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Vietnam's capital gains tax system for foreigners follows a straightforward flat-rate structure based on gross sales proceeds rather than net profits.
As of September 2025, foreign property investors face a 2% tax on total sales value for real estate transactions, while securities sales are taxed at just 0.1% of gross proceeds. The Vietnamese tax authorities have simplified the calculation by eliminating most deductible costs, making the process more predictable but potentially more expensive for investors who have invested heavily in property improvements.
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Vietnam applies flat-rate capital gains taxes to foreigners: 2% on real estate sales proceeds and 0.1% on listed securities transactions.
The tax calculation is based on gross sales value without deducting purchase costs, renovation expenses, or transaction fees.
| Asset Type | Tax Rate | Tax Base | Payment Timing |
|---|---|---|---|
| Real Estate | 2% | Total sales proceeds | At title registration |
| Listed Securities | 0.1% | Total sales proceeds | At transfer registration |
| Non-listed Shares | 2% | Total sales proceeds | At transfer registration |
| Corporate Capital Transfers | 2% | Total sales proceeds | At legal transfer |
| Primary Residence (exemption) | 0% | N/A | N/A |
What is the standard capital gains tax rate for foreigners selling property in Vietnam?
Vietnam applies a flat capital gains tax rate of 2% on the total sales proceeds for foreign investors selling real estate properties.
This 2% rate applies to both residential and commercial properties sold by non-Vietnamese individuals and entities. The tax is calculated on the gross sales value as stated in the purchase contract or official government valuation, whichever is higher.
For listed securities transactions, foreigners pay a significantly lower rate of 0.1% on the total selling price. This favorable rate applies to shares traded on Vietnamese stock exchanges like the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX).
The current tax structure represents a major shift from previous regulations that allowed various deductions and calculated taxes based on net gains rather than gross proceeds.
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How is the taxable amount calculated for foreign property sellers in Vietnam?
The taxable amount is calculated based on the total sales proceeds without any deductions for costs or expenses.
Vietnamese tax authorities use the higher value between the actual sales price stated in the contract and the official government valuation of the property. This prevents underreporting of sales values to minimize tax obligations.
Unlike many other countries that allow deductions for acquisition costs, improvement expenses, and transaction fees, Vietnam's current system does not permit such deductions for foreign sellers. This means if you bought a Ho Chi Minh City apartment for $200,000 and sell it for $300,000, you pay 2% tax on the full $300,000 rather than on the $100,000 gain.
The elimination of deductible costs has simplified the calculation process but can result in higher effective tax rates, especially for properties that have undergone significant renovations or improvements.
What specific costs can foreigners deduct when calculating capital gains tax in Vietnam?
As of September 2025, Vietnamese tax law does not allow foreign sellers to deduct any costs when calculating capital gains tax on real estate transactions.
Previously, foreign investors could deduct various expenses including the original purchase price, transfer fees, notarization costs, legal expenses, and renovation costs. However, recent amendments to the tax law have eliminated these deductions for foreign sellers.
This change means that costs such as broker commissions, legal fees, property improvement expenses, mortgage interest, and maintenance costs cannot reduce your taxable base. The 2% tax applies to the full gross sales proceeds regardless of your actual profit margin.
The only exception involves certain treaty benefits under Double Tax Agreements (DTAs) that Vietnam has signed with specific countries, which may provide limited relief in certain circumstances.
Do calculation methods differ between real estate and other asset types in Vietnam?
Yes, Vietnam applies different tax rates and calculation methods depending on the type of asset being sold by foreign investors.
| Asset Type | Tax Rate for Foreigners | Calculation Method |
|---|---|---|
| Residential Real Estate | 2% of sales proceeds | Gross sales value, no deductions |
| Commercial Real Estate | 2% of sales proceeds | Gross sales value, no deductions |
| Listed Company Shares | 0.1% of sales proceeds | Total transaction value |
| Non-listed Company Shares | 2% of sales proceeds | Gross transfer value |
| LLC Capital Contributions | 2% of sales proceeds | Gross transfer value |
| Bond Sales | 0.1% of sales proceeds | Total transaction value |
| Derivatives Trading | 0.1% of sales proceeds | Total transaction value |
Are there different rules for resident versus non-resident foreigners in Vietnam?
