In a letter sent to the Prime Minister, the Government Office, and the Ministry of Finance, VAFI said the new method would create a more advanced taxation system for Vietnam’s stock market.

Under the current system, investors pay a presumptive tax of 0.1 percent on the total value of securities sold, regardless of whether the transaction yields a profit or a loss. Additionally, a 5 percent tax is applied on the nominal value of VND10,000 per bonus share. VAFI said this requires urgent reform.

The proposed CGT method would calculate personal income tax (PIT) based on only the profit from securities sales, determined by subtracting the total purchase value (based on the average purchase price) from the total sale value (based on the average selling price), then applying a tax rate. 

VAFI recommended a 3 percent tax rate, which it considers reasonable to encourage stock market growth, attract broader public participation, and support listed companies in raising capital from both domestic and foreign investors.

VAFI urged the inclusion of the CGT method in the draft PIT Law 2025, specifically for securities transactions involving companies listed on the stock exchange. The association also proposed applying the same tax calculation method to foreign individuals and organizations not established as legal entities in Vietnam but that participate in the stock market. 

Most countries worldwide are applying the CGT method to calculate PIT for securities transfer transactions. In the ASEAN region, only Vietnam and Indonesia still use the presumptive tax method, taxing 0.1 percent on the total sale value of securities, regardless of whether the transaction results in a profit or loss, according to VAFI.

Additionally, VAFI called for the elimination of PIT on bonus shares to further simplify the tax structure.

Hanh Nguyen