7 Key Facts About Inheritance Tax in Vietnam Every Foreigner Should Know

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Understanding Inheritance Tax in Vietnam

Receiving an inheritance can be both a financial benefit and a legal responsibility, particularly when taxation is involved. If you are an expat, foreign investor, or overseas Vietnamese with assets or family in Vietnam, it is essential to understand how inheritance tax in Vietnam works to ensure a smooth transition of assets while complying with the country’s legal framework.

Why Is This Important?

Many assume that Vietnam has no inheritance tax or that the regulations are straightforward. However, certain inherited assets are subject to personal income tax (PIT). This means heirs may have tax obligations depending on the value of the assets, their residency status, and the type of inheritance.

This guide explains what inheritance tax is, who must pay it, when it applies, and how to handle inheritance in Vietnam properly.

What Is Inheritance Tax in Vietnam?

In Vietnam, inheritance is considered a form of taxable personal income under the Personal Income Tax Law. Unlike in some countries where inheritance tax is separate from income tax, Vietnam applies a 10% personal income tax (PIT) on taxable inherited assets.

Key Aspects of Inheritance Tax

The tax rate is 10% for taxable inheritance.
Inherited assets valued at VND 10 million (approximately $400) or less per transaction are exempt from taxation.
The tax applies to real estate, stocks, business shares, and cash.
Certain family members inheriting real estate are exempt from the tax (discussed in detail below).

Understanding these basics ensures that heirs in Vietnam and abroad can comply with tax laws while managing their assets effectively.

Who Needs to Pay Inheritance Tax in Vietnam?

Vietnamese Tax Residents

Vietnamese tax law classifies individuals as tax residents if they:

Spend 183 days or more in Vietnam within a 12-month period, or
Have a permanent residence or registered domicile in Vietnam.

Tax residents are subject to inheritance tax on all inherited assets, including those located abroad. This means a tax resident who inherits property, money, or investments outside of Vietnam may still have to report and pay taxes on it in Vietnam.

Non-Residents and Foreigners

Foreigners and non-residents in Vietnam—those who spend less than 183 days in Vietnam per year—are only taxed on assets inherited within Vietnam. If a foreigner inherits property, shares, or financial assets in Vietnam, they may be required to pay inheritance tax in Vietnam, but assets located outside of Vietnam are not taxed under Vietnamese law.

Who Is Exempt from Inheritance Tax?

According to the current laws, certain close family members are exempt from inheritance tax when they inherit real estate. These include:

Spouses
Parents and biological/adopted children
Parents-in-law and children-in-law
Grandparents and grandchildren
Siblings

It is important to note that this exemption only applies to real estate. If an individual inherits cash, stocks, or business shares, the 10% tax still applies, even if the transfer occurs between family members.

When Does Inheritance Tax Apply in Vietnam?

Inheritance tax is not immediately applied upon receiving an inheritance. Instead, it is determined when the heir registers ownership or usage rights for the inherited assets.

Different Types of Assets and Their Taxable Events

Real Estate (Land, Houses, Apartments)

Inheritance tax is assessed when the heir registers the property ownership at the local Land Registry Office. Verification of beneficiaries then will be important to determine eligibility of inheritance. Further, the tax is calculated based on the official land price table issued by the provincial authorities at the time of registration.

Securities (Stocks, Bonds, Other Financial Investments)

When an heir inherits securities, the taxable event occurs when they transfer ownership of the shares at a securities depository or trading platform. The value is based on the market price of the securities at the time of transfer.

Business Shares or Capital Contributions

If the inheritance involves business ownership, tax is assessed when the heir updates shareholder records in the company’s business registration. The valuation is determined based on the company’s financial records at the closest available date before registration.

Cash and Other Financial Assets

If an heir inherits cash or financial assets, the taxable event occurs when they formally accept the inheritance in Vietnam through legal documentation.

Where Does Inheritance Tax Apply in Vietnam?

Inheritance tax applies to all assets located within Vietnam, regardless of the heir’s nationality or residence.

For foreigners and non-residents, the tax does not apply to assets outside Vietnam. However, some countries have global taxation policies that require their citizens to report foreign inheritance. If you are a foreign investor or an overseas Vietnamese inheriting property in Vietnam, you may want to consult a tax professional and inheritance lawyers in Vietnam to ensure compliance with both Vietnamese and international tax regulations.

Why Does Vietnam Have Inheritance Tax?

Vietnam applies inheritance tax as part of its personal income tax system. The key reasons behind this policy include:

Ensuring Legal and Financial Transparency – Regulating asset transfers ensures that property ownership records remain clear and legally recognized.
Fair and Balanced Taxation – The 10% tax rate is designed to create a simple and consistent approach to inherited income.
National Revenue and Development – The tax contributes to public funds that support infrastructure, social programs, and economic development.

Vietnam’s 10% inheritance tax rate is relatively low compared to many other countries.

How to Handle Inheritance Tax in Vietnam Properly

For those inheriting assets in Vietnam, following the correct procedures ensures compliance and smooth asset transition.

Understand Your Tax Status

If you are a Vietnamese tax resident, you may need to report all inherited assets, including those located abroad. Non-residents only pay tax on Vietnam-based assets.

Register Inherited Assets Promptly

Since inheritance tax applies at the time of registration, heirs should complete the ownership transfer process without unnecessary delays.

Check If You Qualify for Exemptions

If you are inheriting real estate from a close family member, ensure that the tax exemption is properly documented to avoid unnecessary taxation.

Seek Professional Advice

For those handling complex inheritances, including business shares or foreign investments, consulting with a legal or financial professional can help streamline the process and ensure compliance with all applicable regulations.

What You Should Know About Inheritance Tax in Vietnam

For foreigners, expats, and overseas Vietnamese, understanding inheritance tax in Vietnam is important to ensure a legally compliant and smooth transfer of assets.

Key Takeaways

Vietnam does not have a separate inheritance tax, but a 10% personal income tax applies to certain inherited assets.
Real estate inherited from close family members is exempt from taxation.
Foreigners and non-residents only pay tax on Vietnam-based assets.
The tax obligation arises when the inherited asset is registered in the heir’s name.
Proper legal guidance can help heirs navigate the process efficiently.

For those with property or financial assets in Vietnam, staying informed about tax regulations ensures that inheritance matters are handled fairly and smoothly.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.