Vietnam applies the same capital gains tax rates to both resident and non-resident foreigners for most property and securities transactions.
Both resident and non-resident foreign individuals pay 2% on real estate sales proceeds and 0.1% on listed securities transactions. The tax residency status does not affect the basic tax rates or calculation methods for capital gains.
However, resident foreigners who maintain a permanent establishment in Vietnam may be subject to additional corporate income tax obligations if they conduct business activities. Non-resident foreigners typically have simpler compliance requirements since they only deal with the capital gains tax on specific transactions.
The distinction becomes more important for corporate entities, where non-resident foreign companies face the flat 2% rate on capital transfers, while resident entities may be subject to Vietnam's standard corporate income tax rates of 20% on their overall business profits.
How are foreign currency transactions handled for capital gains tax purposes?
When property purchases and sales involve foreign currency, Vietnamese tax authorities use the State Bank of Vietnam's official exchange rate to calculate tax obligations.
The exchange rate applied is typically the rate published by the State Bank of Vietnam on the date of the transaction or tax declaration. This standardized approach prevents disputes over which exchange rate should be used for tax calculations.
For example, if you bought a Da Nang condominium with USD and later sell it for EUR, both transactions will be converted to Vietnamese dong using the official exchange rates on the respective transaction dates. The 2% capital gains tax is then calculated on the VND equivalent of the sales proceeds.
Foreign investors should maintain detailed records of exchange rates and transaction dates, as the tax authorities may require documentation to verify the correct conversion amounts during audits or compliance reviews.
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When must foreigners pay capital gains tax during the sale process in Vietnam?
Capital gains tax must be paid at the time of title transfer registration with Vietnamese authorities, not when the sales contract is signed.
For real estate transactions, payment occurs during the property title transfer process at the Department of Natural Resources and Environment or relevant provincial authorities. The tax payment is a prerequisite for completing the legal transfer of ownership.
The timeline typically works as follows: contract signing → tax calculation and payment → title transfer registration → completion of sale. Vietnamese authorities will not process the ownership transfer until they receive confirmation of capital gains tax payment.
For securities transactions, the tax is paid when the share transfer is legally registered and acknowledged by the relevant authorities or securities depositories. This ensures that all tax obligations are settled before the transaction becomes legally binding.
Who is responsible for collecting and paying the capital gains tax in Vietnam?
The foreign seller is primarily responsible for calculating, declaring, and paying the capital gains tax to Vietnamese authorities.
In most real estate transactions, the seller must directly remit the tax payment to the tax authorities and provide proof of payment during the title registration process. However, in some cases, notaries, lawyers, or real estate agents may facilitate the tax collection to ensure smooth transaction completion.
Buyers are not typically responsible for the seller's tax obligations, but they may assist in the process by ensuring that tax payments are completed before finalizing the purchase. Some buyers prefer to withhold the tax amount from the purchase price and pay it directly to authorities to guarantee compliance.
Tax agents and legal representatives can handle the payment process on behalf of foreign sellers, but the ultimate legal responsibility remains with the seller to ensure accurate calculation and timely payment.
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What documents must foreigners prepare for capital gains tax compliance in Vietnam?
Foreign sellers must prepare a comprehensive set of documents to comply with Vietnamese capital gains tax requirements.
Essential documents include:
- Original sales contract with official signatures and notarization
- Property title certificate or ownership documentation
- Foreign investor's passport and valid Vietnamese visa or residence permit
- Tax declaration forms (specific formats prescribed by Vietnamese tax authorities)
- Proof of capital gains tax payment receipt
- Bank transfer records showing the transaction amounts
- Exchange rate documentation if foreign currency was involved
- Power of attorney documents if using a legal representative
Additional documentation may be required for complex transactions involving corporate entities, multiple properties, or cross-border financing arrangements. Vietnamese authorities are strict about document authenticity and may require certified translations for foreign-language documents.
