Vietnam Indirect Share Transfer Tax: 2% Deemed CIT, 20% PIT Proposal, M&A Compliance Guide

Vietnam’s overhaul of capital-transfer taxation entered force on 15 December 2025 and has fundamentally altered how deal teams must price, structure and document share sales involving Vietnamese assets. Under the Law on Corporate Income Tax 2025 (Law No. 67/2025/QH15) and its principal implementing regulation, Decree 320/2025/NĐ-CP, a deemed 2% CIT levied on gross sale proceeds now applies to a wide range of direct and indirect share and capital transfers, replacing the previous regime that taxed net gains at 20%. Separately, a proposed 20% Personal Income Tax on profits from unlisted-share disposals continues to move through the legislative process, creating a parallel compliance risk for individual sellers.

This guide provides M&A counsel, in-house tax teams and private-equity professionals with a step-by-step compliance playbook for the Vietnam indirect share transfer tax, covering trigger tests, calculation mechanics, JSC-versus-LLC structuring, filing obligations and practical SPA drafting language.

Executive Summary for Deal Teams

Bottom line: every cross-border exit involving Vietnamese equity, whether the target is held directly or through an offshore holding company, must now be stress-tested against the 2% deemed CIT on gross proceeds under Decree 320/2025/NĐ-CP.

• Who pays. The seller (or the entity with Vietnam-source income from the capital transfer) is the taxpayer. Where the seller is a non-resident with no local presence, the Vietnamese enterprise whose capital is transferred may be designated as the withholding agent.
• How much. The headline rate is 2% of the gross transfer price attributable to the Vietnamese interest. This replaces the former 20%-on-net-gain regime for corporate taxpayers and applies regardless of whether the seller realises a profit or a loss.
• Immediate actions. Deal teams should (i) re-model all indicative pricing to reflect the gross-based levy, (ii) insert tax-indemnity and gross-up language into SPAs executed after 15 December 2025, (iii) confirm whether the target entity is a joint stock company (JSC) or a limited liability company (LLC), the distinction drives the applicable tax mechanism, and (iv) verify filing deadlines with the local tax authority managing the target company’s registration.

The sections below unpack each of these obligations in detail, with worked examples, comparison tables and model SPA clauses that practitioners can adapt to live transactions.

What Changed in 2025–2026? Key Legal Instruments and Effective Dates

Bottom line: two instruments, a new law and its implementing decree, have restructured Vietnam share transfer tax for 2026 and beyond.

Law No. 67/2025/QH15 (the Law on Corporate Income Tax 2025) was adopted by the National Assembly and provides the statutory basis for taxing income from capital and share transfers, including transfers executed offshore that derive value from Vietnamese assets. Its implementing regulation, Decree 320/2025/NĐ-CP, was published in the Official Gazette (Công Báo) and took effect on 15 December 2025. Decree 320 details the deemed-rate methodology: rather than requiring the taxpayer to prove a net gain and apply a 20% rate, the regime now imposes a flat 2% on gross transfer proceeds.

The shift matters for three reasons. First, it eliminates disputes over cost-basis and valuation, the tax authority simply takes the contract price. Second, sellers that dispose at a loss still owe tax. Third, the calculation basis for indirect transfers requires an allocation of the overall deal value to the Vietnamese interest, introducing new transfer-pricing-style documentation requirements.

In parallel, the National Assembly continues to deliberate proposed amendments to the Personal Income Tax Law that would formalise a 20% PIT on gains from transfers of unlisted securities by individual taxpayers. As of mid-2026, these PIT amendments remain at the proposal stage; industry observers expect legislative action later in 2026 or early 2027.

Timeline of Key Dates

When Does a Vietnam Indirect Share Transfer Trigger Tax?

Bottom line: tax is triggered whenever a transfer of an offshore shareholding derives value from an underlying Vietnamese enterprise, regardless of where the transaction closes.

