Capital Gains Tax Treatment in ASEAN Stock Markets
Most ASEAN countries either exempt capital gains on stock market investments or levy only minimal transaction taxes instead of a traditional capital gains tax. For example, Singapore and Malaysia do not impose capital gains tax on shares – profits from selling stocks are generally not taxable in those jurisdictions. Thailand normally treats capital gains as ordinary income, but it specifically exempts gains from sales of stocks listed on the Stock Exchange of Thailand (SET) when the sale is made on the exchange. Likewise, Thai law exempts gains from investment fund units and certain debentures.
Several other ASEAN markets use flat transaction levies in lieu of taxing net capital gains:
✓ Indonesia: A final 0.1% tax on the gross sale value of shares listed on the Indonesia Stock Exchange is charged on each transaction (this applies to both resident and non-resident investors). This flat levy on sale proceeds serves as Indonesia’s effective tax on stock trading gains.
✓ Philippines: A Stock Transaction Tax (STT) of 0.6% of the gross selling price is imposed on every sale of shares listed on the Philippine Stock Exchange. This percentage tax (raised from 0.5% to 0.6% in 2018 under the TRAIN law) is collected in lieu of a capital gains tax on listed securities.
✓ Vietnam: Gains from trading publicly listed shares are taxed via a 0.1% tax on the gross proceeds of the sale (for individuals, this 0.1% PIT applies regardless of profit or loss). This means any sale of Vietnam-listed stock incurs a 0.1% transaction tax, instead of a standard net capital gains calculation.
Other ASEAN exchanges generally follow similar patterns. Brunei has no personal income tax (hence no capital gains tax on stocks), while Cambodia, Laos, and Myanmar treat capital gains as ordinary income in principle, though their small equity markets mean such taxes have limited scope. In summary, cross-border investors in ASEAN often face no capital gains tax or only a small fixed trading tax when buying and selling listed securities, depending on the market.
The ASEAN Trading Link and Cross-Border Tax Incentives
To promote cross-border investment within the region, ASEAN launched the ASEAN Trading Link in 2012, connecting the stock exchanges of Malaysia (Bursa Malaysia), Singapore (SGX), and Thailand (SET). One key issue addressed during this integration was the tax treatment of cross-border trades. Regulators aimed to ensure that investors trading foreign ASEAN stocks would not be penalized by additional taxes. Accordingly, Thailand introduced a capital gains tax exemption for securities listed on other ASEAN exchanges when traded via the SET through the ASEAN Link. A Thai Finance Ministry regulation issued in 2012 waived Thai capital-gains tax on profits from selling ASEAN-listed shares through the Thai exchange platform, in order to “facilitate the ASEAN linkage initiative”.
Under this scheme, Thai and foreign individual investors paid no Thai tax on capital gains from cross-border stock trades executed via the Link, achieving neutral tax treatment across ASEAN markets. (Thai and foreign corporate investors with a business presence in Thailand would include such gains in their normal corporate tax base, but no separate withholding applied, while foreign investors without a Thai business were subject only to Thailand’s standard 15% withholding on capital gains if applicable.) Singapore and Malaysia did not need to enact new exemptions for the Link because, as noted, those countries already do not tax capital gains on stock investments. The net result was that an investor using the ASEAN Trading Link would generally not incur capital gains taxes when trading equities across the participating exchanges, removing a key barrier to cross-border portfolio investment. These tax incentives, along with expected lower transaction costs, were intended to encourage a fluid, integrated ASEAN equity market.
Discontinuation of the Trading Link and Current Applicability
Despite the policy support, the ASEAN Trading Link struggled to gain traction. Usage remained low, and by October 2017 the participating bourses quietly decommissioned the ASEAN Trading Link due to lackluster trading volumes and various operational challenges. With the Link’s discontinuation, the question arises: Do the special capital gains tax exemptions still apply to cross-border trades?
