In 2026, Vietnam is expected to implement significant changes to personal income tax (PIT), particularly concerning profits from stock trading. These adjustments could affect investors and technology employees working in Vietnam. This article will provide a detailed overview of the new tax proposals and what you need to know.
Overview of the New Tax Proposal
The Ministry of Finance of Vietnam has proposed a new PIT policy. Accordingly, individuals transferring securities or capital will be taxed at 20% on actual profits, calculated annually. This proposal is part of a draft law replacing the current PIT Law and is open for public consultation. The objective is to align with international tax trends and address previous implementation challenges.
Currently, the PIT Law (Law No. 04/2007) allows taxpayers to choose between two tax calculation methods. First, a 20% tax on annual net income. Second, a fixed tax rate of 0.1% on the selling price of each transaction if there is no documentation proving the cost price. However, in practice, most taxpayers opt for the 0.1% method due to its simplicity and the absence of year-end tax finalization. Some experts and taxpayers argue that taxing even losing trades is unreasonable. Therefore, they propose taxing only actual profits. This new proposal is based on both practical difficulties and international trends.
Details on How Stock Profit Tax is Calculated
According to the new proposal, individuals residing in Vietnam will be subject to a 20% tax on actual profits from securities transfers within the tax year. Taxable income will be determined by the selling price minus the cost price and any related expenses incurred to generate that income.
However, if the cost price and related expenses cannot be verified, a progressive tax calculation method will be applied. Specifically, a fixed tax rate of 0.1% will be applied to the selling value of each transaction. This represents a change from the current regulations.
Many experts and market participants are concerned that the 20% tax rate may be too high. This could potentially discourage individual investors, especially newcomers to the market. They argue that taxing losses is unfair. Therefore, allowing investors to choose their tax calculation method or to carry forward losses to subsequent years is crucial. This will ensure fairness and encourage long-term engagement with the market.
Comparison with International Tax Methods
Countries worldwide have diverse approaches to taxing income from investment and securities trading. For instance, Indonesia applies a 0.1% withholding tax on revenue from listed stocks. The Philippines taxes 0.6% on the total transaction value. Japan imposes a fixed rate of 20.3% on profits from certain types of securities. China taxes 20% on income from unlisted securities. Thailand generally treats capital gains as ordinary income, with some specific exemptions.
Referencing international models will help Vietnam build a suitable tax system.
General Personal Income Tax in Vietnam in 2026
In addition to the stock tax regulations, Vietnam’s PIT system also includes important adjustments. For resident individuals, Vietnam applies a progressive tax system with tax brackets ranging from 5% to 35%.
The monthly taxable income brackets (in million VND) and their corresponding tax rates are as follows:
- Below 10 million: 5%
- From over 10 to 30 million: 15%
- From over 30 to 60 million: 25%
- From over 60 to 100 million: 30%
- Above 100 million: 35%
Starting from January 1, 2026, each resident individual will be entitled to a monthly personal deduction of 15,500,000 VND. Additionally, there will be a deduction for dependents, amounting to 6,200,000 VND per month per dependent. These deductions help reduce the tax burden for low and middle-income earners.
For non-residents, the applicable tax rate is 20% on income from salaries and wages earned in Vietnam. Business income may be subject to tax rates ranging from 1% to 5% depending on the type of activity. PIT compliance in Vietnam for remote teams also requires attention.
Impact on Technology Employees
Technology employees, especially those working for foreign companies or earning high incomes, may be affected by the tax changes. If they engage in stock trading, profits from these activities will be subject to the new regulations.
The application of a 20% tax on profits may cause high-income earners to reconsider their investment strategies. However, if they can clearly demonstrate costs and cost prices, a 20% tax on actual profits might still be reasonable. Tax optimization strategies for expatriates in Vietnam in 2026 will become increasingly important.
Furthermore, general PIT regulations, including the progressive tax brackets and deductions, also affect their monthly taxable income. Understanding these regulations helps them plan their finances more effectively. The PIT brackets for high earners in Vietnam in 2026 will have notable aspects.
Concerns and Proposals from the Market
Many experts believe that Vietnam’s capital market is still young and needs nurturing. Imposing excessively high taxes could hinder this development. Instead of focusing solely on tax collection, regulatory bodies should prioritize expanding the tax base by encouraging long-term investor participation. Overly heavy taxation could stifle future revenue potential.
Some other proposals include:
- Allowing investors to choose between the progressive tax calculation method and the fixed tax rate method.
- Permitting the carry-forward of losses from unprofitable investment years to profitable ones.
- Implementing family allowances for professional investors.
- Clarifying the allocation of interest expenses when investing in multiple types of securities.
Clarifying these issues is necessary to build a transparent and fair tax system.
Other Tax Updates in 2026
The year 2026 also marks changes in other tax areas, affecting both businesses and individuals. One notable development is the issuance of Decree No. 236/2025/ND-CP on the Global Minimum Tax (GMT), effective from the 2024 fiscal year. This impacts multinational corporations with consolidated revenue of EUR 750 million or more. These new regulations require companies to assess risks and prepare promptly.
Additionally, the amended PIT Law is expected to take effect from July 1, 2026, with some provisions on income from salaries, bonuses, and business activities potentially taking effect earlier from January 1, 2026. This reform aims to broaden the tax base, reduce the burden on low and middle-income earners, while enhancing purchasing power and tax equity.
These changes are part of Vietnam’s fiscal modernization strategy for the 2025-2030 period, moving towards an integrated, transparent, and technology-driven tax system. Understanding these changes helps individuals and businesses proactively plan and comply with tax laws.
Frequently Asked Questions (FAQ)
When will the new stock profit tax regulations take effect?
The new PIT regulations, including the stock profit tax, are expected to take effect from July 1, 2026. However, some provisions related to income from salaries, bonuses, and business activities might take effect earlier from January 1, 2026. The exact timing will depend on the official legal documents.
Which tax calculation method can I choose for stock profits?
Currently, the new proposal is to tax 20% on actual annual profits. However, if costs cannot be verified, a 0.1% tax rate on the selling price per transaction may apply. Experts suggest allowing investors to choose between methods to ensure fairness.
How is taxable income from securities determined?
Taxable income is determined by the selling price minus the cost price and any direct expenses related to generating that income. Keeping all invoices and documents is crucial.
I am a foreigner working in Vietnam, will I be affected?
Yes, if you are a resident in Vietnam, your profits from securities transactions will be taxed according to the new regulations. Additionally, general PIT regulations for foreigners will also apply. Understanding how to calculate PIT under the new progressive method from 2026 is essential.
Conclusion
The changes to stock profit tax and general PIT in 2026 are poised to have significant impacts on Vietnam’s investment community and workforce. Understanding the new regulations, their potential implications, and being prepared is key to navigating the evolving tax landscape successfully. Investors and technology employees should closely monitor official announcements from tax authorities and seek professional advice when necessary.