Decree 320/2025/NĐ-CP treats an indirect transfer as the disposal of equity in a non-Vietnamese entity whose value is attributable, in whole or in part, to one or more Vietnamese companies, assets or operations. The practical test asks whether the offshore entity being sold holds, directly or through one or more intermediary layers, capital, shares or contributed capital in a Vietnamese enterprise.

Deal teams should apply a three-step trigger checklist:

1. Ownership nexus. Does the offshore entity (or any entity in the chain between the offshore seller and the Vietnamese enterprise) hold equity in a Vietnam-incorporated company?
2. Value attribution. Is any portion of the transfer consideration attributable to the value of the Vietnamese enterprise? If the target offshore holding company’s assets consist predominantly of its Vietnamese subsidiary, the entire sale price may be subject to allocation.
3. Exemption screening. Does the transfer qualify for a carve-out, for example, an intra-group reorganisation where the ultimate beneficial ownership does not change, or a transfer specifically excluded by Decree 320? Exemptions are narrowly drafted and require documentary proof.

If the answer to steps 1 and 2 is “yes” and no exemption applies under step 3, the Vietnam indirect share transfer tax is triggered.

Worked Scenarios

Scenario A, single-layer hold-co exit. A Singapore parent company sells 100% of its BVI hold-co. The BVI entity’s sole asset is a 70% stake in a Vietnamese manufacturing LLC. The full sale price is attributable to the Vietnamese interest: 2% CIT is payable on the gross consideration allocated to the Vietnamese LLC.

Scenario B, multi-asset platform sale. A fund sells its Cayman Islands vehicle, which holds subsidiaries in Vietnam (40% of net asset value), Thailand (35%) and Indonesia (25%). Only the portion of the sale price attributable to the Vietnamese subsidiary triggers the Vietnam indirect share transfer tax. The taxpayer must document the allocation methodology (typically on an NAV basis) and be prepared to defend it before the General Department of Taxation (GDT).

Who Is Taxed and Who Must Withhold?

Bottom line: the seller is the taxpayer, but the Vietnamese enterprise may be obligated to withhold and remit on behalf of a non-resident seller.

Under Decree 320/2025/NĐ-CP, the primary taxpayer for the Vietnam indirect share transfer tax is the entity realising Vietnam-source income from the transfer, that is, the foreign seller. Where the foreign seller has a registered tax code in Vietnam (for instance, through a branch or representative office), it files and pays directly. Where it does not, the decree designates the Vietnamese enterprise whose capital is ultimately transferred as the withholding agent.

The buyer can also bear practical obligations. If the buyer is a Vietnamese entity, tax authorities may require it to confirm that tax has been withheld before registering the ownership change. In cross-border contexts where both buyer and seller are non-resident, the Vietnamese target company itself becomes the reporting party, an obligation that many target-company directors are not yet operationally prepared for.

When transferring shares to someone overseas, or receiving them, both parties should confirm withholding responsibilities in the SPA and allocate documentary obligations clearly.

How Is the 2% Deemed CIT Calculated? Worked Examples

Bottom line: the formula is simple, 2% × gross transfer proceeds attributable to the Vietnamese interest, but the allocation methodology requires careful documentation.

The deemed CIT is calculated as follows:

Tax payable = 2% × Gross sale proceeds allocated to the Vietnamese enterprise

No deduction for cost basis, expenses or losses is permitted. The gross sale proceeds are the total consideration stated in the transfer agreement (or, where the tax authority considers the stated price not to reflect arm’s-length value, the price re-determined by the tax authority).

Example 1, direct LLC capital transfer. A foreign investor sells its 100% contributed capital in a Vietnamese LLC for USD 10 million. Tax payable: 2% × USD 10,000,000 = USD 200,000.

Example 2, indirect JSC transfer via offshore hold-co. A fund sells its Cayman vehicle for USD 25 million. NAV analysis shows 60% of value is attributable to the Vietnamese JSC subsidiary. Allocated gross proceeds: USD 25,000,000 × 60% = USD 15,000,000. Tax payable: 2% × USD 15,000,000 = USD 300,000.

