This topic’s title contains the single most common misconception about individuals’ capital transfer tax: the 0.1% rate on the sale price does not apply to capital transfers — it is the rate for securities transfers. A resident individual transferring a capital contribution or unlisted shares bears 20% on the transfer income under the Law on Personal Income Tax 109/2025/QH15, and only where purchase price and expenses cannot be determined does a fallback mechanism on the transfer price apply — at a fallback rate that is also not 0.1%. This article corrects the number, walks through the proper computation, and answers the loss-sale question every client asks.
1. The correction: 0.1% is the securities rate, not the capital transfer rate
Vietnam’s personal income tax system splits capital-related transfer income into groups with different computation mechanisms, and the confusion starts from all of them being called by one name. Securities transfers (listed/market-traded shares and certain specific assets as prescribed) by a resident individual bear tax at a rate on each transaction’s transfer price — the familiar 0.1% belongs to this group, computed on the entire sale price whether gain or loss. Capital transfers — capital contributions in LLCs, shares in unlisted joint stock companies, stakes in other economic organisations — bear an entirely different mechanism: a 20% rate on taxable income, the positive difference between the transfer price and the purchase price plus related reasonable expenses. The Law on Personal Income Tax 109/2025/QH15 (effective 01/7/2026, replacing Law 04/2007/QH12) preserves this architecture. The practical consequence of the distinction is large: a sale of unlisted shares for VND 10 billion with a VND 9 billion cost basis is taxed only on VND 1 billion of income (less reasonable expenses), while misapplying the 0.1% mechanism misstates both the base and the tax — and misapplying in the reverse direction on a securities transaction leads to back-assessment.
2. The correct mechanism: 20% on income, with a fallback where cost basis is indeterminable
Taxable income from a resident individual’s capital transfer = transfer price − purchase price (the cost basis of the portion sold, split pro rata for a partial sale) − actual reasonable expenses related to the transfer and to generating that income (advisory fees, valuation fees, legal costs of the deal, with documents). PIT payable = 20% × positive taxable income. The formula’s biggest practical problem is proving the purchase price: for stakes held for many years, through several capital increases and intermediate transfers, the seller must produce the chain of contribution/acquisition documents for the tax authority to accept the cost basis. Where the purchase price and reasonable expenses cannot be determined, Law 109/2025 applies the fallback: the individual pays tax at 2% on the transfer price — note this fallback rate is also not 0.1%, and being computed on the whole price it is usually far less favourable than 20% on income where cost basis is provable. The records lesson is unmistakable: keeping the capital document chain (investment/contribution certificates, capital contribution remittance evidence, prior transfer agreements, prior tax receipts) is keeping money — every provable dong of cost basis is 20 cents of tax removed from the base.
3. Selling at a loss: is tax due? The answer depends exactly on this mechanism
Under the 20%-on-income mechanism, a loss sale generates no taxable income, so no PIT is due on the capital transfer — a fundamental difference from securities transfers at 0.1% on the price (where a loss sale is still taxed). For the “no tax” conclusion to hold, the loss must be a real loss and provable: a transfer agreement recording a price below a documented cost basis, and a price not unreasonably below the stake’s market value at the sale date. The tax authority may redetermine the transfer price at market value where the contract price is abnormally low in cases where tax administration law permits assessment — especially transfers between related parties or transactions showing signs of value shifting to the buyer. A loss seller must therefore still declare the transaction in full even with zero tax: the declaration duty exists independently of the payment duty, and the loss-sale filing (agreement, cost basis documents, valuation materials/explaining the low price such as the company’s loss-making financial statements) is the shield when the authority reconciles later. An undeclared loss sale leaves the seller exposed to price assessment and late-declaration penalties when discovered.
4. Who declares, who pays, and by when
PIT on a resident individual’s capital transfer is declared per occurrence. Responsibility divides by the parties’ positions: if the buyer is an organisation/enterprise in Vietnam (or other prescribed cases), the buyer/related organisation withholds, declares and remits the tax for the individual at payment/transaction completion; if both sides are individuals or the transaction does not pass through a Vietnamese organisation, the transferring individual self-declares and pays within 10 days from the transfer agreement’s effective date (under the per-occurrence declaration regime of current tax administration under the Law on Tax Administration 108/2025/QH15 and guiding regulations). The declared/paid tax evidence is a mandatory document in completing the transaction: the company needs it to safely record the member/shareholder change, the bank needs it where the transfer cash flow involves a foreign investor through an ICA, and the buyer needs it to establish their purchase price as cost basis for the next transfer. The whole article in short: forget the 0.1% figure when speaking of capital transfers — a resident individual bears 20% on the real gain, a loss sale owes no tax but must still be declared, and the quality of the cost-basis file decides the actual tax more than any computation technique.
I am a Vietnamese resident individual selling shares — how is my income tax computed?
Under the Law on Personal Income Tax 109/2025/QH15: a capital transfer (capital contributions, unlisted shares) bears 20% on taxable income = transfer price − purchase price of the portion sold − reasonable expenses related to the transfer. Where the purchase price and expenses cannot be determined, the fallback of 2% on the transfer price applies. The tax is declared per occurrence.
Is the 0.1% rate computed on the sale price or on the gain?
The 0.1% figure does not belong to capital transfers: it is the PIT rate on each transaction’s transfer price for securities transfers. For capital transfers the base is the income (the gain) at 20%, not the sale price; only where purchase price and expenses cannot be determined is 2% computed on the entire transfer price under the fallback in the Law on Personal Income Tax 109/2025/QH15. Applying 0.1% to a capital transfer applies the wrong object and the wrong tax amount.
Selling at a loss — do I still pay 0.1% on the sale price?
No, for capital transfers. Because tax is 20% on income, a loss sale generates no taxable income, so no PIT is due on the capital transfer (unlike securities, where 0.1% on the price means a loss sale is still taxed). But the seller must still declare the transaction in full with cost basis documents and a price explanation, because the tax authority may redetermine the price at market value if the contract price is unreasonably low.
Who declares and pays the tax, and what is the deadline?
The tax is declared per occurrence. If the buyer is an organisation/enterprise in Vietnam, the buyer withholds, declares and remits for the individual at payment. If the transaction does not pass through a withholding organisation, the transferring individual self-declares and pays within 10 days from the transfer agreement’s effective date under the per-occurrence declaration regime (Law on Tax Administration 108/2025/QH15 and guiding regulations).