In Thailand’s case, the capital gains exemption for ASEAN-listed securities is still formally part of Thai tax law (it remains listed among the personal income tax exemptions). However, the law specifically requires that the shares be “traded through the ASEAN Link”. Since the Link platform is no longer in operation, this particular exemption has little practical effect today – investors can no longer buy foreign ASEAN stocks via the SET trading link, and thus cannot technically meet the condition for tax-free treatment under that provision. In other words, the Thai tax exemption exists on paper but is essentially dormant given the Link’s demise. Thai investors can still trade ASEAN stocks through other avenues (e.g. by opening accounts with foreign brokers or using local brokers’ cross-border services), but those transactions are not covered by the ASEAN Link clause. Instead, their tax treatment defaults to general rules: for Thai individuals, foreign-source investment income (including capital gains from overseas stock sales) is not taxable in Thailand unless remitted into Thailand in the same tax year. This means in practice a Thai individual can still realize gains from, say, selling shares on SGX or Bursa Malaysia without incurring Thai tax, as long as the funds are kept offshore until the following year. Likewise, a Singaporean or Malaysian investing in Thai stocks would continue to enjoy tax-free capital gains in Thailand because Thailand does not tax individuals’ gains from SET-listed shares (and for non-resident investors, Thailand had already waived capital gains tax on exchange trades). In short, even after the Link’s end, most cross-border stock investments within ASEAN remain free of capital gains tax by virtue of each country’s domestic laws, rather than a special regional mechanism.
It’s important to note that investors trading in ASEAN markets now rely on local brokers and standard cross-border trading channels, so any tax on gains is determined by the domestic tax regimes (and any applicable tax treaties) of the countries involved. Since Singapore and Malaysia levy no capital gains tax on stock trades, an investor from one of these countries buying shares in the other faces no tax on sale profits in either home or host jurisdiction. Where markets like Indonesia, Vietnam, or the Philippines impose transaction taxes on stock sales, those taxes apply equally to local and foreign investors and continue to be payable even on cross-border trades. For example, a Thai investor selling Indonesian shares will incur Indonesia’s 0.1% final tax on the sale proceeds, and a Singaporean selling Philippine stocks will pay the 0.6% Philippine STT at the time of sale. These are low, flat taxes, and there are generally no additional capital gains taxes beyond those at the source. The intended ASEAN Link tax exemptions thus largely overlap with existing domestic policies, and the Link’s removal did not introduce new taxation on cross-border investments – it mostly eliminated a convenient unified trading access.
Recent Tax Developments Affecting Stock Trading Gains
Several ASEAN countries have updated their tax policies in recent years in ways that affect securities trading, although not all are directly tied to cross-border initiatives:
✓ Thailand: In 2022, Thailand’s government approved the end of a decades-long tax waiver on financial transactions, paving the way to impose a small Financial Transaction Tax (FTT) on stock sales. Effective 2023, sales of shares on the SET by investors will be subject to a 0.1% specific business tax plus a local levy (combined effective rate 0.11% on the sale proceeds). The tax is being introduced in stages (0.055% in the first year, rising to 0.11% later). Notably, this FTT is separate from income tax – it does not revoke the capital gains tax exemption for Thai-listed shares, but it means that selling Thai securities is no longer entirely tax-free. Even with this transaction tax, capital gains from Thai stocks remain exempt from personal income tax; the 0.1% is simply a trading levy akin to those in other ASEAN markets. Thai authorities implemented the FTT to increase tax fairness and revenue, after decades of forgoing any tax on stock trades. Cross-border investors in Thai stocks will also be subject to this FTT when selling on the SET, just as local investors are (certain market makers and funds are exempted to maintain market liquidity).
