To increase transparency and curb gold speculation, the government has directed that the Personal Income Tax Law must clearly define taxable income from gold trading. The key question now is how tax should be applied and at what rate.

Speaking to VietNamNet, Dr. Nguyen Tri Hieu, a banking and finance expert, recommended taxing profits instead of the total transaction value.

He explained that taxing transaction value is inappropriate, as the money used to buy gold may already be post-tax income from salaries or businesses. Imposing tax again on the entire transaction value could lead to double taxation.

"I support taxing the difference between purchase and selling price, meaning only the profit earned from gold trading. A 20% tax rate on profit would be more accurate and fair," said Hieu.

However, Hieu noted that taxing profit is not easy to implement, especially when it’s difficult to determine the original purchase price, such as in cases where gold was bought decades ago. He proposed that the Ministry of Finance adopt a reference average price for specific periods and require sellers to declare their original purchase dates. The average price, as published by the Ministry, would serve as the basis for calculating the difference between buying and selling prices.

He suggested using average prices calculated over 3-year, 5-year, or 10-year periods. Selling prices, he added, are easier to track, as all gold selling transactions typically go through licensed dealers. With both entry and exit prices in place, calculating profits becomes more transparent.

Currently in Vietnam, almost all income-generating activities are taxable, including investments and labor income. For example, real estate transfers are taxed at 2% of the sale price, while stock trades incur a 0.1% tax on the transaction value.

"If Vietnam adopts a profit-based gold tax, it would be both reasonable and an effective measure to reduce speculation in the gold market," Hieu emphasized.

Proposal for two tax levels on personal gold trading

While Hieu supports a 20% profit-based tax, Nguyen Van Duoc, Head of Policy at the Ho Chi Minh City Tax Advisory and Agency Association and General Director of Trong Tin Accounting and Tax Consulting Co., advocates for taxing the transaction value at a rate of 0.5% to 1.5%.

Duoc argued that in the jewelry market, where gold is mixed with other metals and crafted into finished products, it should be treated as a commodity. In these cases, value-added tax (VAT) and export taxes would apply. If traded by businesses, corporate income tax would also be imposed.

For gold bars, according to Clauses 22 and 25 of Article 5 of the VAT Law, unprocessed gold bars are not subject to VAT if sold by individuals or non-trading entities. Current law specifies that individuals, businesses, or households importing and selling gold bars are exempt from VAT.

However, if gold bars are reclassified as commodities, Duoc suggested amending the law to impose a 10% VAT on imported and sold gold bars handled by licensed dealers.

For individuals trading gold bars, a combined tax rate of 1.5% could be applied (1% VAT and 0.5% personal income tax). Alternatively, if gold is not considered an investment activity, only a 0.5% personal income tax could be collected, with no VAT. Licensed gold dealers would be responsible for withholding tax at the point of sale.

According to Duoc, this taxation approach would reduce gold's appeal as an investment channel, encouraging people to shift idle funds into savings or business ventures. This shift would occur naturally through market forces.

"Taxing gold transactions, combined with mandatory e-invoicing, would increase budget revenues, deter speculation, and allow for better market control. In the long run, Vietnam should establish an official gold trading floor to promote transparency, making it easier to adjust tax policies accordingly," Duoc added.

Nguyen Le