How many times of securities transfer in a years is subject to tax deduction in Vietnam?

How many times of securities transfer in a years is subject to tax deduction in Vietnam?

Based on point đ, clause 1, Article 25 of Circular 111/2013/TT-BTC, it is regulated as follows:

Tax Deduction and Tax Deduction Certificates

1. Tax Deduction

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đ) Income from transferring securities

In all cases of securities transfer, tax must be deducted at 0.1% tax rate on the transfer price before payment to the transferor. Specifically, tax deduction is carried out as follows:

đ.1) For securities traded on the Stock Exchange:

đ.1.1) Securities companies and commercial banks where individuals open their securities custodial accounts are responsible for withholding personal income tax at a 0.1% tax rate on the transfer price before paying the individuals. The withheld tax amount is determined as guided at point b.2, clause 2, Article 11 of this Circular.

đ.1.2) Fund management companies where individuals entrust the management of their securities portfolios are responsible for withholding personal income tax at a 0.1% tax rate on the securities transfer price of individuals who entrust their investment portfolios according to the allocation table of the company sent to the custodian bank where the company opens custodial accounts.

đ.2) For securities transferred outside the Stock Exchange trading system:

đ.2.1) For securities of public companies that have registered centralized securities at the Securities Depository Center:

Securities companies and commercial banks where individuals open their securities custodial accounts must withhold personal income tax at a 0.1% tax rate on the transfer price before processing the securities ownership transfer at the Securities Depository Center.

đ.2.2) For securities of joint-stock companies that are not public companies but are authorized by the issuer to have the securities company manage the shareholder list:

Authorized securities companies managing the shareholder list shall withhold personal income tax at a 0.1% tax rate on the transfer price before handling the securities ownership transfer procedures.

Individuals transferring securities must present the transfer contract with the securities company when carrying out the securities ownership transfer procedures.

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Thus, according to the above regulation, all cases of securities transfer require tax deduction at a 0.1% tax rate on the transfer price before payment to the transferor. The number of transactions is irrelevant; instead, tax must be withheld upon transfer.

How many times of securities transfer in a years is subject to tax deduction in Vietnam? (Image from Internet)

Shall income payers issue tax deduction certificate to individuals within two months after tax deduction in Vietnam?

Based on point a, clause 2, Article 25 of Circular 111/2013/TT-BTC, it is regulated as follows:

Tax Deduction and Tax Deduction Certificates

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2. Tax Deduction Certificates

a) Organizations and individuals paying the income that has been deducted as instructed in clause 1 of this Article must issue tax deduction certificates upon the request of the individual subject to deduction. If the individual authorizes tax finalization, no deduction certificate will be issued.

b) Issuing tax deduction certificates in some specific cases as follows:

b.1) For individuals who do not sign a labor contract or sign labor contracts of less than three (03) months: individuals have the right to request the income-paying organizations or individuals to issue deduction certificates for each deduction or a single certificate for multiple deductions in a tax period.

Example 15: Mr. Q signed a service contract with Company X to take care of the landscaping at the Company’s premises once a month from September 2013 to April 2014. Mr. Q’s income is paid monthly with an amount of 3 million VND by the Company. In this case, Mr. Q can request the Company to issue a deduction certificate per month or a certificate reflecting the tax deducted from September to December 2013, and another certificate for January to April 2014.

b.2) For individuals with labor contracts of three (03) months or more: organizations, and individuals paying income only issue an individual a deduction certificate for a tax period.

Example 16: Mr. R entered into a long-term labor contract (from September 2013 to the end of August 2014) with Company Y. In this case, if Mr. R is required to finalize taxes directly with the tax authority and requests the Company to issue a deduction certificate, the Company will issue 01 certificate reflecting the tax deducted from September to December 2013 and 01 certificate for January to August 2014.

According to the above regulation, organizations and individuals paying deducted income must issue a tax deduction certificate upon the request of the individual subject to deduction.

There is no specific regulation requiring issuance after two months. In other words, regarding responsibility, the timing for issuing the personal income tax deduction certificate is when the individual is subject to such deduction.

When is the personal income tax deduction certificate issued in Vietnam?

Pursuant to Article 31 of Decree 123/2020/ND-CP, the personal income tax deduction certificate must be issued at the time the organization or individual paying the income carries out the tax deduction.

Moreover, the personal income tax deduction certificate must be delivered to the individual whose income has been subjected to tax deduction.

The moment for issuing the personal income tax deduction certificate is when the individual requests it from the income-paying organization or individual.

Previously, the personal income tax deduction certificate issued to individuals could be a paper form or an electronic form containing all legally required content. However, now all businesses, organizations, and individuals must use electronic personal income tax deduction certificates.