Under Vietnamese tax regulations, if:

• a company contributes land use right (LUR) to the charter capital of a company and receives shares or capital contribution in return (LUR-Originated Shares); and
• such company subsequently transfers the LUR-Originated Shares to a third party then the proceeds from the sale of LUR-Originated Shares may be treated as income from sale of real estate (instead of sale of securities) under the corporate income tax regulations. This may result in different tax implication and payment.

This requirement was introduced in 2012 under Circular 123/2012 of the Ministry of Finance and is now provided in Circular 151/2014 of the Ministry of Finance. Recently, Decree 43/2014 implementing the Land Law also confirms this requirement  by requiring a shareholder or member transferring shares or ownership interest in a company to specify the value of LUR-Originated Shares among the value of the transferring shares and pay tax accordingly.