cash channels and retain complete payment documents.
4. Record the VAT amount shown on TikTok documents as an expense rather than declaring it as creditable input VAT.

This newsletter is prepared by Crowe Vietnam for general information purposes only and does not constitute advice for any specific case. Enterprises should refer to the original legal instruments and consult professional advisors before applying the above to their particular circumstances.