Personal income tax on capital transfers from 1 July 2026.

1. The classification of a deal determines the capital transfer tax

Capital transfers are often high-value deals, yet the tax rate varies widely with how the deal is classified: 20% of the gain, 2% of the transfer price, or 0.1% of the transfer price. On a single deal, the difference can run to billions of dong.

The Law on Personal Income Tax No. 109/2025/QH15 and Decree No. 253/2026/ND-CP set the rates out more clearly, but they also raise a classification question that the seller must settle before signing. This article explains how tax is calculated for each type of income, the classification of shares in unlisted companies, and the related procedures.

2. The new Law replaces the old tax framework from 1 July 2026

The Law on Personal Income Tax 2007 and its guiding circulars ceased to apply on 1 July 2026. Transactions before that date remain under the old rules, so during the transition taxpayers must pin down exactly when the tax obligation arises.

3. Income from capital transfers falls into three groups

Income from capital transfers falls into three groups: transfers of capital in economic organisations; transfers of securities; and capital transfers in other forms.

Because the classification decides the tax rate, it is the first and most important step in assessing a deal's tax.

The third group covers selling an enterprise and transferring a right to contribute capital. One exception applies: income from selling a whole private enterprise together with real estate counts as income from a real estate transfer, not a capital transfer, and is taxed under a separate regime.

4. Resident individuals are taxed under one of three methods

4.1. Transfers of capital contributions are taxed at 20% of the gain

The tax is calculated using the following formula:

Assessable income = transfer price less purchase price less reasonable related expenses

Personal income tax = assessable income × 20%, calculated per transfer.

The three elements of the formula are:

• The transfer price is the amount received under the capital transfer contract.
• The purchase price is the accumulated value of the capital contribution at the time of transfer, as shown in the accounting books.
• Reasonable expenses include the cost of legal procedures, state fees and charges paid by the seller, and other expenses with valid supporting documents.

4.2. Without cost evidence, tax is 2% of the transfer price

Personal income tax = transfer price × 2%

This is a deemed-rate mechanism, used when the file does not show the cost of the capital. Taxpayers should understand it correctly: the 2% rate is not a favourable option but the penalty for missing documents.

This may be illustrated as follows: a capital contribution with a purchase price of VND 10 billion is transferred for VND 11 billion. If the transferor is able to evidence the cost of the capital, the tax payable is VND 1 billion multiplied by 20%, that is, VND 200 million. If the transferor is unable to do so, the tax payable is VND 11 billion multiplied by 2%, that is, VND 220 million. For a transaction with a low gain or at a loss, the difference is considerably greater: if the capital contribution is transferred for exactly its cost of VND 10 billion, the tax on the first basis is nil, whereas on the second basis it is VND 200 million.

4.3. Transfers of securities are taxed at 0.1% of the transfer price

Personal income tax = transfer price × 0.1%, per transfer, whether the deal makes a gain or a loss.

For derivative securities, Circular No. 87/2026/TT-BTC sets a separate formula for the transfer price, based on the settlement price, the contract multiplier, the number of contracts and the initial margin ratio.

5. There is no settled classification for shares in unlisted companies

This point needs the closest analysis, because the classification can move the tax rate from 0.1% to 20% or 2%, a several-fold difference in the tax payable.

5.1. Shares are securities but resemble capital contributions

Under securities law, shares in a joint stock company are securities. Applied strictly, every share transfer would be taxed at 0.1% of the transfer price, whether or not the company is listed or registered for trading.

On the other hand, shares in a non-public joint stock company behave economically more like a capital contribution than like traded securities: there is no market price, each deal is negotiated, and the transfer often hands over control of the enterprise. On this view, the deal is taxed at 20% of the gain or 2% of the price.

5.2. Current interpretations are not consistent

While the guiding instruments were being drafted, the option of taxing transfers of unlisted shares at 20% of the gain was put out for comment. Since the instruments were issued, commentators still do not fully agree on how far that option applies.

In practice, taxpayers should not assume the rate without checking. For a high-value deal, the gap between 0.1% and 20% can change the deal structure, so the point should be clarified during negotiations.

5.3. The transferor should verify the position before signing

Before signing a contract to transfer shares in an unlisted company, the seller should:

1. Confirm the classification with the managing tax authority, in writing if the deal is large.
2. Prepare a full cost-of-capital file whatever the classification. If the 20% rate applies, the file determines the tax; if the 0.1% rate applies, having the file does no harm.
3. Allocate the tax risk in the contract between seller and buyer, especially where the buyer or the company declares and pays on the seller's behalf.