✓ Malaysia: Malaysia continues to exempt capital gains on listed shares – there is no capital gains tax on stock market transactions on Bursa Malaysia. However, a significant update is that Malaysia plans to introduce a capital gains tax on disposals of unlisted shares (e.g. shares in private companies) starting in 2024. The proposed regime would tax gains from unlisted share sales at 10% (with an option to pay 2% of gross proceeds as an alternative). Importantly, this new tax does not apply to publicly traded stocks, so gains from trading equities listed on ASEAN exchanges remain fully exempt in Malaysia. The move is part of Malaysia’s broader tax base expansion, but the government has been careful to exclude marketable securities to keep the capital market attractive. Thus, a foreign investor selling Malaysian listed shares, or a Malaysian selling ASEAN shares, still incurs no CGT on those transactions under Malaysian law.
✓ Singapore: Singapore has maintained its stance of no capital gains tax. Profits from the sale of stocks (whether domestic or foreign) are not taxable in Singapore as long as they are capital in nature. There have been no recent changes to this principle. (Singapore did announce a 2024 plan to tax certain property gains as income if properties are sold within a short period, but this does not affect stock investments.) For investors, this means Singapore remains a tax-friendly base for trading ASEAN securities – any gains realized by Singaporean investors at home or abroad are generally tax-free, and similarly, foreign investors do not face Singapore taxes on capital gains from SGX trades.
✓ Philippines: Aside from the 2018 increase of the Stock Transaction Tax to 0.6%, the Philippines has been considering reforms to boost its capital market. One proposal under the Capital Market Efficiency Promotion Act (CMEPA) is to gradually reduce the stock transaction tax from 0.6% to 0.1% of the selling price. The rationale is to lower trading costs and align the Philippines with its ASEAN peers (who have lower or no trading taxes) to attract more investors. As of 2025, this reduction has not yet been implemented; the STT remains 0.6%. If enacted, it would significantly cut the tax on trading Philippine shares, making cross-border investment in Philippine stocks more attractive by reducing the tax drag on turnover. Notably, even at 0.6%, the Philippine tax on stock trades is a final tax and the only tax on those gains – there is no additional 15% capital gains tax on listed stock sales (that 15% applies only to sales of non-listed shares or other capital assets). So, foreign ASEAN investors trading on the PSE currently pay 0.6% per sale, and this could drop in the future if the reform passes.
✓ Indonesia & Vietnam: These countries have not announced new exemptions or changes specifically for ASEAN cross-border trading, but they continue to refine their tax laws. Indonesia’s corporate tax rate has decreased in recent years (now 22%), yet the 0.1% final tax on stock sales remains in place. Vietnam’s tax system still applies the 0.1% tax on securities transactions and a 20% tax on net gains from private business share transfers. Both systems ensure that, for public market trades, capital gains are effectively taxed at a low flat rate, which is already built into trading. There have been no moves to eliminate these trading taxes for ASEAN investors – they are standard for all traders, domestic or foreign. If anything, these are seen as minor and not deterring investment significantly, but any ASEAN investor should be aware that trading on IDX or HOSE/HNX comes with a small inherent tax on each sale.
In summary, capital gains tax exemptions for ASEAN-listed securities largely still hold true across the region, either through explicit exemptions or the absence of a CGT regime. The discontinuation of the ASEAN Trading Link in 2017 did not introduce new taxes on cross-border stock investing; it mainly meant that investors lost a unified platform and the specific Thai tax clause tied to that platform became unusable. Nonetheless, investors trading across ASEAN exchanges today generally enjoy the same tax-free (or very low-tax) treatment on capital gains as before. Singapore and Malaysia impose no capital gains tax on stock trades, Thailand exempts gains on market trades (with the ASEAN Link clause now largely academic), and Indonesia, Vietnam, and the Philippines only levy modest transaction taxes on sales. Recent tax updates in the region have introduced small transaction levies (Thailand) or targeted taxes on unlisted assets (Malaysia), but none have removed the capital gains tax exemptions for publicly traded securities. Thus, cross-border trading of ASEAN-listed stocks remains tax-efficient, continuing to benefit from the long-standing policy of capital gains tax neutrality in ASEAN capital markets.