To increase transparency and limit gold speculation, the government has mandated that the personal income tax (PIT) law must clearly classify income from gold trading as taxable. This raises the question: what is the most appropriate taxation method and rate?

The government’s proposal to subject gold trading income to PIT is considered a necessary step to bring transparency to the market, curb speculation, and create fairness among investment channels, according to economist Ngo Tri Long.

Long emphasized the need to clearly differentiate between "consumer gold" and "investment gold."

Jewelry and decorative gold are consumer goods and should continue to be subject to value-added tax (VAT) as currently applied. 

Small-scale transactions by consumers should not be taxed for income unless they are engaged in regular business activities. In contrast, gold bars and bullion are considered investment assets, and income from their transfer should be subject to PIT in line with the revised PIT law.

Nguyen Ngoc Tu, a lecturer at the Hanoi University of Business and Technology, noted that core tax laws already stipulate that any organization or individual earning income from trading goods must pay taxes. 

Therefore, it is essential to clarify the applicable tax rate, the collection method, the responsible authority, and whether the tax will be withheld at source or self-declared.

“Taxing income from gold trading will reduce speculative and short-term trading behavior,” Tu said.

On the other hand, Le Xuan Nghia, former vice chair of the National Financial Supervisory Commission, told VietNamNet that he opposes taxing gold trading income. He argues that authorities need to carefully consider whether tax revenue would even offset the cost of tax administration.

“Supply shortage is the root cause of speculation,” Nghia emphasized.

The expert believes that there are several ways to stabilize the gold market and curb speculation rather than taxing. The simplest solution is to allow businesses and commercial banks to import gold and establish a transparent wholesale gold trading exchange benchmarked to global prices. Buyers at the exchange would sell retail to the market, thus reducing speculation.

Three proposed approaches

Ngo Tri Long, a respected pricing expert, notes that taxing gold transactions is a new issue in Vietnam. He proposes three technical approaches for consideration.

Option 1: Taxing based on transaction value (similar to securities)

A withholding tax of 0.1-0.2 percent is applied to the sale price each time. The point of sale (e.g., organizations) withholds and submits the tax on behalf of the seller.

Long states this approach is simple, effective in preventing tax evasion, and incurs near-zero compliance costs for individuals. However, it does not account for net profit or loss; sellers who incur losses still pay tax, as with current securities taxation. This option is prioritized for rapid, widespread implementation when simplicity is needed.

Option 2: Taxing on annual net profit

Taxable income = sale price - (purchase price + reasonable costs), determined using the first-in, first-out (FIFO) method. The recommended tax rate is 10-20 percent on annual net income, with a provisional 0.05-0.1 percent tax withheld at sale to discourage tax avoidance during final settlement.

This approach is economically fair, as it only taxes profits and reflects true investment performance. However, it requires proof of purchase costs and interconnected data infrastructure, increasing the settlement burden for frequent traders. It suits professional investors who maintain records and are prepared for tax settlements.

Option 3: Dual option

By default, apply the fixed rate of 0.1 percent as in Option 1. However, taxpayers may voluntarily opt into the annual net income model (option 2) with a 10 percent tax rate, provided they have sufficient documentation. Previously paid fixed tax would be deductible from the final amount.

This maintains simplicity for most small transactions while ensuring fairness for professional investors. The model builds on recent improvements in securities taxation.

Authorities should also enhance public communication, making it clear that the tax will not apply to wedding gold or jewelry for personal use, and that only income from gold bullion investment is taxable. Furthermore, there is no double taxation: gold bullion is exempt from VAT, and personal income tax is levied only on profit, not on the value of the gold itself.

Nguyen Le