Evaluating the feasibility of taxing cryptocurrency assets in Vietnam

The prime minister also directed the MoF and the MoST to finalise relevant policies within the second quarter of 2025, and a sandbox for digital asset and cryptocurrency exchanges, expected to launch from mid-2026. This initiative is expected to help Vietnam seize opportunities, align with modern financial trends, and reduce tax losses and investor risks.

Despite legal and technical challenges, taxation of cryptoassets has become an urgent issue. It requires Vietnam to quickly establish a clear direction to ensure fairness in the tax system while maintaining an attractive investment environment and fostering technological innovation.

Cryptoassets have rapidly evolved since Bitcoin’s creation, posing regulatory challenges. Indeed, currently, the Vietnamese legal framework has no specific provisions defining cryptocurrencies as property, commodities, or securities which are specified in key legal regulations.

Moreover, the State Bank of Vietnam says cryptocurrency is not a legal means of payment. Nevertheless, the law does not prohibit ownership or investment in cryptocurrencies, provided they are not used for payment.

Thus, cryptoassets are presently in a legal grey zone in Vietnam – not banned, but also not legally recognised or protected as an asset, a type of money, commodities or securities in Vietnam. This may result in high risks for crypto-related transactions and difficulties in resolving disputes or handling violations related to cryptocurrencies.

Cryptoassets present a significant challenge to Vietnam’s legal and tax systems. One of the primary obstacles lies in the technological nature of these assets. Crypto transactions are decentralised, anonymous, and cross-border.

Users can easily transfer cryptocurrencies between digital wallets without going through banks or intermediaries. This may make it difficult for tax authorities to identify owners, transaction times, income sources, and even taxpayers’ nationalities, thereby undermining effective tax control and collection.

Another notable issue is the difficulty in valuing cryptoassets. Unlike traditional assets with stable markets and clear financial valuation standards, cryptoassets experience extremely high price volatility. The value of cryptocurrencies can fluctuate by the hour, minute, or even the second, driven by global market supply and demand.

For low-liquidity tokens or those traded on decentralised platforms, determining a fair market value is near impossible. This creates risks in establishing a tax base and may lead to incorrect declarations, tax evasion, or inequities among taxpayers.

Transactions often take place on international exchanges or unlicensed peer-to-peer platforms, making it impossible for tax authorities to monitor, record, or establish tax obligations accurately. Legal policies on cryptoassets vary significantly across countries, reflecting the diverse regulatory approaches and goals of different governments. Some countries are open to blockchain and crypto technologies, while others impose strict bans or limitations.

El Salvador became the first country in the world to accept Bitcoin as legal tender in 2021. Following its lead, nations such as Argentina, Colombia, and Brazil have also adopted a more positive stance towards integrating cryptoassets into their financial systems.

In contrast, China, once the dominant player in global cryptocurrency mining, has implemented aggressive policies by completely banning domestic financial institutions from engaging in crypto-related activities.

In the United States, cryptocurrencies are treated as property for tax purposes. Any profits made from selling, exchanging, or otherwise disposing of these assets are subject to taxation.

Germany is among the pioneers in building a crypto- and blockchain-friendly legal environment. With a technology-neutral approach, Germany regulates cryptoassets based on their use rather than their underlying technology. Crypto holders may be subject to wealth tax, and gains from transactions may be taxed as income, depending on the case.

Significant policy differences reflect that cryptoasset regulation is still evolving globally, without universal consensus. In this context, Vietnam’s close monitoring and study of model jurisdictions will provide a vital foundation for developing suitable domestic policies.

From a legal perspective, taxing cryptoassets in Vietnam is entirely feasible, but it requires a clear determination of the legal nature of such assets. If classified as regular property, income generated from cryptoasset transactions or investments could be subject to various taxes.

If cryptoassets are recognised as goods or services, transactions may also give rise to VAT obligations. However, VAT would only be appropriate once a clear legal designation exists treating cryptoassets as goods or services, which is not yet the case under the current Vietnamese law.

Regarding specific tax rates, Vietnam may consider tax levels already applied in according to Vietnamese law. For instance, personal income tax on crypto trading profits may be set at 10 per cent. For businesses involved in crypto-related activities, the corporate income tax could follow the standard rate of 20 per cent.

The government could adopt a cautious yet open approach, beginning with a low fixed-rate tax mechanism to encourage voluntary compliance. In parallel, a pilot tax regime could be implemented on a few centralised exchanges. Establishing a clear legal definition is also a prerequisite to ensure legal consistency.

As digital assets gain increasing prominence, many experts believe that exchange-traded funds could be the safest and most feasible approach.

New regulations surrounding the pilot of a digital asset exchange will help legitimise crypto assets, entice institutional involvement, and foster regional innovation, opening up a new stream of investment to Vietnam.