What are regulations on deduction of taxable income from securities transfers in Vietnam?

What are regulations on deduction of taxable income from securities transfers in Vietnam?

According to the provisions at Point dd Clause 1 Article 25 of Circular 111/2013/TT-BTC, the deduction of taxable income from securities transfers is regulated as follows:

In all cases of securities transfers, tax must be deducted at a rate of 0.1% of the transfer price before payment is made to the transferor.

Specifically, tax deduction is performed as follows:

(1) For securities traded on the Stock Exchange:

- The securities company or commercial bank where the individual opens a securities depository account is responsible for withholding personal income tax at a rate of 0.1% of the transfer price before paying the individual. The deducted tax amount is determined as guided at Point b.2, Clause 2, Article 11 of Circular 111/2013/TT-BTC.

- The fund management company where the individual entrusts the securities investment portfolio management is responsible for withholding personal income tax at a rate of 0.1% of the securities transfer price of the individual entrusting the securities investment portfolio according to the allocation table of the company sent to the custodian bank where the company opens the depository account.

(2) For securities transferred not through the trading system on the Stock Exchange:

- For public company securities that have centralized securities registration at the Securities Depository Center:

The securities company or commercial bank where the individual opens a securities depository account withholds personal income tax at a rate of 0.1% of the transfer price before completing the securities ownership transfer procedures at the Securities Depository Center.

- For securities of joint-stock companies that are not public companies but the securities issuing organization authorizes a securities company to manage the shareholder list:

The securities company authorized to manage the shareholder list withholds personal income tax at a rate of 0.1% of the transfer price before completing the securities ownership transfer procedures.

Individuals transferring securities must present the transfer contract to the Securities Company when completing the securities ownership transfer procedures.

Additionally, organizations and individuals paying the deducted taxable income according to the above guidance must issue tax withholding certificates upon the request of the deducted individuals. In case the individual authorizes tax finalization, the withholding certificate is not issued.

What are regulations on deduction of taxable income from securities transfers in Vietnam? (Image from the Internet)

What are the types of income from securities transfers in Vietnam?

According to Clause 4 Article 2 of Circular 111/2013/TT-BTC, amended by Article 4 of Circular 25/2018/TT-BTC, the regulations are as follows:

Income from capital transfers

Income from capital transfers is the income an individual receives, including:

a) Income from the transfer of capital contributions in limited liability companies (including single-member limited liability companies), partnerships, business cooperation contracts, cooperatives, people's credit funds, economic organizations, and other organizations.

b) Income from securities transfers, including: income from the transfer of shares, share purchase rights, bonds, promissory notes, fund certificates, and other securities types as stipulated in Clause 1 Article 6 of the Securities Law. Income from the transfer of shares of individuals in joint-stock companies pursuant to Clause 2 Article 6 of the Securities Law and Article 120 of the Enterprise Law.

c) Income from capital transfers in other forms.

Income from the transfer of shares, share purchase rights, bonds, promissory notes, fund certificates, share purchase rights, warrants, call options, put options, futures contracts, groups of securities or securities indexes, capital contribution contracts, and other securities types as prescribed by the Ministry of Finance is considered income from securities transfers.

How to calculate the transfer price of securities when calculating taxable income from securities transfers in Vietnam?

According to Article 11 of Circular 111/2013/TT-BTC, amended by Article 16 of Circular 92/2015/TT-BTC, the taxable income from securities transfers is determined as the transfer price of securities each time.

The transfer price of securities is determined as follows:

- For public company securities traded on the Stock Exchange, the transfer price of securities is the execution price on the Stock Exchange.

The execution price is the price of the securities determined from the results of order matching or the price formed from agreement transactions on the Stock Exchange.

- For securities not mentioned above, the transfer price is the price stated in the transfer contract or the actual transfer price or the book value of the unit holding the transferred securities at the time of the closest financial report according to the accounting laws before the transfer time.