What is Bybit Exchange? Is cryptocurrency income taxable in Vietnam?
What is Bybit Exchange?
Bybit is a cryptocurrency exchange headquartered in Dubai, specializing in offering futures, spot, options trading, and other financial derivatives products.
Bybit was established in 2018 and quickly became one of the popular trading platforms among traders thanks to its high liquidity, competitive trading fees, and professional trading tools.
Bybit is rated as one of the secure and reliable exchanges due to its robust security system, user protection insurance funds, and rapid order processing capabilities. However, since Bybit does not have a fixed headquarters in major countries like the United States or Europe, some regions may have restricted access.
Information for reference only!
What is Bybit Exchange? Is cryptocurrency income taxable in Vietnam? (Image from Internet)
What are the responsibilities of the Ministry of Finance in enhancing the management of cryptocurrency-related activities in Vietnam?
Based on Section 2 of Directive 10/CT-TTg of 2018 to mitigate risks and social consequences, promptly detect, stop, and address legal violations, the Prime Minister of the Government of Vietnam requests the Ministry of Finance to focus on implementing the following tasks:
- Instruct public companies, securities companies, fund management companies, and securities investment funds not to engage in illegal cryptocurrency issuance, trading, and brokerage activities, in compliance with anti-money laundering regulations.
- Study international practices and experiences to propose measures for capital mobilization activities through Initial Coin Offerings (ICO).
- Lead and cooperate with related agencies to have measures to restrict importation and manage equipment and machinery for cryptocurrency mining purposes.
Is income from cryptocurrencies subject to personal income tax (PIT) or value-added tax (VAT) in Vietnam?
(1) Regarding personal income tax
According to Clause 1, Article 3 of the Personal Income Tax Law 2007 amended by Clause 1, Article 2 of the Law amending Tax Laws 2014, it is stipulated as follows:
Taxable Income
Taxable personal income includes the following types of income, except for tax-exempt income stipulated in Article 4 of this Law:
- Income from business, including:
a) Income from production and business activities of goods and services;
b) Income from independent professional activities of individuals holding licenses or practicing certificates as required by law.
Income from business stipulated in this clause does not include the income of business individuals with annual revenue of 100 million VND or less.
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(2) Regarding value-added tax (VAT)
According to Article 3 of the Value Added Tax Law 2008 as follows:
Taxable Subjects
Goods and services used for production, business, and consumption in Vietnam are subject to value-added tax, except for the subjects specified in Article 5 of this Law.
According to (1) and (2), up to the current point in time, there is no legal document that stipulates that cryptocurrencies are goods or services used for production, business, and consumption in Vietnam.
Based on Article 3 of the Commercial Law 2005, which defines goods as follows:
Interpretation of Terms
In this Law, the following terms are to be understood as such:
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- Goods include:
a) All types of movable assets, including future movable assets;
b) Things attached to the land.
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Thus, goods only include: all types of movable assets, including future movable assets; items attached to the land and do not cover cryptocurrencies as goods. Currently, there is still no specific regulation on the legal framework for this subject.
Based on Official Dispatch 5747/NHNN-PC of 2017 from the State Bank of Vietnam guiding as follows:
According to the aforementioned regulations, cryptocurrencies in general and Bitcoin, Litecoin in particular, are not currency and not legal payment means under Vietnamese law. The issuance, provision, and use of cryptocurrencies in general and Bitcoin, Litecoin in particular (as illegal payment means) as currency or payment means are prohibited. Sanctions against such acts have been regulated under Decree 96/2014/ND-CP of the Government of Vietnam on administrative penalties in the field of currency and banking and the 2015 Criminal Code (as amended and supplemented). Furthermore, regarding investment in cryptocurrencies, the State Bank of Vietnam has repeatedly warned about the great risks it poses to investors.
Simultaneously, based on Clause 6, Article 26 of Decree 88/2019/ND-CP amended by Point d, Clause 15, Article 1 of Decree 143/2021/ND-CP regulating violations of payment activities as follows:
Violations on payment activities
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- A fine ranging from 50,000,000 VND to 100,000,000 VND for one of the following violations:
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d) Issuing, providing, using illegal payment means without reaching the level of criminal liability;
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Thus, cryptocurrencies are not considered currency and not legal payment means under Vietnamese law, making the trading and exchange of cryptocurrencies illegal.
Therefore, cryptocurrencies are not subjects to PIT or VAT. However, it should be noted that if trading cryptocurrencies does not reach the level of criminal liability, a fine ranging from 50,000,000 VND to 100,000,000 VND may be imposed.
Note: The aforementioned fine is applied to individuals; for organizations, the fine is twice that for individuals (Point b, Clause 3, Article 3 of Decree 88/2019/ND-CP).
