Is securities trading subject to value-added tax in Vietnam?
Is securities trading subject to value-added tax in Vietnam?
Based on point c, clause 8, Article 4 of Circular 219/2013/TT-BTC which stipulates objects not subject to value-added tax as follows:
Objects not subject to VAT
...
- The following financial, banking, and securities trading services:
...
b) Individual lending activities, not business operations, or regular service provisions by the taxpayer who is not a credit institution.
Example 5: Joint Stock Company VC has idle funds temporarily not utilized for business activities. Joint Stock Company VC signs a contract to lend Company T for a period of 6 months and receives interest, the interest received by Joint Stock Company VC is not subject to VAT.
c) Securities trading activities include: securities brokerage, proprietary trading, securities underwriting, investment advisory services, securities custody, management of securities investment funds, management of securities investment companies, management of securities investment portfolios, marketplace services of stock exchanges or securities trading centers, services related to securities registered, deposited at the Vietnam Securities Depository, lending money to clients for margin trading, advancing against securities sales proceeds, and other securities trading activities according to securities law.
Information provision activities, organizing the auctioning of shares by issuing organizations, technical support services for online securities transactions on the Stock Exchange.
...
Thus, according to the above regulations, securities trading activities including securities brokerage, proprietary trading, securities underwriting, investment advisory services, securities custody, management of securities investment funds, management of securities investment companies, management of securities investment portfolios, marketplace services of stock exchanges or securities trading centers, services related to securities registered, deposited at the Vietnam Securities Depository, lending money to clients for margin trading, advancing against securities sales proceeds, and other securities trading activities according to securities law are not subject to value-added tax.
Is securities trading subject to value-added tax in Vietnam? (Image from the Internet)
When is the time to determine value-added tax in Vietnam?
According to the provisions of Article 8 of Circular 219/2013/TT-BTC, the time to determine value-added tax is prescribed as follows:
- For the sale of goods, it is the time when ownership or use rights of the goods are transferred to the buyer, regardless of whether money has been collected or not.
- For provision of services, it is the time when the service provision is completed or at the time the service provision invoice is prepared, regardless of whether money has been collected or not.
- For telecommunications services, it is the time when data reconciliation regarding telecommunications service connection charges per economic contract between telecommunications service providers is completed, but no later than 2 months from the month the connection service charge arises.
- For electricity and clean water supply activities, it is the date of recording consumption on the meter to be recorded on the invoice for billing.
- For real estate business activities, infrastructure construction, housing construction for sale, transfer, or lease, it is the time money is collected as per the project progress or as stipulated in the contract. Based on the collected amount, the business entity declares output VAT incurred during the period.
- For construction, installation, including shipbuilding, it is the time of acceptance, handover of the work, items, volumes of completed construction, installation, regardless of whether payment has been collected or not.
- For imported goods, it is the time of customs declaration registration.
What invoices and documents are used for value-added tax payment in Vietnam?
According to the provisions of Article 14 of the Value-Added Tax Law 2008, invoices and documents when paying value-added tax are prescribed as follows:
- The sale and purchase of goods and services must have invoices and documents in accordance with the law and the following stipulations:
+ Business entities paying tax by the deduction method use value-added tax invoices; the invoice must be fully and correctly recorded according to prescribed content, including additional charges, and extra fees (if any). In cases where VAT liability arises on sales of goods or services that are VAT-taxable but the invoice does not indicate VAT, the output VAT is determined by the payment recorded on the invoice multiplied by the VAT rate, except in cases regulated by clause 2, Article 14 of the Value-Added Tax Law 2008;
+ Business entities paying tax directly on value-added use sales invoices.
- For types of stamps, tickets that are pre-printed payment documents, the payment amount of these stamps, tickets already includes VAT.
- Shall enterprises be entitled for VAT deferral in Vietnam for October 2024 according to Decree 64?
- What are specialized measures during processing of tax refund applications in Vietnam?
- Do tax authorities of Vietnam have the right to publish tax-related regulatory violations on mass media?
- Is the amount received under public service housing policies considered taxable personal income in Vietnam?
- Are invoices issued for internally used goods in Vietnam?
- What principles and basis are used to determine the maximum road user charge in Vietnam?
- Is healthcare service providers for the elderly subject to VAT in Vietnam?
- Is the therapeutic service provides for persons with disabilities subject to VAT in Vietnam?
- What is the currency unit used in tax accounting in Vietnam?
- Which enterprise groups will the General Department of Taxation of Vietnam focus on inspecting and auditing in 2025?
