Vietnam finance ministry proposes 0.1% tax on gold bullion sales

A draft amendment to the Personal Income Tax Law has been submitted to the National Assembly, featuring a notable provision: a proposed personal income tax of 0.1 percent on the transfer value of gold bullion.

The measure is meant to help regulate the gold market; however, experts have urged policymakers to draw a clear distinction between speculative trading and legitimate public demand for gold as a savings instrument.

A 0.1% tax on each transfer

Speaking at a regular briefing on October 3, Luu Duc Huy, deputy director of the Tax Policy Department under the Ministry of Finance, confirmed that the draft amendment includes the proposed 0.1-percent tax on the transfer price of gold bullion -- a topic that has attracted widespread public attention.

For example, if Nguyen Van A sells one tael of gold for VND 137 million (US$5,600), he would be required to pay VND137,000 ($5.6) in personal income tax.

A tael equals 37.5 grams.

As for when the law would take effect, the draft proposes that the National Assembly delegate the authority to determine the implementation date to the central government.

Huy explained the rationale behind the proposal: under current regulations, individuals are not permitted to trade gold bullion commercially. 

Therefore, the draft does not propose taxing income derived from business activities related to gold bullion. 

Instead, it focuses specifically on taxing income from the transfer of gold bullion.

Distinguishing speculation from savings

Many experts believe that imposing a personal income tax on gold transactions is necessary to curb speculative behavior. 

However, they stress the need to distinguish between short-term speculation and long-term saving to avoid penalizing those who purchase gold as a means of preserving their earnings.

According to Nguyen Quang Huy of Nguyen Trai University in Hanoi, the habit of saving in gold is deeply rooted in Vietnamese culture.

Many households hold only a few taels of gold as 'savings for the future.' 

Applying a uniform tax to all transactions would inadvertently increase costs for this group -- people with no intention of trading or speculating.

Huy therefore recommended taxing only the profit margin rather than the total transfer value, and setting a reasonable exemption threshold.

For instance, exemptions could apply to annual profits below a certain level or to small-scale transactions. 

Such a consideration would ensure fairness while avoiding unnecessary administrative burdens.

Another factor worth considering is the holding period. 

Tax reductions or exemptions could be granted for long-term holdings, for instance, gold kept for more than three years. 

This approach would encourage stable savings while discouraging short-term speculative trading.

Huy emphasized that any taxation policy on gold transactions must be designed with care and nuance.

“It should target speculative activities while protecting small savers. A well-balanced policy would not only promote fairness and strengthen public trust, but also pave the way for a more formal and sustainable financial market,” he said.