Southeast Asia comprises 11 countries with a collective nominal e-commerce GDP of $3 trillion as of 2025. Platforms like Tokopedia, Shopee, Lazada, Temu, etc., have contributed significantly to this growth with their consumer-first policies.
Source: Research Gate
However, this gives a need for e-commerce tax regulations in the region for local and foreign e-commerce companies.
Taxation may seem rigorous, but they’re essential if the government wants to channel this growth into the development of the economy at large.
Read on as we discuss more on these regulations, and how you can navigate them.
Key E-commerce Tax Types in Southeast Asia
Despite being members of a collective body known as the Association of Southeast Asian Nations (ASEAN), the tax regulations on eCommerce in Southeast Asia are country-specific. Therefore, if you run an e-commerce business across a couple of southeast asian countries, you’re subject to multiple regulatory environments.
We’ll discuss taxation in some of these countries, but first, here are some key tax types you’re likely to come across.
#1 Value-Added Tax (VAT)
Value-added tax (VAT) is today’s most widely adopted consumption tax. It is measured by the value attached to goods and services as they travel from businesses to the end consumer.
Although the consumer bears most of the burden, they do not pay this tax directly. Instead, the e-commerce company collects it from the customer by adding it to the cost of purchasing a product electronically and then passes it on to the government.
#2 Goods and Services Tax (GST)
Goods and services tax (GST) is another common e-commerce tax regulation in Southeast Asia. However, it is more or less like a value-added tax, depending on the country you’re paying to.
Like VAT, GST is imposed on the cost of goods and services in Singapore and other Asian countries like India and Hong Kong. However, GST is usually lower than VAT and doesn’t apply to all types of goods.
#3 Corporate Income Tax
Also known as corporate tax rate or income tax, it is used globally and in Southeast Asian countries like Singapore, Indonesia, and Vietnam. It is the tax payable on an individual’s or organization’s income, and its rate and method of implementation depend on the country.
#4 Sales and Service Tax
Malaysia’s sales and service tax is levied on goods and services. You could call it the equivalent of VAT or GST, as it is the major consumption tax in this place. However, its rates and mode of implementation differ, as we’ll see in the next section.
The sales tax is levied on goods manufactured or imported, while the service tax is levied on services rendered. The service tax is compulsory for e-commerce businesses, while the sales tax depends on the company’s scope of operation.
E-commerce Tax Regulations Across Southeast Asia
E-commerce tax regulations in Southeast Asia differ by country. While some countries use VAT, others use GST, corporate tax, or sales and service tax. Below are the most recent tax regulations as of March 2025:
E-commerce Tax Regulations in Indonesia
Indonesia’s e-commerce tax regulations consist of a VAT law, which the government can move from 5% to 15%. And starting from January 1 2025, the VAT is now 12%. However, this only affects the importation of goods and the sales of foreign intangible or digital goods.
E-commerce Tax Regulations in Singapore
Singapore’s tax regulations for e-commerce businesses are quite interesting. The country only levies tax on income made in Singapore unless it is moved into the country. Its e-commerce tax is divided into goods and services tax and income tax.
The goods and services tax (GST) is the VAT charged on goods supplied to Singapore and sold to the end consumers. GST-registered businesses are required to charge and account for GST at 9% on all sales of goods and services in Singapore unless the sale can be zero-rated or exempted under the GST law.
However, businesses can only charge this if their yearly revenue exceeds S$1 million. On the other hand, the income tax is charged at 17% per year of income earned in Singapore.
E-commerce Tax Regulations in the Philippines
The Philippines recently introduced its VAT law, which imposes a 12% tax rate on digital services. This includes services provided by residents and non-residents whose services are used by buyers in the Philippines.
E-commerce Tax Regulations in Thailand
In Thailand, there are two major e-commerce tax regulations. This includes the income tax and the value-added tax (VAT). The income tax is divided into two categories: personal and corporate.
Personal income tax is levied for people who make money from e-commerce and is calculated at progressive and flat rates. The progressive tax rate applies to earnings of over 150,000 THB, and the flat rate applies to earnings from 120,000 THB.
| Rate of Income (THB) | Tax Rate (%) |
| 0-150,000 | 0 |
| 150,001-300,000 | 5 |
| 300,001-500,000 | 10 |
| 500,001-750,000 | 15 |
| 750,001-1,000,000 | 20 |
| 1,000,001-2,000,000 | 25 |
| 2,000,001-5,000,000 | 30 |
| Over 5,000,000 | 35 |
Source: Legal 500
The corporate income tax is for general companies or limited partnerships with e-commerce income, usually 20% of their net profit. And the VAT, which is usually taxed on goods and services at every stage of distribution, is currently 7% of the purchase price.
