What securities depository services are subject to VAT in Vietnam from July 01, 2025?
What is securities depository?
Based on the provisions of Clause 34, Article 4 of the Law on Securities 2019, securities depository is the act of accepting deposits, safekeeping, and transferring securities on behalf of clients, assisting them in exercising rights related to the deposited securities.
What are the conditions for registering securities depository services in Vietnam?
According to Article 57 of the Law on Securities 2019, the conditions for registering securities depository services are as follows:
- A commercial bank or branch of a foreign bank can register securities depository services upon meeting the following conditions:
+ Have a License for Establishment and Operations in Vietnam that includes securities depository activities;
+ Meet the minimum capital safety ratio as prescribed by banking law, and have profitable business operations in the most recent year;
+ Have premises, equipment, and facilities serving the securities depository and transaction settlement activities.
- A securities company can register for securities depository activities when it is licensed to conduct brokerage activities.
What securities depository services are subject to VAT in Vietnam from July 01, 2025? (Image from the Internet)
Shall securities depository services be subject to VAT in Vietnam from July 01, 2025?
According to Clause 8, Article 5 of the Law on Value Added Tax 2008, as amended by Clause 1, Article 1 of the Law on Amending the Value Added Tax 2013, regarding financial, banking, and securities services not subject to VAT:
- Credit services include lending; discounting, rediscounting transferable tools and other valuable papers; guarantees; financial leasing; issuance of credit cards; domestic factoring; international factoring; and other credit services as regulated by law;
- Lending services provided by non-credit institutions are not subject to tax;
- Securities trading includes: securities brokerage; proprietary trading of securities; securities issuance underwriting; investment advisory on securities; securities depository; fund management of securities; portfolio management of securities; market organization services of stock exchanges or securities trading centers; other securities business activities as prescribed by Law on Securities;
- Transfer of capital includes partial or full transfer of the investment capital, including the sale of an enterprise to another enterprise for business or trading; forms of capital transfer as per law;
- Sale of debts;
- Foreign currency trading;
- Derivative financial services include: interest rate swaps; forward contracts; futures contracts; options to buy, sell foreign currencies; other derivative financial services as per law;
- Sale of secured assets of the debt of organizations fully owned by the state established by the Government of Vietnam to handle bad debts of Vietnamese credit institutions.
However, according to point c of Clause 9, Article 5 of the Law on Value Added Tax 2024, regulations on financial, banking, and securities services exempt from VAT have changed as follows:
Exemptions from VAT
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9. The following financial, banking, securities, and commercial services:
a) Credit services as prescribed by the law on credit institutions and fees specified in loan agreements between the Government of Vietnam and foreign lenders;
b) Lending services provided by non-credit institutions are exempt;
c) Securities business includes securities brokerage, proprietary trading of securities, securities issuance underwriting, investment advisory on securities, fund management of securities, portfolio management of securities as per the Law on Securities;
d) Capital transfer includes partial or total transfer of funds invested in other economic organizations (regardless of whether a new legal entity is established), securities transfer, contribution rights transfer, and other forms of capital transfer as per law, including the sale of enterprises to other enterprises for business and production where the buyer inherits all rights and obligations of the selling enterprise according to the law. Capital transfer as described in this item does not include project transfer, asset sale;
dd) Debt sale includes selling accounts payable and receivables;
e) Foreign currency trading;
g) Derivative products as per law on credit institutions, Law on Securities, and commercial law, including: interest rate swaps; forward contracts; futures contracts; options and other derivative products;
h) Sale of secured assets of debt organizations fully owned by the state established by the Government of Vietnam with functions to buy, sell debt to handle bad debts of Vietnamese credit institutions.
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The Law on Value Added Tax 2024 will take effect from July 01, 2025, except for provisions regarding the revenue levels of households, individuals producing or doing business not subject to tax in Clause 25, Article 5 of the Law on Value Added Tax 2024 and Article 17 of the Law on Value Added Tax 2024 which will be effective from January 01, 2026.
Thus, securities depository activities will be subject to VAT from July 01, 2025.
