Vietnam Proposes 20% Capital Gains Tax on Stock Profits

Vietnam’s Ministry of Finance has just released a draft amendment to the Personal Income Tax Law, with one headline-grabbing proposal: a 20% tax on net gains from securities trading for individual residents. If approved, this would mark the most significant change in how Vietnam taxes capital market income in over a decade.

What’s New in the Draft Tax Law?

According to the proposal, individual residents earning income from stock sales would pay 20% on their actual profits—calculated as the selling price minus the purchase price and any reasonable related expenses.

If the purchase cost or expenses cannot be verified, a 0.1% tax on the transaction value will be applied—similar to the current method.

For capital transfers outside of securities (e.g. private business shares or equity), the proposed tax is 20% on the profit, or 2% of the transaction value if costs cannot be substantiated.

From the Old Rules to the Push for Reform

Under the current law—enacted in 2009—investors pay a provisional 0.1% tax on each transaction, with the option to reconcile at year-end based on actual net gains.

But since 2013, Law No. 71/2014 unified the system, requiring all securities transactions to be taxed at a flat 0.1% on transaction value, regardless of whether the investor made a profit or a loss. This approach has sparked criticism, as investors effectively pay tax even when they incur losses.

For years, experts and investors have called for a more balanced system that taxes only realized profits—a system that supports fairness and transparency while encouraging market growth.

Learning from Global Practices

The Ministry of Finance notes that the new proposal is shaped by international tax practices and Vietnam’s own administrative experience. Most countries tax capital gains from securities in one form or another—though their methods vary:

  • Japan levies a 20.3% tax on profits from stocks, bonds, and warrants.

  • China applies a 20% tax on gains from unlisted securities.

  • Thailand treats capital gains as part of personal income and taxes them accordingly.

  • The Philippines imposes a 0.6% tax on total transaction value.

  • Indonesia charges 0.1% on revenue from listed stock trades.

If passed, Vietnam’s proposal would bring its capital gains taxation closer to international standards—where tax is only paid when there is profit.

What It Means for Investors and the Market

Switching from a flat tax on transaction value to a tax on actual profits could bring more clarity and fairness to the market. It’s expected to benefit both individual and institutional investors by aligning taxation with actual financial outcomes.

However, this also places greater responsibility on investors to track and document purchase prices, costs, and receipts accurately. On the other side, tax authorities will need robust systems to handle and verify a high volume of transactions efficiently and transparently.

Still Open for Feedback

The draft is currently open for public consultation before it’s officially submitted to the National Assembly. This is a crucial window for market participants, legal experts, and financial institutions to voice their input and help shape a fair and growth-oriented tax framew

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