On October 1, 2025, as reported by Binance, the exchange submitted a formal request to the Ministry of Finance of Vietnam for a review of the new tax on crypto transactions, emphasizing that a tax calculated on the gross value of operations can pose an immediate risk to the liquidity and stability of the local market.
International analysis and guidelines on the taxation of digital assets provide useful frameworks for assessing these impacts OECD.
Market analysts and some market-making operators contacted for this article report observable effects on spreads and order book depth when taxes based on gross value are introduced.
From an operational standpoint, a 0.1% tax is ten times higher than the typical margin of 0.01% per single trade, which makes many market-making strategies economically unsustainable if applied without compensation mechanisms.
Binance: a value tax can expel market makers
The exchange contests a tax applied on the gross value of trades. In the current model, for market making – where the margin per single trade is around 0.01% – a tax of 0.1% on the countervalue would end up exceeding the actual profit of the operation, making the activity uneconomical and potentially driving market makers out of the market. That said, the tax architecture directly impacts the sustainability of these strategies.
In this regard, Binance reports that international experiences indicate how similar taxations can significantly depress trading activity: for example, in Indonesia, tax revenues related to crypto would have dropped by about 63% after the introduction of a similar measure (data to be verified Binance).
The policy proposal: taxing net profits
Alternatively, Binance proposes to tax the net profits – defined as the difference between the selling price and the purchase price, net of fees – instead of the gross volume of transactions. With this methodology, a 20% rate would be applied to the net profits.
For cases where the net profit cannot be precisely determined, Binance suggests a fallback mechanism: applying a 0.1% tax on the selling price (as confirmed by Binance).
Market Effects: Wider Spreads and Rising Costs
If market makers reduced their operations due to excessive imposition, the depth of the book would thin out, with wider spreads between bid and ask and increased volatility.
For retail investors, this would mean higher execution costs, more frequent slippage, and less reliable prices, especially during stressed market phases. In this context, trading would become more burdensome.
- Typical margin per trade: approximately 0.01%.
- Disputed tax: 0.1% on the transaction value.
- Proposed alternative: 20% on net profit, with a fallback of 0.1% applied to the selling price.
International Comparison: How Other Countries Tax
Observing the experience of other countries reveals different approaches that offer points for reflection. In Indonesia, for example, a regime with a 0.1% tax on the taxable amount and a 0.1% VAT on transactions was introduced; measures that, according to some estimates, would have led to a 63% decrease in crypto tax revenue (data to be verified Binance).
In Singapore, however, capital gains from holding cryptocurrencies are not taxed, while professional activities are treated as income, favoring the attraction of capital and qualified operators.
In Thailand, finally, after various revisions, the profit rate – initially around 15% – was modified and the 7% VAT was removed for authorized exchanges, a choice aimed at supporting domestic liquidity. The outcomes are not uniform, but the comparison remains useful.
| Indonesia | Approximately 0.1% income tax + 0.1% VAT on transactions | Crypto tax revenue down 63% after introduction (data to be verified) |
| Singapore | No taxation on capital gains for holding; professional activities are taxed as income | Approach focused on attracting capital and qualified operators |
| Thailand | Profit rate (initially ~15%); 7% VAT removed for authorized exchanges | Revisiting tax structure to support domestic liquidity |
| Vietnam | Transaction value tax under study; alternative proposal: 20% on net profits with fallback of 0.1% | Balancing between immediate revenue and ecosystem development |
Vietnam: what to monitor to assess the impact
To accurately assess the effects of a tax reform, it is essential to monitor some key indicators: the average daily volumes on authorized exchanges (for spot and derivatives operations), the number of active market makers and their market share, the variation of spreads on major cryptocurrency pairs (e.g., BTC/VND, USDT/VND) in different liquidity phases, and finally, the impact of tax pressure on the operating profit of various strategies.
Currently, such data is not available systematically; it would be useful to have a collection of official series or independent audits. That said, a shared informational framework is needed.
Local Reactions and Next Institutional Steps
According to some sources, local institutional investors – including the well-known fund Dragon Capital (to be verified) – and academics, such as those from RMIT University, view favorably a tax on profits in the early stages of the market, considered functional to attract liquidity.
For its part, the Vietnamese Ministry of Finance has not yet released a public response to the request of October 1, 2025; a technical discussion should clarify the impacts on revenue and market stability. Indeed, the discussion remains open.
Collateral Risks: Liquidity Migration Abroad
A tax based on the gross value of operations could drive operators to migrate towards foreign structures or over-the-counter (OTC) markets, resulting in liquidity fragmentation and reduced risk controls.
Conversely, a tax on profits, if well-defined and applicable, can help preserve the depth and competitiveness of the domestic market, maintaining onshore supervision. It should be noted that the choice of the tax perimeter influences the trajectory of flows.
Quick FAQ
What is the tax rate proposed by Binance?
Binance proposes a 20% rate on net profits, which is the difference between the selling price and the purchase price, net of costs and fees.
What happens if the net profit is not determinable?
In such a case, a fallback mechanism comes into play, which involves applying a 0.1% tax on the sale price of the transaction.
Who would be more exposed to a transaction value tax?
The measure particularly impacts low-margin and high-frequency strategies, typical of market makers, because the levy on the gross value can easily exceed the actual profit.
Conclusion
The request made by Binance on October 1, 2025, reignites the debate on how to tax the crypto sector: whether to apply a tax on the value of transactions or limit it to net profits.
The decision will impact liquidity, costs for investors, and Vietnam’s ability to attract qualified operators. Only an assessment based on transparent data and international comparisons can help find a balance between tax revenue and market health.