The tax declaration must be submitted within prescribed timelines, typically before or concurrent with the title transfer registration process.
What penalties apply for late or incorrect capital gains tax payments in Vietnam?
Vietnamese tax authorities impose significant penalties and interest charges for late or incorrect capital gains tax payments by foreign investors.
Late payment penalties include fines ranging from 10% to 20% of the unpaid tax amount, depending on the duration of the delay. Daily interest charges accrue at rates determined by the State Bank of Vietnam until the full tax obligation is settled.
Incorrect calculations or underreporting of sales values can result in additional penalties of 20% to 40% of the shortfall amount. In severe cases involving tax evasion or fraud, penalties can reach up to 300% of the unpaid tax plus potential criminal charges.
Administrative violations such as failing to register for tax obligations or not maintaining proper documentation can result in fines of 500,000 to 5,000,000 VND for individuals and higher amounts for corporate entities.
Vietnamese authorities actively monitor property transactions and cross-reference sales data with registration records to identify compliance violations.
Are there tax exemptions or treaty benefits available to foreign property investors in Vietnam?
Vietnam provides limited tax exemptions and treaty benefits that can reduce or eliminate capital gains tax obligations for qualifying foreign investors.
Key exemptions include:
- Primary residence exemption for foreigners who have lived in the property as their main home
- Long-term ownership exemption for assets held longer than five years in certain cases
- Properties acquired before January 1, 2009, may qualify for reduced rates
- Certain inherited properties may receive preferential treatment
- Diplomatic immunity for qualifying diplomatic personnel and international organization staff
Vietnam has signed Double Tax Agreements (DTAs) with over 80 countries, including Singapore, Japan, South Korea, and most EU nations. These treaties may provide capital gains tax exemptions or reduced rates for residents of treaty countries.
Treaty benefits are not automatically applied and must be specifically claimed during the tax declaration process with proper documentation proving eligibility. Foreign investors should consult tax advisors familiar with Vietnam's DTA network to determine available benefits.
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How long does it take to receive tax settlement confirmation from Vietnamese authorities?
Vietnamese tax authorities typically issue capital gains tax settlement confirmation within 2-4 weeks after receiving complete documentation and payment verification.
The timeline can extend to 6-8 weeks if additional review is required, particularly for high-value transactions, complex corporate structures, or cases involving treaty benefit claims. Incomplete documentation or calculation errors can cause significant delays in the confirmation process.
Expedited processing may be available for urgent transactions, but this requires special applications and may involve additional fees. Some provincial tax offices process confirmations faster than others, with Ho Chi Minh City and Hanoi typically having more efficient systems than smaller provinces.
The tax settlement confirmation is essential for completing the property title transfer, so foreign investors should factor these timelines into their transaction schedules. Working with experienced local tax advisors can help expedite the process and avoid common delays.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Vietnam's capital gains tax system for foreigners prioritizes simplicity over deduction flexibility, making it crucial for investors to factor the 2% flat rate into their investment calculations.
Understanding the payment timeline and documentation requirements can prevent costly delays and penalties during property transactions in Vietnam's growing real estate market.
Sources
- PwC Vietnam - New Capital Gains Tax Rules Update
- The Shiv - Capital Gains Tax in Vietnam
- Allen & Gledhill - Vietnam Corporate Income Tax Law
- Russin & Vecchi - Capital Gains for Singapore Investors
- GovMedia - Vietnam's Amended Corporate Income Tax Law
- KPMG - Vietnam Capital Gains Tax Changes
- Heavnn University - Capital Gains Tax in Vietnam
- Baker McKenzie - Vietnam New Corporate Income Tax Law