How are asset transactions subject to taxation?

The following article clarifies the current situation of asset transactions related to taxation, analyzes the relevant legal provisions, and addresses common questions concerning such transactions.

I. Current situation of asset transactions related to taxation

In recent years, along with the development of the real estate and securities markets, activities such as purchase, transfer, donation, and inheritance of assets have increasingly expanded. However, in practice, the fulfillment of tax obligations in asset transactions still reveals various shortcomings, including:

Widespread tax evasion and inaccurate tax declarations:

• Many individuals, when transferring real estate, declare transaction values lower than the actual value in order to reduce personal income tax and registration fee liabilities.
• In certain cases, individuals exploit transactions involving donation or inheritance among relatives to avoid tax obligations.

Limited legal awareness regarding tax obligations:

• A considerable number of individuals, particularly in rural areas, lack a clear understanding of tax regulations applicable to different types of asset transactions (such as personal income tax, corporate income tax, registration fees, value-added tax, etc.), leading to incorrect declarations or delayed tax payments.

Difficulties in tax administration:

• Tax authorities face challenges in verifying the actual value of asset transactions, especially real estate, due to significant discrepancies between market prices and state-prescribed prices.
• Verification and reconciliation of information regarding asset transactions (such as informal handwritten transfer agreements without notarization) remain limited.

The above situation demonstrates that compliance with tax regulations in asset transactions is not yet stringent, thereby requiring both enhanced compliance awareness among individuals and enterprises and strengthened state management and supervision mechanisms.

II. Legal regulations on asset transactions related to taxation

Vietnamese law provides specific regulations governing asset transactions associated with tax obligations to ensure transparency, fairness, and the mitigation of legal risks for involved parties, as follows:

1. What are asset transactions related to taxation?

Asset transactions related to taxation mean civil, commercial, or investment transactions involving assets (such as real estate, movable property, securities, or property rights) that lead to tax or fee obligations in accordance with the law.

2. What types of taxes are applicable to asset transactions under Vietnamese law?

Depending on the type of asset and form of transaction, tax obligations may include:

• Personal Income Tax (PIT): Pursuant to Article 3 of the Law on Personal Income Tax 2007 (as amended and supplemented in 2012, 2014, and 2024), taxable income includes income derived from real estate transfers, securities transfers, inheritance, and donation comprising real estate, securities, capital contributions, etc.
• Corporate Income Tax (CIT): Under Article 3 of the Law on Corporate Income Tax 2025, enterprises earning income from asset transfers, project transfers, real estate transactions, or resource exploitation rights are required to pay CIT.
• Value-Added Tax (VAT): According to Article 3 of the Law on Value-Added Tax 2024, VAT applies to the supply of goods and services, including asset transfers classified as taxable goods (except for exempt cases).
• Registration Fee: Pursuant to Article 3 of Decree No. 10/2022/ND-CP (as amended and supplemented by Decree No. 51/2025/ND-CP and Decree No. 175/2025/ND-CP), organizations and individuals must pay registration fees when registering ownership or usage rights of assets (such as houses, land, automobiles, vessels, aircraft, etc.).
• Other taxes and fees (depending on the case): Such as natural resource tax (under the Law on Natural Resource Tax 2009, as amended in 2014 and 2022); land use fees and land rental (under Decree No. 103/2024/ND-CP); environmental protection tax (under the Law on Environmental Protection Tax 2010).

3. How is the taxable value determined in asset transactions?

As a general principle, the taxable value is determined based on the actual transaction value, unless the law requires the application of state-issued price brackets or prices determined by competent authorities.

Additionally, depending on each type of tax, the method of determination varies, for example:

Personal income tax from real estate transfers: Pursuant to Clause 1 Article 21 and Article 12 of Circular No. 111/2013/TT-BTC (as amended by Article 17 of Circular No. 92/2015/TT-BTC), the payable PIT is calculated as follows:

• Payable PIT = Transfer price (per transaction) × Tax rate of 2%.

Personal income tax from securities transfers: According to Article 16 of Circular No. 92/2015/TT-BTC (amending Clause 2 Article 11 of Circular No. 111/2013/TT-BTC), individuals transferring securities are subject to a tax rate of 0.1% on the transfer price per transaction.

Corporate income tax from real estate transfers: Pursuant to Articles 6 and 7 of the Law on Corporate Income Tax 2025, the tax base is taxable income and the applicable tax rate. Taxable income for a tax period is determined as follows:

• Taxable income = Taxable income – Tax-exempt income + Losses carried forward in accordance with regulations.

