Most sellers sourcing from 1688 and reselling on TikTok Shop or Shopee calculate profit by subtracting the purchase price from the sale price. The number looks fine until tax season arrives, or until the platform's revenue reporting reaches the tax authority, and the actual cash on hand turns out to be well below the margin they thought they were making. This is an overview of the taxes that apply to a household business selling imported goods online in Vietnam, and why building them into your cost model from the start fixes pricing instead of leaving a shortfall at the end of the year.
Why tax cannot stay off your cost sheet
Vietnam's e-commerce platforms have been required since 2022 to either withhold and remit tax on behalf of sellers, or report seller revenue data directly to the tax authority. That means the tax office knows your sales volume whether or not you have filed anything. Selling through TikTok Shop or Shopee is not the same as selling cash at a market stall.
For sellers operating as a household business (ho kinh doanh), the registration threshold is revenue above VND 100 million per year. Below that, no filing is technically required. In practice, a shop that moves goods steadily on one or two platforms clears that threshold within a few months. Starting out with the assumption that tax is not yet relevant is a quick path to accrued liability.
The two main taxes for a household business selling online
Value Added Tax (VAT). Household businesses typically use the flat-rate method (phuong phap khoan) rather than the invoice-based deduction method companies use. Under flat-rate VAT for goods sales, the effective rate applied to revenue is usually 1%. The headline VAT rate is 10%, but the flat-rate mechanism calculates the obligation against estimated rather than actual revenue, which brings the effective burden down. The exact rate depends on the product category and the local tax office.
Personal Income Tax (PIT). Household businesses do not pay corporate income tax. They pay PIT instead. For goods trading, the standard flat-rate PIT on revenue is around 0.5%. Rates can vary by category and locality, so cross-check with the local tax office before filing.
Combined, the typical total tax burden for a household business selling goods comes to roughly 1.5% of revenue (1% VAT plus 0.5% PIT). This is a reference figure, not a guarantee. Treat it as a floor when building your cost model and confirm the actual rate with your local tax office.
Import duty and import VAT
Before any sale happens, there are tax layers that apply when the goods cross the border.
Import duty is set by the HS code assigned to your product and the country of origin. Goods from China imported through formal channels (chinh ngach) pay duty at the MFN rate, or at a lower ACFTA rate if the shipment carries a valid Form E certificate of origin. For common consumer goods such as phone accessories, household items, and apparel, the duty rate typically runs from 0% to 20% depending on the category.
Import VAT is 10%, calculated on (CIF value plus import duty). This applies at customs clearance on formal imports regardless of whether you are a household business or a company.
Both land directly in your landed cost. A batch of goods priced at VND 10 million at the factory gate on 1688, after ocean freight, 10% import duty, and 10% import VAT, can arrive at your warehouse at VND 15 to 17 million before you add the agent service fee or defect allowance. Using the 1688 price as a proxy for cost is one of the most common ways sellers underprice their goods.
Why skipping tax math leads to wrong prices
The issue is not only that you run short when it is time to pay. The issue is that your selling price gets set wrong from the beginning.
A concrete example: a product with a real landed cost of VND 120,000 per unit (after full freight and import taxes). You price it at VND 200,000 and see a gain of 80,000 dong. Then subtract platform and payment fees (roughly 5% to 8% depending on the platform, so about VND 10,000 to 16,000), ad spend per order (say VND 20,000 based on your campaign budget divided by expected orders), and tax on revenue at 1.5% of VND 200,000 (VND 3,000). The real margin left over is below VND 50,000, under 25% of the sale price. Add a few returns or defective units and the number approaches zero or goes negative.
Setting a price before you have counted every layer means you are not pricing. You are guessing. The result is a shop moving a lot of orders, not building cash, because each sale is profitable on a spreadsheet but not in the bank.
A practical way to fold tax into every pricing decision
You do not need accounting software to start. The minimal approach is to treat taxes as fixed cost items in the same column as freight and platform fees.
Step one: build full landed cost. The 1688 product price converted to VND at the current rate (around VND 3,600 per yuan, check before you calculate), plus domestic China freight to the consolidation warehouse, plus sea or air freight to Vietnam (by actual or volumetric weight depending on the goods), plus import duty and import VAT, plus the agent service fee if you use one (typically a few percent of the order value).
Step two: add selling costs. Platform fee for the specific platform you are selling on (TikTok Shop, Shopee, and Lazada each have their own structures that change over time, check the current rate in seller center), payment processing fee, and estimated ad spend per order derived from your campaign budget divided by expected order volume.
Step three: add the revenue tax. For a household business selling goods, add approximately 1.5% of your target selling price as a per-unit tax cost. Calculate it on the selling price, not the landed cost.
Step four: real margin. Subtract everything above from the target selling price. If that number still covers your time and leaves a buffer, the product is worth importing. If not, the price needs to move up before you place the order, not after the stock arrives.
Household business vs company: when the structure matters
A practical question many sellers eventually face is whether to stay as a household business or register as a company.
A household business is simpler to maintain and cheaper to run at small scale. The trade-offs are meaningful as volume grows. Household businesses cannot issue VAT invoices to business buyers, which blocks B2B sales to clients who need deductible invoices. Under the flat-rate method, you also cannot deduct input VAT paid on imported goods against your VAT liability, so every dong of import VAT paid stays in your cost structure permanently.
If your customers include businesses that require VAT invoices, or if your annual revenue reaches a level where the import VAT on your stock is large enough to offset meaningfully against your VAT obligation, switching to a company structure opens up the deduction mechanism. For a standard retail-scale online shop, staying as a household business and pricing with tax baked in from day one is the most practical approach.
Bottom line
Tax is not a surprise at year-end. It is a fixed cost layer that belongs in your cost model alongside freight, platform fees, and ad spend. Sellers who build it in from the start price correctly. Sellers who leave it out underprice, move a lot of volume without accumulating cash, and discover the gap when the tax office or their own bank account makes it visible. Every product selection decision should carry a rough tax estimate, not because the number is large, but because leaving it out means you do not actually know your margin.