In-kind capital contributions and intra-group asset transfers in Vietnam: tax obligations and structuring
The short answer
Contributing assets as capital to a company:
The contributor need not issue an invoice or declare and pay VAT, provided the contribution documents meet the requirements.
Transfer of title to contributed assets is exempt from registration fees under the Law on Enterprises.
Where the contributor is a company and the asset is valued above its net book value, the difference is other income subject to CIT in that period.
Intra-group asset transfers:
Between dependent units of the same company: a transfer order is enough, with no invoice.
Between separate legal entities in the same group (parent and subsidiary): this is a sale. It must be invoiced, declared for tax and priced at market value, because it is a related-party transaction.
Why does this matter more and more?
Group restructurings, project companies, fundraising and M&A often begin with "putting the assets in the right place": machinery into the manufacturing company, land into the project company, brands into the holding company. Each route has different tax consequences.
The tax authority is paying increasing attention to these transactions. They are usually high in value, involve related parties, and can easily be used to shift profits or inflate capital.
The legal side: what the Law on Enterprises requires
Valuation of contributed assets. Assets contributed other than cash, gold or foreign currency must be valued. Valuation may be agreed by the members or founding shareholders, or carried out by a valuation firm. If an asset is overvalued, those involved in the valuation are jointly liable to contribute the shortfall and for resulting damage.
Transfer of title. For assets with registered ownership, such as real estate, vehicles and intellectual property, the contributor must transfer title to the company. For unregistered assets, the contribution is made by a handover record. The contribution is only complete once legal title has passed to the company.
Contribution period. On incorporation, capital must be contributed within 90 days, excluding time for transporting and importing contributed assets and for administrative procedures to transfer title.
The tax side: quick reference
Transaction | Invoice and VAT | CIT | Notes |
A company contributes assets as capital to another company | No invoice and no VAT declaration if properly documented | The difference between appraised value and net book value is other income (gain) or a reduction of other income (loss) for the contributor | The recipient records the asset and depreciates it at the appraised value |
An individual contributes assets as capital | No VAT for a non-business individual | Not applicable | PIT obligations should be checked against the 2025 PIT Law and implementing guidance |
Transfer between dependent units | Transfer order with provenance documents, no invoice | No income arises | Transferred at book value |
Transfer on division, separation, consolidation, merger or conversion | No invoice if properly documented | According to the reorganisation plan | Legal documentation of the reorganisation is required |
Sale of assets between entities in the same group | Invoice and declare VAT as a sale | Income from disposal of assets | Related-party transaction: must be at market value and declared under Decree No. 255/2026/ND-CP |
Transfer of brands or IP to an overseas holding company | Transfers of IP rights are not subject to VAT where conditions are met | Income from transfer of intangible assets | High transfer pricing risk. Royalties paid back later will be scrutinised |
The valuation dilemma: high or low, both have a price
When a company contributes assets to a subsidiary, the appraised value is the central decision:
High valuation: the subsidiary has larger charter capital and higher future depreciation. But the contributor pays CIT immediately on the revaluation gain.
Valuation close to book value: no immediate tax. But if it is significantly below market value, the tax authority may adjust it under the arm's length principle, because this is a transfer of assets between related parties. The subsidiary's depreciation will also be lower.
There is no universal "optimal" figure. Businesses need to weigh:
the remaining depreciation period;
the loss position and tax incentives of each entity;
plans for fundraising or exit;
whether the valuation file is persuasive.
Five common mistakes
"Cosmetic" valuations to boost charter capital without basis. The result is a large immediate tax bill and joint liability for members if the asset is overvalued.
Missing contribution documents: valuation minutes, handover records, provenance documents. Without them, the transaction may be treated as a sale requiring an invoice and VAT.
Confusing internal transfers with transactions between legal entities. A parent "transfers" machinery to its subsidiary by a transfer order with no invoice. This is wrong, because they are two separate legal entities.
Delays in transferring title, so the contribution is not treated as complete and the contribution deadline becomes an issue.
Ignoring related-party rules when selling, leasing or lending assets within the group. Under Decree No. 255/2026/ND-CP, related-party transactions include sales, leases, loans and transfers of tangible and intangible assets.
Illustrative case
Parent Company U sets up a subsidiary to manufacture components. U contributes a production line with a net book value of VND 20 billion. A valuation firm puts its market value at about VND 32 billion.
Option | Immediate CIT at U | Impact on the subsidiary |
Contribute at VND 32 billion | The VND 12 billion difference is other income. CIT of about VND 2.4 billion (20% rate) | Depreciation on a VND 32 billion base |
Contribute at VND 20 billion | No revaluation income | Depreciation on a VND 20 billion base. Risk of adjustment because the value is below market |
U has large accumulated losses that can be offset, while the subsidiary is expected to become profitable quickly. The market-value option was therefore chosen: the VND 12 billion gain at U is absorbed by losses, and the subsidiary benefits from higher depreciation. Result: a lower overall tax burden for the group, and a valuation file that will stand up to audit.
FAQs
Must an invoice be issued for an in-kind capital contribution?
No, if the contribution documents meet the requirements. The contributor need not declare or pay VAT on the contributed assets.
Is a revaluation gain on contributed assets subject to CIT?
Yes. Where the contributor is a company, a gain is other income subject to CIT in that period. A loss reduces other income.
Must a parent invoice machinery transferred to a subsidiary?
Yes, if it is a sale or transfer between two separate legal entities. The transaction must be at market value because it is a related-party transaction. Only transfers between dependent units of the same company use a transfer order without an invoice.
Is a registration fee payable on transferring title to contributed assets?
No. Under the Law on Enterprises, transfers of title to contributed assets are exempt from registration fees.
Legal basis
Law on Enterprises 2020 (as amended in 2025): provisions on contributed assets, transfer of title and valuation.
VAT Law No. 48/2024/QH15 and Decree No. 181/2025/ND-CP (cases in which VAT need not be declared or paid).
CIT Law No. 67/2025/QH15 and Decree No. 320/2025/ND-CP.
Decree No. 255/2026/ND-CP on tax administration of related-party transactions.
PIT Law 2025 and implementing guidance.
How W&A can help
Putting assets into the right entity, at the right time and at the right value is the foundation of every restructuring. W&A combines corporate law, tax and valuation capabilities to support:
Designing contribution and transfer structures: comparing options by their tax impact across the group.
Valuation of contributed assets, intangibles and intellectual property, with robust supporting reasoning.
Legal documentation for contributions and title transfers: valuation minutes, handover records and registration procedures.
Related-party review of sales, leases and loans of assets within the group.
End-to-end group restructuring: divisions, separations, mergers and domestic or international holding structures.
Comments