Tax on share transfers and dividends: the 2% tax on gross proceeds for foreign sellers, securities, indirect transfers, intra-group restructurings, Vietnamese and individual sellers, who declares, dividends and the conditions for paying profits abroad

The 2025 reform

Until December 2025 a foreign company that sold capital in a Vietnamese limited liability company, or unlisted shares in a joint stock company, paid CIT at 20% on its net gain, the sale price less the cost of the investment and transfer expenses. The computation was a source of constant dispute: the cost base had to be proved with capital contribution records, foreign currency gains and losses were contested, and indirect transfers were taxed in principle but rarely collected. Law No. 67/2025/QH15 and Decree No. 320/2025/ND-CP replaced that system. From 15 December 2025 a foreign enterprise, with or without a permanent establishment in Vietnam, that transfers capital in a Vietnamese company pays CIT at 2% of the gross proceeds, whether the sale produces a gain or a loss (Article 12(3), Decree No. 320/2025/ND-CP) (FAQ 25).

Circular No. 20/2026/TT-BTC, issued on 12 March 2026, guides the rule, and Circular No. 21/2026/TT-BTC, issued on 17 March 2026, introduced Form 05/TNDN for declaring each transfer. The new rule is simpler and more certain, but it is a tax on turnover, not profit: a seller exiting at a loss still pays 2% of what it receives, and a seller with a small gain may pay more than under the old system. The comparison should be made before every exit, and ideally before the investment is made, because the holding structure and the way capital is contributed affect the outcome.

What is taxed: capital, securities and project rights

The 2% rate applies to income from the transfer of capital, which covers a member's capital in a limited liability company, shares in a joint stock company that are not securities traded under the securities law, rights to participate in an investment project and contribution rights in a business cooperation contract. The place where the transfer contract is signed or performed is irrelevant; a sale between two foreign companies, signed and paid abroad, of an interest in a Vietnamese company is taxable in Vietnam. Taxable revenue is the whole consideration, in money or in kind, and it arises when the initial transfer agreement takes effect, not when the change of owner is registered (Circular No. 20/2026/TT-BTC); the Civil Code generally makes a contract effective on conclusion unless the parties agree otherwise, so the date of signing usually fixes the tax point.

The transfer of securities, including listed and registered shares of public companies, fund certificates and bonds, by a foreign organisation remains taxed at 0.1% of the transfer price, withheld by the securities company or custodian. A sale of a stake in a listed company is therefore taxed at 0.1%, while a sale of a stake of the same value in an unlisted company is taxed at 2%. Where a foreign company sells capital that it acquired by in-kind contribution, or receives payment in shares of the buyer, the value of the consideration must be established, and the tax authority may reassess a price it considers below market under the tax administration law.

Indirect transfers

An indirect transfer is the sale of a foreign holding company, at any level of the chain, that directly or indirectly owns capital in a Vietnamese company. Decree No. 320/2025/ND-CP brings indirect transfers within the 2% tax, and Law No. 108/2025/QH15, in force from 1 July 2026, closes the collection gap by requiring the Vietnamese entity in which the indirect investment arises to withhold, declare and pay the tax. A global sale of a group that includes a Vietnamese subsidiary can therefore create a Vietnamese tax liability, and an obligation on the Vietnamese subsidiary, even though neither the seller nor the buyer is in Vietnam and the subsidiary is not a party to the contract.

Two questions follow in every such transaction: how much of the price is attributable to the Vietnamese company, and whether a treaty between Vietnam and the seller's state prevents Vietnam from taxing. Article 30 of Circular No. 95/2026/TT-BTC deals with gains from direct and indirect share transfers under the treaties, including how the immovable-property ratio is measured, averaged at specified times using financial statements that need not be audited, and its heading has been read as signalling that Vietnam will seek to tax indirect transfers even where a treaty refers only to shares of a Vietnamese resident company. A seller relying on a treaty must claim relief by dossier within three years (Foreign contractor tax and tax treaties).

Intra-group restructurings

A restructuring within a group does not trigger the 2% tax if it does not change the ultimate parent entity of the holding entities and no income arises. Article 7(2)(m) of Circular No. 20/2026/TT-BTC lists the transactions covered, including division, separation, consolidation, merger, share swaps, contributions of capital in shares, distributions of shares as profit within the group, and other transfers that change direct or indirect ownership while keeping the ultimate ownership ratio, and requires four conditions to be met together: there is no change in the ultimate beneficial owner; the transfer value is not recorded above book value or the original contributed capital; the value in the restructuring plan approved by the authorities is not higher than the value recorded at transfer; and the transferee inherits the whole capital value, obligations and rights of the transferor's investment.