When Transaction-Value Allocation Matters

For indirect transfers, the allocation step is where disputes arise. Decree 320 does not prescribe a single allocation methodology, but early GDT guidance suggests net asset value at the date of transfer is the default benchmark. Deal teams should:

1. Prepare a contemporaneous valuation report allocating the total consideration to each jurisdiction’s assets.
2. Ensure the valuation methodology is consistent with any transfer-pricing documentation already on file.
3. Retain board resolutions, independent valuation reports and financial statements to support the allocation.

Exceptions and exclusions. Decree 320 provides limited carve-outs. Intra-group reorganisations that satisfy specific conditions, such as no change in ultimate beneficial ownership and no cash consideration, may be exempt. However, the conditions are narrowly drafted and require advance documentation. Deal teams should not assume an exemption applies without confirming the precise Decree 320 requirements with qualified Vietnamese tax counsel.

Interaction with the Proposed 20% PIT for Individuals

Bottom line: where the seller is an individual, a separate personal income tax regime applies, and proposed legislative amendments could increase exposure.

The 2% deemed CIT under Decree 320/2025/NĐ-CP applies to corporate taxpayers. Individual sellers are subject to the Personal Income Tax Law, which applies different rates depending on whether the transferred interest is a listed security or unlisted capital:

• Listed securities (JSC shares traded on an exchange). Individual sellers pay 0.1% of the gross sale proceeds, a securities-transaction tax, regardless of gain or loss.
• Unlisted shares and contributed capital. Under the current PIT Law, individual sellers pay 20% on the net gain (sale price minus cost basis and allowable expenses). The proposed PIT amendments, if enacted, would retain the 20% rate but expand the definition of taxable transfers and tighten cost-basis substantiation rules.

Dual exposure, where both a corporate entity and an individual are involved in a layered transfer, is theoretically possible but is intended to be addressed through the taxpayer-identification rules in Decree 320. Industry observers expect the Ministry of Finance to issue clarifying guidance once the PIT amendments are finalised. In the interim, deal teams should model both CIT and PIT outcomes where the selling chain includes individual shareholders.

JSC vs LLC: Practical Differences for Deal Structure and Vietnam Indirect Share Transfer Tax Outcomes

Bottom line: the choice of entity type, joint stock company or limited liability company, determines which tax mechanism applies and how the procedure for transfer of shares is documented.

Vietnamese law draws a sharp distinction between transfers of securities (phát hành cổ phần, i.e., JSC shares) and transfers of contributed capital (phần vốn góp, i.e., LLC membership interests). The distinction affects the applicable tax rate, the transfer-registration procedure and the SPA drafting approach.

The structural choice between a JSC and an LLC therefore has direct Vietnam share transfer tax 2026 consequences. Where a foreign investor is establishing a new vehicle for a planned exit, early consideration of entity type can yield meaningful tax savings, particularly the difference between 0.1% on listed JSC shares and 2% on unlisted or LLC capital.

Filings, Timing and Penalties: Seller and Buyer Checklist

Bottom line: tight filing windows and escalating penalties make early preparation essential.

The procedure for transfer of shares under the Decree 320 regime requires the following steps:

1. Pre-completion: Obtain a tax code (if the foreign seller does not have one) or confirm the Vietnamese enterprise’s withholding-agent status with the local tax authority.
2. At completion: Submit the CIT return (or withholding return) to the tax authority managing the target company’s registration within 10 business days of the transfer date.
3. Supporting documentation: Attach the SPA (or a certified extract), the valuation report supporting the allocation of proceeds to Vietnam, evidence of payment, and the enterprise-registration certificate of the Vietnamese entity.
4. Post-completion: Retain all documentation for a minimum of 10 years (the standard retention period under Vietnamese tax-administration law) to support future audits.

