Proposed Gold Sales Tax: Threshold Set at 1 Ounce or More

The Vietnamese government has recently mandated the Ministry of Finance to clarify the taxation of income from gold trading under personal income tax regulations. However, experts argue that determining a fair tax structure is challenging, as it must differentiate between speculative trading and long-term accumulation.

Public Concerns

The discussion on gold taxation arises as domestic gold prices surge, maintaining a significant gap of over 17 million VND per tael compared to global rates.

Ms. Minh Thắm from Hoàng Hoa Thám, Hanoi, expressed her worries about the potential imposition of personal income tax on gold. She has been saving her monthly salary to purchase over one tael of gold over the past two years, intending to use it for family events like her child’s wedding or home renovations.

“Since I’m not trading gold for profit, should it be taxed? Moreover, my savings used to buy gold have already been subject to personal income tax. If I’m taxed again when selling the gold, wouldn’t that be double taxation? I bought gold at around 70 million VND per tael, and now it’s over 130 million VND. How will the tax be calculated fairly?” Ms. Thắm questioned.

Ms. Đào Nga from Từ Liêm, Hanoi, shared that her two taels of gold were a dowry from her parents. As this gold was not purchased for trading or investment, she finds it unreasonable to be taxed if she needs to sell it.

During the announcement of six bank inspection conclusions, the State Bank of Vietnam also addressed personal income tax on gold transactions. One inspection revealed that some individuals engaged in frequent gold trading with a bank, conducting multiple transactions daily or monthly, totaling thousands of billions of VND annually, clearly for profit.

While Decree No. 24 does not permit individuals to obtain gold trading licenses, they are allowed to buy and sell gold through licensed organizations.

“Determining whether individuals’ gold transactions with licensed organizations constitute profit-seeking activities, thus subjecting them to personal income tax, falls under the jurisdiction of the Ministry of Finance,” the inspection concluded.

What’s a Fair Tax Rate?

Mr. Nguyễn Ngọc Trọng, Director of New Partner Gold Company, noted that gold has been traded for decades, if not centuries. Taxing profits from gold trading is complicated due to the difficulty in verifying purchase prices. Taxing based on turnover, like in stocks, doesn’t align with income tax principles.

According to Mr. Trọng, the current buy-sell spread for SJC gold is 2-3 million VND per tael. Buyers already face potential losses, and adding tax would exacerbate their financial burden.

“If gold trading is to be taxed, the rate should be reasonable. Despite high gold prices, the profit margin from buying and selling is minimal,” Mr. Trọng explained.

Dr. Nguyễn Ngọc Tú, a lecturer at Hanoi University of Business and Technology, believes that taxing gold transactions would deter speculative trading. Investors would face both the buy-sell spread and income tax. For instance, buying gold at 131 million VND per tael and selling it the next day at 128 million VND results in a 3 million VND loss. Adding a 2 million VND tax would increase the total loss to 5 million VND per tael.

“This would shift investment behavior, encouraging investors to explore other business channels. As a result, capital would flow into production and business rather than gold hoarding, reducing demand and stabilizing prices,” Dr. Tú explained.

However, Dr. Tú suggests setting a tax threshold, proposing that only transactions of one tael or more should be taxed. Smaller sales, such as 1-2 tael, should be exempt.

Implementing the tax this year, rather than waiting for the Personal Income Tax Law revision, could help stabilize the gold market and ease year-end exchange rate pressures.