E-commerce Tax Regulations in Vietnam
The Vietnamese government enhances tax compliance by allowing eCommerce platforms like Lazada and Shopee to issue electronic invoices on behalf of sellers. Vietnam requires platforms to deduct, declare, and pay taxes for their sellers. As of January, 2025, a 5% rate applies generally to eCommerce businesses, but a review to increase this taxation policy was passed by the National Assembly in late November 2024 and to become effective from the 1st July 2025.
Sellers in Vietnam are implored to authorize e-commerce platforms to issue electronic invoices on their behalf. Starting January 1, 2025, domestic and foreign platforms must deduct, declare, and pay taxes for sellers. Sellers not eligible for deduction must register and handle tax declarations directly.
E-commerce Tax Regulations in Malaysia
Corporate income tax, personal income tax, and sales and service tax are some of the most enforced taxes in Malaysia. These taxes apply to both individuals working and doing business in Malaysia. The sales and service tax is the most related to its e-commerce businesses.
Recently revised and set at a rate of 10%, it affects all imported low-value goods. Malaysia also imposes custom tariffs on these goods relative to their country of origin.
Here’s a revised comparison of e-commerce tax regulations across Southeast Asia, based on types of tax, applicable businesses, thresholds, and compliance requirements:
| Country | E-commerce tax type | Who it applies to? | Thresholds & rates | Compliance requirements |
| Indonesia | VAT on digital goods & services | Local & foreign e-commerce businesses selling to Indonesia | 12% VAT (as of 2025), can range from 5%-15% | Foreign companies must register & remit VAT if providing digital services |
| Singapore | GST & corporate income tax | Local & foreign businesses selling in Singapore | 8% GST (if revenue exceeds S$1 million), 17% corporate tax on local earnings | No tax on foreign earnings unless remitted to Singapore |
| Philippines | VAT on digital services | Local & foreign digital service providers | 12% VAT on digital services used in the Philippines | Foreign providers must register, collect, and remit VAT |
| Thailand | VAT, personal & corporate income tax | Local & foreign businesses selling to Thailand | 7% VAT, corporate tax: 20%, personal income tax: 0-35% (progressive) | E-commerce businesses must declare taxable income and file returns |
| Malaysia | Sales & service tax (SST), corporate & personal income tax | Local & foreign e-commerce businesses & sellers | 10% SST on imported low-value goods, corporate tax varies | Import tariffs apply to goods based on origin, SST registration required |
| Vietnam | VAT, Corporate income tax (CIT), Import and Export Tax | Local and foreign businesses | Percentage varies (between 5-10%) by type of income | Foreign and local businesses must declare and pay taxes on quarterly basis |
What Do These Tax Regulations Mean for Local Vs Foreign E-commerce Businesses?
You must pay tax whether you run a foreign or local e-commerce business in any southeast asian country. The difference, however, lies in how much you pay and how you pay. In addition, there’s also a threshold revenue you must hit to pay tax in some of these countries.
In Indonesia, for instance, both local and foreign businesses must pay VAT. To sell as a foreign business, you’ll have to register with Indonesian tax authorities and collect and remit VAT on digital products and services.
Conversely, local e-commerce companies in Singapore pay GST once their annual revenue surpasses Singapore’s S$1 million threshold. At the same time, their foreign counterparts must charge GST once they make S$100,000 from Singapore customers. However, they are exempted from the corporate income tax unless they have a physical location in the country.
E-commerce Tax Regulations Penalties
Not complying with the e-commerce tax regulations in Southeast Asia can put your business at unnecessary risk. You may have to pay a fine or even face legal action. For example, in Indonesia, you may have to pay a fine of IDR500,000 for late VAT remittance.
In Singapore, paying your corporate income tax rate late automatically adds a 5% late payment penalty to the unpaid tax. In the Philippines, failure to register for the VAT may cost you your e-commerce business, and paying late will cost you 25% of the overdue tax.
Final thought
As Southeast Asian countries continue to enjoy rapid e-commerce adoption, their governments are constantly looking for ways to maximize this development. Vietnam, one of the fastest-growing e-commerce markets in the region, is considering e-commerce tax reforms on the de minimis threshold. This threshold formerly exempted low-value imports from VAT, but not for long, with the increase in popularity of e-commerce platforms like Shein and Temu.
Compliance with these e-commerce tax regulations in Southeast Asia is also important to foster economic growth and development. Failure to comply could lead to business suspension or shutdown, as Vietnam suspended Temu and Shein in December 2024. Therefore, e-commerce businesses that want to branch into the region must do due research on the region’s tax policies in this region and follow them to the letter.