Penalties for late filing or underpayment include interest on overdue tax (currently calculated daily at 0.03% of the outstanding amount) and administrative fines that can reach 20% of the underpaid tax for significant understatements. In cases of deliberate evasion, criminal sanctions may apply.

Sector and Structure Examples

Bottom line: real-estate funds, PE exits and multi-jurisdictional platforms each present distinct Vietnam indirect share transfer tax challenges.

Real-estate fund exit. A regional real-estate fund holds a Singapore SPV that in turn owns a Vietnamese JSC operating a hotel asset in Ho Chi Minh City. The fund sells the Singapore SPV to a new investor for USD 40 million. The Vietnamese JSC constitutes 100% of the SPV’s value. The 2% deemed CIT applies to the full USD 40 million, yielding a tax liability of USD 800,000, a figure that should be modelled into the fund’s IRR calculations before marketing the asset. For more context on Vietnam’s evolving investment law framework for foreign investors, see our companion guide.

Cross-border PE exit. A private-equity fund exits a Vietnamese manufacturing platform by selling its BVI holding company to a strategic acquirer. The BVI entity holds interests in Vietnam (55% of NAV) and Cambodia (45%). Only the Vietnam-attributed portion triggers Vietnam tax. The fund and acquirer negotiate tax-indemnity language allocating the estimated USD 550,000 liability (2% × USD 27.5 million) to the seller, with a post-closing true-up mechanism once the final assessment is issued.

Practical SPA Drafting and Tax-Indemnity Language

Bottom line: SPAs for Vietnamese exits should now contain at least four tax-related protective clauses.

• Gross vs net price. Define whether the stated purchase price is inclusive or exclusive of the seller’s Vietnam indirect share transfer tax liability. A clear statement avoids post-closing disputes: “The Purchase Price is stated on a gross basis and is inclusive of all taxes payable by the Seller in connection with the Transfer, including any CIT arising under Decree 320/2025/NĐ-CP.”
• Tax indemnity. The buyer should require the seller to indemnify against any reassessment of the transfer price by the Vietnamese tax authority that results in additional tax, interest or penalties: “The Seller shall indemnify and hold harmless the Buyer and the Target Company against any Tax Liability arising from a re-determination of the Transfer Price by the competent tax authority.”
• Tax gross-up and escrow. For indirect transfers, consider an escrow equal to the estimated 2% liability, released upon confirmation that the tax has been accepted as final by the GDT. This protects the buyer if the Vietnamese enterprise is designated as withholding agent.
• Pre-closing tax covenant. Require the seller to file all outstanding tax returns and settle any pre-closing tax liabilities of the target company before the transfer date, with a representation that no tax audits are pending.

These clauses should be reviewed by Vietnamese tax counsel to confirm alignment with Decree 320 requirements and current GDT administrative practice.

Conclusion

The 2% deemed CIT under Decree 320/2025/NĐ-CP has made the Vietnam indirect share transfer tax a front-of-mind issue for every cross-border M&A transaction touching Vietnamese assets. With the proposed 20% PIT on unlisted-share gains still under legislative review and GDT administrative guidance still evolving, deal teams need both a clear understanding of the current rules and flexible SPA drafting that anticipates further change. Whether structuring through a JSC or an LLC, managing a fund exit or negotiating a platform sale, early engagement with qualified Vietnamese M&A and tax counsel is essential to protect transaction economics and avoid post-closing surprises. For tailored guidance, connect with a specialist through the Global Law Experts lawyer directory.

Sources

1. Vietnam Official Gazette (Công Báo), Decree No. 320/2025/NĐ-CP
2. National Legal Database (VBPL), Law No. 67/2025/QH15 (Law on Corporate Income Tax 2025)
3. VBPL, Decree 320/2025/NĐ-CP (Ministry of Finance compilation)
4. Government Portal, vanban.chinhphu.vn (Decree publication and indexing)
5. General Department of Taxation (Tổng cục Thuế), tax procedure guidance
6. Ministry of Finance / VBPL, official explanatory documents and circulars