6. Non-residents are now taxed at 20% or 2% on transfers of capital contributions

Non-resident individuals with income from capital transfers in Vietnam are taxed as follows:

• Transfers of capital other than securities: 20% on assessable income; where the purchase price and the expenses cannot be determined, 2% on the transfer price.
• Transfers of securities: 0.1% on the transfer price.

This is a significant change. Under the Law on Personal Income Tax 2007, a non-resident transferring capital paid 0.1% of the total proceeds. Under the current rules, transfers of capital contributions move to the 20% or 2% regime, which sharply increases the tax foreign investors pay when they exit a limited liability company in Vietnam.

As a general rule, resident individuals are taxed on income arising in and outside Vietnam; non-residents are taxed only on income arising in Vietnam.

7. When income arises determines the declaration obligations

7.1. Income is determined when the transaction completes

In principle, income arises when the transfer is completed in accordance with law. Decree No. 253/2026/ND-CP specifies this as the date the transaction completes or the date the list of members or shareholders changes.

For securities, Circular No. 87/2026/TT-BTC distinguishes three cases: listed securities, when the taxpayer receives the income; securities of an unlisted public company, when ownership transfers; other securities, when the transfer contract takes effect.

7.2. Who declares and when

In practice, this on-behalf mechanism means the enterprise cannot complete the change of members or shareholders until the seller's tax is dealt with. The buyer therefore has a direct interest in the seller paying the tax and should address this in the contract.

7.3. The declaration must evidence the cost base

A capital transfer tax return usually includes the personal income tax form, a copy of the transfer contract, accounting records showing the cost of the capital contribution, documents supporting reasonable expenses, and a copy of the seller's identity documents.

Circular No. 89/2026/TT-BTC sets the forms and deadlines. Because the forms changed when the Law took effect, use the current forms rather than saved copies.

8. The risk of tax being imposed on low value transactions

The tax authority may impose tax if the declaration is incomplete, inaccurate or untruthful, and may ask for further documents to verify the deal value under the Law on Tax Administration.

In practice, a transfer at cost, or below book value, in an enterprise with retained earnings or share premium is seen as high-risk. Declaring a price equal to par value when equity is several times the charter capital usually prompts a request for explanation.

The 20%/2% design points the same way. The 2% rate on the price is twenty times the 0.1% rate, which makes missing cost documents clearly costly and encourages enterprises to keep transparent cost-of-capital records.

9. Tax procedures are tied to investment and enterprise registration procedures

In a foreign-invested enterprise, a capital transfer raises more than tax issues. The usual sequence has five stages:

1. Registration of the capital contribution or the purchase of shares or capital contributions with the investment registration authority, if the transaction falls within one of the three cases subject to registration under the Law on Investment 2025: it increases the foreign ownership ratio in a business line with conditional market access; it causes the foreign ownership ratio to exceed 50%; or the target enterprise holds land use rights in an area sensitive from the standpoint of national defence and security. The processing time limit is 10 working days.
2. Sign the transfer contract and pay through the correct type of capital account.
3. Register the change of members or shareholders with the business registration authority and update the list of beneficial owners.
4. Declare and pay personal income tax on the transfer.
5. Amend the Investment Registration Certificate if the change requires it.

If the deal is not one of the three cases requiring registration, the parties skip the first stage and go straight to registering the change of members or shareholders.

As regards sequencing, enterprises need to note that tax procedures and business registration procedures are now more closely interconnected. A dossier for changing members or shareholders must be accompanied by the updated beneficial ownership content, and the business registration authority has a basis for requesting documents on the discharge of the tax obligation. Planning the steps in sequence rather than carrying them out in parallel helps to avoid a situation in which the dossier is returned at the final step.

10. What the transferor should do

1. Classify before you price. Whether the deal is a transfer of capital contributions or of securities decides the tax rate, so settle this before negotiating the price.
2. Build the cost-of-capital file from the day capital is contributed, not at the time of sale. Keep contribution records, accounting books and records of each capital increase, because without them the tax moves from 20% of the gain to 2% of the whole price.
3. For large stakes in unlisted companies, confirm the tax rate with the tax authority before signing, and allocate the tax risk in the contract.
4. Foreign investors exiting should recalculate their tax under the new rules, because the rate for non-residents transferring capital contributions has changed significantly.
5. Avoid declaring an unusually low price compared with book value; it triggers requests for explanation and imposed tax.
6. Plan the deal timetable around the procedures, allowing enough time for registration with the investment registration authority if required.