The exemption is narrower than it looks. The circular does not define the ultimate beneficial owner for this purpose, does not say whose book value is used, and does not say whether the third condition applies only where a Vietnamese authority approves the restructuring. A group planning to insert a regional holding company above its Vietnamese subsidiaries, or to merge two holding companies, should document each condition, transfer at book value, and consider whether to seek written guidance from the tax authority before completing.

Vietnamese and individual sellers

A Vietnamese company that sells capital or shares is taxed on the net gain, the price less the cost of acquisition and transfer expenses, as part of its ordinary taxable income at 20%, and under Decree No. 320/2025/ND-CP the loss on such a transfer may now be offset against ordinary business profits and vice versa (Corporate income tax). A Vietnamese company that is itself foreign-owned is a Vietnamese seller for this purpose, so a sale by a Vietnamese holding company is taxed on the gain while a sale by its foreign parent is taxed at 2% of proceeds; that difference can be decisive in structuring an exit.

An individual is taxed under Law No. 109/2025/QH15 on Personal Income Tax: 0.1% of the price for shares in joint stock companies, public or not; for capital in a limited liability company, 20% of the gain or 2% of the price where the cost cannot be established; and the sale of a whole company whose value lies in real estate is treated as a real estate transfer taxed at 2%. Non-resident individuals are also taxed on transfers of Vietnamese capital, and the method should be confirmed against Decree No. 253/2026/ND-CP before signing (Personal income tax and expatriates).

Who declares and pays, and when

The tax on a transfer by a foreign corporate seller is declared per transfer on Form 05/TNDN, no later than the tenth day after the day on which the tax obligation arises. The Vietnamese company whose capital is transferred is the party the tax authority looks to: it declares, withholds where it handles the payment, and pays on the seller's behalf, and it does so whether the buyer is Vietnamese or foreign. Where the buyer is a Vietnamese organisation that pays the price, it withholds the tax from the payment. For indirect transfers, Law No. 108/2025/QH15 places the obligation expressly on the Vietnamese entity in which the indirect investment arises.

The target company's obligation is practical as well as legal: buyers, banks handling the price through the investment capital accounts and, increasingly, the authorities ask for evidence that the tax has been declared before the transaction is completed and recorded. The sale and purchase agreement should therefore require the seller to provide the information the target needs, require the tax to be declared and paid before or at completion, and give the buyer and the target an indemnity, with a retention or escrow from the price, for the tax and any interest and penalties. Where an Article 21 registration of the acquisition is needed because foreign ownership rises in a conditional line or crosses 50%, it is made before the change of owner is recorded (Forms of investment).

How the 2% tax is handled on a direct sale by a foreign seller

1. Model the exit tax before signingCompare 2% of gross proceeds with the seller's gain, consider whether a treaty gives relief, and consider whether a sale by a Vietnamese holding company or of a listed stake would be taxed differently.
2. Agree the tax mechanics in the contractState who declares and pays, the information the seller must supply, the treatment of price adjustments and deferred consideration, and an indemnity with a retention or escrow.
3. Complete any investment registrationIf Article 21 of the Law on Investment applies, register the acquisition with the investment registration authority before the change of owner.
4. Declare on Form 05/TNDN within ten daysThe target company, or the Vietnamese buyer that pays, files Form 05/TNDN under Circular No. 21/2026/TT-BTC no later than the tenth day after the transfer agreement takes effect, with the contract and payment details, and pays the 2% tax.
5. Claim treaty relief where availableIf the seller's treaty prevents Vietnam from taxing the gain, file the treaty dossier under Circular No. 95/2026/TT-BTC with a certificate of residence; otherwise the 2% is final.
6. Register the change and pay the priceNotify the change of members or shareholders and beneficial owners within ten days, and pay the price through the buyer's and seller's investment capital accounts as the foreign exchange rules require.

Dividends

A Vietnamese company may distribute profits only out of after-tax profit, after offsetting accumulated losses and setting aside the funds required by its charter, and only if it can still pay its debts as they fall due. Dividends paid to foreign corporate shareholders bear no Vietnamese withholding tax, and there is no branch profits tax on remittances by a branch. Dividends paid to individual shareholders, resident or not, bear PIT at 5%, withheld by the company under Law No. 109/2025/QH15. Dividends received by a Vietnamese company from another Vietnamese company out of after-tax profit are exempt from CIT.

Profits leave Vietnam only once tax is settled. Under Decree No. 252/2026/ND-CP, implementing Law No. 108/2025/QH15 from 1 July 2026, a company may remit profits to its foreign investors only after it has paid all taxes, other State charges, late-payment interest and penalties that have fallen due, and must have no outstanding tax debt at the time of remittance; on termination of the investment, every obligation must be settled, including amounts not yet due (FAQ 62). In practice the company files its audited financial statements and CIT finalisation first, notifies the tax authority before the remittance and remits through the investment capital account. The banking procedure is in Profit remittance and repatriation of capital.