Unlisted share sales may face 20% income tax: ministry

Unlisted share sales may face 20% income tax: ministry

In recent years, transactions in unlisted shares have sometimes been treated like securities transfers and taxed at the 0.1 per cent rate.

An investor observing the market's movements at a securities firm trading office in Hà Nội. — VNA/VNS Photo

The Ministry of Finance has proposed a new tax treatment that would subject gains from transfers of unlisted shares to a 20 per cent income tax on net profit, while preserving the current 0.1 per cent transfer tax applied to securities traded on stock exchanges, according to a draft decree guiding the amended Personal Income Tax Law.

Under the draft, the ministry seeks to clarify taxation methods for income from capital transfers and securities transfers by explicitly separating unlisted shares from exchange‑traded securities. 

Personal Income Tax Law 109/2025/QH15 classifies income from capital transfers into three groups: transfers of equity stakes in economic organisations, transfers of securities and other forms of capital transfers.

The draft adds income from transfers of shares of non-public companies and those not listed or not registered for trading into the category of income from capital transfers. 

For these transactions, tax would be levied at 20 per cent on taxable income, defined as the difference between the selling price and the purchase price after deducting related costs. 

For example, if an investor buys shares for VNĐ1 billion (US$38,000) and later sells them for VNĐ1.5 billion, the VNĐ500 million gain would be taxed at 20 per cent, resulting in a tax liability of VNĐ100 million.

If the purchase price and related costs cannot be determined, the draft proposes a fallback method: tax calculated at a flat rate of 2 per cent on the transfer price. The same calculation principles would apply to both resident and non‑resident individuals. 

The draft also explicitly includes shares of non‑public companies that are not listed or registered for trading among taxable objects, noting that such transactions are typically negotiated, infrequent and essentially resemble capital transfers. They would therefore be taxed in a similar manner under the draft.

The proposal clarifies a previously ambiguous area of practice. In recent years, transactions in unlisted shares have sometimes been treated like securities transfers and taxed at the 0.1 per cent rate. The current draft changes that interpretation by treating such deals as capital transfers subject to taxation on realised gains.

For trading listed securities, the draft retains the existing levy of 0.1 per cent on the transfer price per transaction, irrespective of whether the trade generates a profit or a loss. 

This scope includes shares and share purchase rights of public companies and of entities listed or registered for trading, as well as bonds, bills, fund certificates and other securities as defined. 

The Ministry of Finance justifies maintaining the 0.1 per cent rate by pointing to the higher transparency of on‑exchange transactions, where prices are clearly determined and trading occurs frequently.

The draft also addresses tax administration procedures. Individuals earning income from capital transfers would be responsible for declaring and paying the tax themselves. 

By contrast, for securities transactions, the income‑paying organisation (the party effecting the transfer) would be responsible for withholding, declaring and remitting the 0.1 per cent tax on the transfer price.  

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