How to determine the unit price stated on the invoice for the sale of derivative securities traded on the stock exchange in Vietnam?
How to determine the invoicing time for derivatives transactions in Vietnam?
According to the provisions of Clauses 2 and 4, Article 9 of Decree No. 123/2020/ND-CP on the invoicing time for the case of securities service provision as follows:
Invoicing time
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2. Invoices for provision of services shall be issued upon completion of the provision of services, whether the payment of the invoiced amount is made or not. In case a service is provided with payments collected in advanced or during the provision of that service, an invoice shall be issued when each payment is collected (excluding payments of deposited amounts or advance payments which are made to ensure the execution of contracts for provision of accounting, audit, financial consulting or taxation services; valuation services; technical survey and design services; supervision consulting services; investment construction project formulation services).
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4. Invoicing time in some specific cases:
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l) In case of provision of banking, securities, insurance or e-wallet money transfer services, electricity supply suspension and resumption services rendered by electricity distributors to non-business individuals (or business individuals) that do not request for invoices, at the end of each day or each month, the service provider shall issue a consolidated invoice based on details on each transaction conducted in the day or month at its data management system. The service provider shall be held responsible for the accuracy of information on transactions and provide lists of services provided at the request of competent authorities. An invoice may be also issued to a client for each transaction at his/her request.
Thus, the invoicing time for securities service provision shall be issued upon completion of the provision of services, whether the payment of the invoiced amount is made or not.
However, for derivatives transactions in Vietnam, in case the client do not request for invoices, at the end of each day or each month, the service provider shall issue a consolidated invoice based on details on each transaction conducted in the day or month at its data management system.
An invoice may be also issued to a client for each transaction at his/her request.
How to determine the unit price stated on the invoice for the sale of derivative securities traded on the stock exchange in Vietnam?
How to determine the unit price stated on the invoice for the sale of derivative securities traded on the stock exchange in Vietnam?
Pursuant to Article 9 of Circular No. 58/2021/TT-BTC stipulating this issue as follows:
Settlement rules for derivative transactions of investors
1. Settlement for derivative transactions of investors includes payment of position gain/loss and settlement upon contract exercise. To be specific:
a) Payment of position gain/loss:
- On trading days prior to the last trading day, value of payment of position gain/loss shall be daily determined by relying on open positions on the investor's trading account and the difference between the daily settlement price and that determined on the previous trading day; or the difference between the daily settlement price and the settlement price (in case of positions that have been opened within the trading day); or the difference between the settlement price and the daily settlement price determined on the previous trading day (in case of positions that are closed prior to their expiration); or the difference between the settlement price for closing a position and the settlement price for opening a position (in case of positions that are opened and closed within the same trading day);
- On the last trading day, value of payment of position gain/loss shall be determined by relying on open positions on the investor's trading account and the difference between the final settlement price and the daily settlement price determined on the previous trading day; or the difference between the final settlement price and the settlement price (in case of positions that have been opened within the trading day); or the difference between the settlement price and the daily settlement price determined on the previous trading day (in case of positions that are closed prior to their expiration); or the difference between the settlement price for closing a position and the settlement price for opening a position (in case of positions that are opened and closed within the same last trading day).
The daily settlement price and final settlement price are published on VSDCC’s website;
b) Settlement upon contract exercise:
- In case of cash settlement: the contract exercise is considered complete upon the completion of payment of position gain/loss on the last trading day.
- In case of delivery of the underlying asset: the contract exercise is considered complete when the selling investor delivers the underlying asset or other transferable assets as prescribed and the buying investor makes cash payment under terms and conditions of the contract and VSDCC’s regulations; or the investor completes the payment of compensation (if any) as prescribed in Point c Clause 4 Article 11 hereof.
2. Settlement shall be made on the investor’s cash margin account and/or securities margin account. VSDCC shall cooperate with clearing members to make settlement according to Clauses 3, 4 Article 11 hereof.
In which, the settlement price is the price of matching orders for futures contracts between investors through the trading system of the Hanoi Stock Exchange.
- The settlement price at the end of the day is the price determined at the end of the trading day to calculate the daily profit and loss of positions.
- The final settlement price is the price determined at the last trading day to determine the payment obligation upon contract performance.
The Hanoi Tax Department has guided similar issues in Official Dispatch No. 23831/CTHN-TTHT in 2023 as follows:
The unit price for the invoice for sale of derivative securities traded on the stock exchange is the settlement price which is the matching price for futures contract trading between investors through the trading system of the Hanoi Stock Exchange as guided in Clause 3, Article 2 of Circular No. 58/2021/TT-BTC.
Thus, the invoice for the sale of derivative securities traded on the stock exchange uses the unit price as the settlement price which is the matching price for futures contract transactions between investors through the trading system of the Hanoi Stock Exchange.
Can securities transaction records be deducted when determining taxable income?
Pursuant to Clauses 1 and 2, Article 6 of Circular No. 78/2014/TT-BTC as amended by Article 4 of Circular No. 96/2015/TT-BTC as follows:
Deductible and non-deductible expenses when calculating taxable income
1. Except for the non-deductible expenses prescribed in Clause 2 of this Article, every expense is deductible if all of these following conditions are satisfied:
a) The actual expense incurred is related to the enterprise’s business operation.
b) There are sufficient and valid invoices and proof for the expense under the regulations of the law.
c) There is proof of non-cash payment for each invoice for purchase of goods/ services of VND 20 million or over (including VAT).
The proof of non-cash payment must comply with regulations of law on VAT.
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2. The expenses below are not deductible when calculating taxable income:
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2.35. Expenditures on insurance business, lottery business, securities trading, and some special business activities shall comply with corresponding documents issued by the Ministry of Finance.
Thus, for documents recording securities transactions purchased after order matching, the unit shall follow the instructions in the above regulations, specifically:
Securities transaction records are deductible when determining taxable income if the following conditions are fully satisfied:
- Actual expenses incurred in connection with production and business activities of the enterprise.
- Expenses with sufficient legal invoices and documents as prescribed by law.
- Expenses if there is an invoice for buying goods and services each time with a value of VND 20 million or more (price includes VAT) when paying, there must be a non-cash payment voucher.
Non-cash payment vouchers comply with the provisions of legal documents on value added tax.
In case the expenses for securities trading activities do not comply with the separate guiding documents of the Ministry of Finance, they shall not be deducted when determining the taxable income for CIT.
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