Registration fee: Under Clause 5 Article 8 of Decree No. 10/2022/ND-CP (as amended by Decree No. 51/2025/ND-CP and Decree No. 175/2025/ND-CP), registration fee rates for automobiles are prescribed as percentages, for example: 2% for trailers, semi-trailers, four-wheeled motor vehicles, specialized vehicles, and similar types; 10% for passenger cars with up to 9 seats (including pick-up vehicles) upon first registration; etc.

III. Questions on asset transactions related to taxation

1. Are there any cases where asset transactions are eligible for tax exemption or reduction?

Tax exemptions or reductions may apply in specific cases, such as:

• Exemption from personal income tax: For example, income derived from inheritance or donation of real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grandchildren; or siblings; income from the conversion of agricultural land allocated by the State for production purposes (Article 4 of the Law on Personal Income Tax 2007, as amended).
• Exemption from corporate income tax: For example, income distributed from capital contributions, share acquisitions, joint ventures, or business cooperation with domestic enterprises after CIT has been paid; income from the initial transfer of emission reduction certificates or carbon credits; income from interest on green bonds; income from the first transfer of green bonds after issuance (Article 4 of the Law on Corporate Income Tax 2025).
• Exemption from VAT: For example, transfers of land use rights; imported goods in cases of humanitarian or non-refundable aid (Article 4 of the Law on Value-Added Tax 2024).

2. How is tax declared when the seller in an asset transaction is a foreign individual?

Foreign individuals deriving income from asset transfers in Vietnam are still subject to taxation in Vietnam (Articles 2 and 3 of the Law on Personal Income Tax 2007). Accordingly, the buyer or an intermediary organization (such as a real estate exchange or securities company) is responsible for withholding and remitting tax on behalf of the foreign individual (Article 26 of Circular No. 111/2013/TT-BTC).

3. When is an asset transaction considered tax evasion?

Pursuant to Article 143 of the Law on Tax Administration 2019, acts of tax evasion include:

• Failure to submit tax registration dossiers; failure to submit tax declarations; or submission of tax declarations more than 90 days after the statutory deadline or extended deadline.
• Failure to issue invoices when supplying goods or services as required by law, or issuing invoices with values lower than the actual transaction value.
• Use of illegal invoices or documents, or improper use of invoices to account for input goods or materials in a way that reduces payable tax or increases refundable, exempted, or deductible tax amounts.
• Use of documents or records that do not reflect the true nature or value of transactions, resulting in incorrect tax determination.

4. How are taxes calculated in asset transfers between a parent company and its subsidiary?

In cases where assets are transferred between a parent company and its subsidiary, such transactions are still treated as independent transfers and therefore lead to tax obligations similar to transactions with third parties, unless special exemptions or incentives apply.

Applicable taxes typically include corporate income tax (on transfer income), registration fees (for registrable assets), and value-added tax (if applicable).

The taxable value is not determined based on the “parent–subsidiary” relationship but must reflect market value or prices prescribed by competent authorities to prevent transfer pricing practices aimed at reducing tax liabilities.

5. What administrative sanctions apply to violations related to asset transactions and taxation?

Administrative sanctions are provided under Decree No. 125/2020/ND-CP. For example, Article 17 prescribes sanctions for tax evasion as follows:

A fine equal to one time the evaded tax amount applies where the taxpayer has at least one mitigating circumstance and commits violations such as:

• Failure to submit tax registration or tax declaration dossiers, or submission of tax declarations more than 90 days late (except as provided in specific cases under Article 13 of the Decree);
• Failure to record revenues in accounting books related to determining payable tax amounts; failure to declare or incorrect declaration leading to underpayment or over-refund/exemption of tax (except for cases specified in Article 16);
• Failure to issue invoices when selling goods or services, except where the taxpayer has declared the corresponding revenue in the relevant tax period; issuance of incorrect invoices regarding quantity or value to understate tax liabilities;

A fine equal to 1.5 times the evaded tax amount applies where no aggravating or mitigating circumstances are present.

IV. Legal advisory services on asset transactions related to taxation

Legal advisory services in this area can assist with:

• Advising on tax obligations: Identifying applicable taxes and fees arising from each type of transaction (transfer, donation, inheritance, securities trading, etc.).
• Advising on tax exemptions and reductions: Reviewing documentation to determine eligibility for tax incentives.
• Supporting tax declaration and finalization: Preparing and submitting tax filings, and representing clients before tax authorities.
• Advising on tax dispute resolution: Handling complaints or administrative lawsuits related to tax decisions issued by competent authorities.
• Advising on international transactions: Providing guidance on tax obligations for foreign individuals and organizations transferring assets in Vietnam.
• Advising on tax compliance and risk prevention: Minimizing risks of penalties, tax evasion allegations, or tax fraud.

Should you have any further inquiries regarding asset transactions related to taxation or other legal matters, please contact NPLaw for direct consultation and guidance from our team.