What are regulations on declaring tax on incomes from transferring securities in Vietnam?

What are regulations on declaring tax on incomes from transferring securities in Vietnam?

According to Clause 5, Article 26 of Circular 111/2013/TT-BTC, the principles of tax declaration for individuals incomes from transferring securities are as follows:

- Individuals transferring securities of public companies traded on the Stock Exchange do not have to declare directly to the tax authority. Instead, the securities companies, commercial banks where individuals open depository accounts, and fund management companies where individuals entrust portfolio management declare taxes according to the guidelines in Clause 1, Article 26 of Circular 111/2013/TT-BTC.

- Individuals transferring securities not via the trading system on the Stock Exchange:

+ Individuals transferring securities of public companies registered for centralized depository at the Securities Depository Center do not have to declare directly to the tax authority. Instead, the securities companies, commercial banks where individuals open depository accounts deduct tax and declare taxes according to the guidelines in Clause 1, Article 26 of Circular 111/2013/TT-BTC.

+ Individuals transferring securities of joint-stock companies that are not public companies but the issuing organizations authorize a securities company to manage the shareholder list do not have to declare directly to the tax authority. Instead, the authorized securities company managing the shareholder list deducts tax and declares taxes according to the guidelines in Clause 1, Article 26 of Circular 111/2013/TT-BTC.

- Individuals transferring securities not falling under the cases mentioned in points a and b, Clause 5, Article 26 of Circular 111/2013/TT-BTC must declare taxes each time income arises.

- Enterprises conducting procedures to change the shareholder list in cases of securities transfer without proof that individuals transferring securities have completed their tax obligations must declare taxes and pay taxes on behalf of the individuals.

In cases where enterprises declare taxes on behalf of individuals transferring securities, they must substitute the tax declaration dossiers for personal income tax.

The enterprises declaring on behalf must add "On behalf of" before the phrase "Taxpayer or Legal Representative of Taxpayer" and the person declaring must sign, state full name, and stamp the company's seal. On the tax calculation documents and tax payment receipts, the rightful taxpayer must still be shown as the individual transferring the securities.

- At the end of the year, if individuals transferring securities require tax finalization, they must finalize taxes directly with the tax authority.

What are regulations on declaring tax on incomes from transferring securities in Vietnam? (Image from the Internet)

What is the VAT period for incomes from transferring securities?

According to Article 7 of the Personal Income Tax Law 2007 amended by Clause 3, Article 1 of the Amendment Law on Personal Income Tax 2012, the tax period is regulated as follows:

Tax period

1. The tax period for resident individuals is regulated as follows:

a) The annual tax period applies to income from business activities; income from salaries, wages;

b) The tax period by each income occurrence applies to incomes from capital investment; income from capital transfer, except for income from securities transfer; income from real estate transfer; income from winnings; income from copyrights; income from franchising; income from inheritance; income from gifts;

c) The tax period by each transfer or annually for income from securities transfer.

2. The tax period for non-resident individuals is calculated by each income occurrence applying to all taxable income.

Thus, the tax period for individuals incomes from transferring securities is as follows:

- For resident individuals: The tax period can be by each transfer or annually for income from securities transfer.

- For non-resident individuals: The tax period is calculated by each income occurrence from securities transfer.

What is the personal income tax rate for securities transfer in Vietnam?

According to Article 23 of the Personal Income Tax Law 2007 amended by Clause 7, Article 2 of the Amendment Law on Tax Laws 2014, the comprehensive tax rate schedule is regulated as follows:

Thus, the personal income tax rate for securities transfer is applied according to the comprehensive tax rate schedule with a tax rate of 0.1%.