Scenario: a Singapore fund sells its entire 60% stake in a Vietnamese manufacturer to a Japanese group — the contract is signed in Singapore, money moves from Tokyo to Singapore, not a dollar “touches” Vietnam. Is Vietnamese tax due? Who files?
1. Offshore deals are still taxable in Vietnam
The common investor mistake: where the contract is signed and money moves doesn’t decide taxability. Capital-transfer income is Vietnam-sourced — the underlying assets (company, factory) sit in Vietnam — so Vietnam may tax it even with both parties abroad. “Offshore” doesn’t mean “beyond Vietnamese tax.”
2. Rate and computation: 20% on the gain
Foreign organizations transferring capital in Vietnamese enterprises face 20% CIT on transfer income:
- Taxable income = transfer price − cost of transferred capital − transfer expenses.
- Example: the Singapore fund bought 60% for USD 5 million, sells for USD 8 million, expenses USD 100,000 → income = 8 − 5 − 0.1 = USD 2.9 million → CIT = 2.9 × 20% = USD 580,000.
- Cost must be evidenced (original capital-contribution/share-purchase contracts, payment proof).
3. Who files, where, and when
With the transferor having no Vietnamese presence, filing is done on behalf in Vietnam:
- Filer: the transferee (the Japanese group) or the Vietnamese company itself — in practice usually the Vietnamese company with its local accounting.
- File the capital-transfer CIT return with the tax office managing the Vietnamese company (check the operative return form).
- Deadline: declare and pay within the prescribed period from the transfer contract’s effective date (check the operative deadline) — don’t wait for year-end finalization.
- Parallel investment procedure: foreign shareholder/member changes require investment-certificate amendment — investment and tax authorities cross-check.
Frequently asked questions
1. Both parties abroad — Vietnamese tax due?
Yes — the income is Vietnam-sourced (underlying assets in Vietnam); taxability doesn’t depend on signing or payment location.
2. What’s the rate?
20% CIT on income = transfer price − capital cost − transfer expenses.
3. Who files on behalf in Vietnam?
The transferee or the Vietnamese company itself — usually the latter in practice.
4. When to file?
Within the prescribed period from the contract’s effective date (check the operative deadline) — not at year-end finalization.
5. Must the investment certificate be amended?
Yes — foreign investor changes require registration; investment and tax authorities cross-check information.
This article has been quality-reviewed by the FLAW AI Legal Council
