Capital Transfer Tax in Vietnam applies whenever shares or capital contributions change hands, whether the transferor is a resident company, an individual, or an offshore holding entity.
This briefing reflects Vietnamese tax law as of August 2026. Because the legal framework for capital transfer tax underwent a comprehensive overhaul from late 2025, businesses should reconfirm current requirements with tax counsel at the time of their transaction before relying on this summary.
Tax on capital/share transfers is one of the factors that directly affects deal structure and pricing in Vietnamese M&A. Since 15 December 2025, the legal framework in this area changed fundamentally under CIT Law No. 67/2025/QH15 and Decree 320/2025/NĐ-CP.
CIT for foreign corporate sellers: a 2% deemed-rate mechanism
The previous 20% CIT mechanism on net gain (transfer price minus cost basis) has been replaced by a deemed 2% CIT on gross transfer proceeds for transfers of capital contributions in LLCs or shares in non-public joint-stock companies by foreign corporate sellers — applying to both direct and indirect transfers. For securities of public companies, the deemed rate is 0.1% of gross transfer proceeds. There is an exemption for intra-group restructurings that do not change the ultimate beneficial owner, but the specific conditions for this exemption (defining beneficial ownership, book-value basis) are still being clarified through implementing guidance — this should be applied with caution.
PIT for individual sellers
Under the new PIT Law (most provisions effective from 1 July 2026), a uniform 20% rate applies to capital transfer gains where cost basis is identifiable, or 2% of gross proceeds where cost/expenses cannot be determined, applying to both resident and non-resident individuals. Transfers of listed/public securities carry a flat 0.1% rate on the transfer price per transaction.
Indirect offshore transfer tax risk
This is the most significant change: since 15 December 2025, Vietnamese tax law explicitly states that taxable income includes capital transfer gains “whether direct or indirect” — providing a unified statutory basis for taxing the offshore transfer of holding-company shares where the underlying value derives from a Vietnamese subsidiary. This resolves what was previously a legal grey area (unlike China’s more explicit Circular 7 mechanism). However, the consistency of enforcement in practice against sellers with no presence in Vietnam — including collection mechanics and interaction with double-tax treaties — is not yet well documented through public practice, so investors should prepare thorough documentation and may need to seek advance guidance from tax authorities before executing a transaction involving an indirect transfer element.
Related-party transfer pricing: from Decree 132/2020 to Decree 255/2026
Decree 132/2020/NĐ-CP (as amended by Decree 20/2025/NĐ-CP) has been replaced from 1 July 2026 by consolidated Decree 255/2026/NĐ-CP, applicable from the 2026 CIT period onward. The specific substantive changes relevant to related-party capital transfer valuation still need to be confirmed in detail at the time of transaction, given how recently this decree was issued.
Counsel’s view: Given the comprehensive overhaul of capital transfer tax law between late 2025 and mid-2026, investors should confirm the specific effective date applicable to their transaction (before or after 15 December 2025 for CIT; before or after 1 July 2026 for PIT) before calculating tax liability, rather than relying on prior transaction experience without reconfirmation.
Frequently asked questions
What is the current CIT rate for a foreign seller transferring capital in an LLC?
A deemed 2% on gross transfer proceeds, effective from 15 December 2025, replacing the previous 20%-on-net-gain mechanism.
Does Vietnam tax indirect offshore transfers?
Yes, since 15 December 2025 the law provides a clear statutory basis, but enforcement mechanics in practice are still developing.
What PIT rate applies to individuals transferring capital?
20% on gain if cost basis is identifiable, or 2% of gross proceeds if not, effective from 1 July 2026.
IVLF Advisors’ M&A advisory team helps investors assess tax liability and structure capital transfer transactions in line with current regulations. Speak with our team about the tax implications of your deal for tailored advice.
Capital Transfer Tax: Practical Takeaway
Getting Capital Transfer Tax filings right in Vietnam means correctly identifying whether CIT or PIT applies, and assessing indirect offshore transfer risk whenever the target holds Vietnamese assets through a foreign holding structure. For related structuring guidance, see IVLF Advisors’ M&A and tax advisory services. Taxpayers should also review guidance from the General Department of Taxation of Vietnam on capital transfer filing deadlines and documentation requirements. Early planning around Capital Transfer Tax reduces the risk of penalties and double taxation.
Capital Gains Tax Foreign Investor Vietnam: Filing and Indirect Transfer Exposure
Structuring an exit requires early attention to capital gains tax foreign investor Vietnam exposure, since the tax authority applies a distinct regime for indirect transfer tax Vietnam when shares in an offshore holding company are sold instead of the local operating entity. Sellers negotiating an M&A tax Vietnam foreign seller position should model both direct and indirect transfer scenarios before signing, because the applicable rate and filing party can differ significantly.
Missing the capital transfer tax filing deadline Vietnam imposes penalties and interest, so buyers frequently require sellers to escrow a portion of proceeds until the tax clearance certificate is issued.
Planning a share transfer or exit from a Vietnamese company? Contact IVLF Advisors to structure the transaction and manage your capital transfer tax obligations.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
