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

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

Based on point b, clause 2, Article 11 of Circular 111/2013/TT-BTC (amended by Article 16 of Circular 92/2015/TT-BTC):

Basis for tax calculation on income from capital transfer

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2. For income from securities transfer

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b) Tax rate and tax calculation method:

Individuals transferring securities are subject to tax at a rate of 0.1% on the securities transfer price per transaction.

Tax calculation method:

The payable personal income tax = Securities transfer price per transaction x Tax rate of 0.1%

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Thus, the personal income tax rate from securities transfer is 0.1% of the securities transfer price per transaction.

What is the personal income tax rate from securities transfer in Vietnam? (Image from the Internet)

How to determine the taxable income from securities transfer subject to persoanl income tax in Vietnam?

Based on point a, clause 2, Article 11 of Circular 111/2013/TT-BTC (amended by Article 16 of Circular 92/2015/TT-BTC), the taxable income from securities transfer subject to persoanl income tax is determined as the securities transfer price per transaction.

The securities transfer price is determined as follows:

- For securities of public companies traded on the Stock Exchange, the transfer price is the execution price at the Stock Exchange. The execution price is the securities price determined from the matching results or the price formed from the agreed transactions at the Stock Exchange.

- For other securities, the transfer price is the price recorded in the transfer contract or the actual transfer price or the book value of the transferable securities according to the latest financial reporting period in accordance with accounting laws before the transfer.

How to declare personal income tax for individuals with income from securities transfer in Vietnam?

Based on clause 5, Article 26 of Circular 111/2013/TT-BTC, the declaration of personal income tax for individuals earning income from securities transfer is as follows:

- Individuals transferring securities of public companies traded on the Stock Exchange do not need to declare directly with the tax authority. Instead, the Securities Company, Commercial Bank where the individual opens the deposit account, or the Fund Management Company where the individual authorizes the management of the investment portfolio will declare tax according to the guidelines in clause 1, Article 26 of Circular 111/2013/TT-BTC.

- Individuals transferring securities not through the Stock Exchange system:

+ Individuals transferring securities of public companies that have registered centralized securities at the Securities Depository Center do not need to declare directly with the tax authority. Instead, the Securities Company or Commercial Bank where the individual opens the deposit account will deduct and declare the tax 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 yet public companies but the issuing organization authorizes a Securities Company to manage the shareholder list do not need to declare directly with the tax authority. Instead, the authorized Securities Company will deduct and declare the tax according to the guidelines in clause 1, Article 26 of Circular 111/2013/TT-BTC.

- Individuals transferring securities not belonging to the cases mentioned in points a and b, clause 5, Article 26 of Circular 111/2013/TT-BTC will declare tax for each arising transaction.

- Enterprises processing the procedure of changing the shareholder list in case of securities transfer without evidence proving that the individual transferring securities has fulfilled the tax obligations must declare and pay tax on behalf of the individual.

In cases where the enterprise where the individual transfers securities declares tax on behalf of the individual, the enterprise will make a tax declaration dossier on behalf of the individual.

The enterprise declaring on behalf will note "Declared on behalf" in the section before the phrase "Taxpayer or Legal Representative of the Taxpayer" and the declarant will sign, clearly state their full name, and affix the enterprise's stamp. The tax calculation documents and tax collection receipts must still indicate the taxpayer as the individual transferring securities.

- At the end of the year, if the individual transferring securities requests for tax finalization, they will declare the tax finalization directly with the tax authority.

What are regulations on personal income tax deduction from securities transfer in Vietnam?

Based on point e, clause 1, Article 25 of Circular 111/2013/TT-BTC, all cases of securities transfer must deduct personal income tax at a rate of 0.1% of the transfer price before payment to the transferor.

Tax deduction is implemented as follows:

- For securities traded on the Stock Exchange:

+ The Securities Company or Commercial Bank where the individual opens the securities deposit account is responsible for deducting 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 in point b.2, clause 2, Article 11 of Circular 111/2013/TT-BTC.

+ The Fund Management Company where the individual authorizes the management of the securities investment portfolio is responsible for deducting personal income tax at a rate of 0.1% of the securities transfer price based on the allocation statement provided by the company to the depository bank where the company opens the securities deposit account.

- For securities transferred not through the Stock Exchange system:

+ For securities of public companies that have registered centralized securities at the Securities Depository Center:

The Securities Company or Commercial Bank where the individual opens the securities deposit account will deduct personal income tax at a rate of 0.1% of the transfer price before processing the procedure to change the securities ownership at the Securities Depository Center.

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

The authorized Securities Company will deduct personal income tax at a rate of 0.1% of the transfer price before processing the procedure to change the securities ownership.

The individual transferring the securities must present the transfer contract to the Securities Company when processing the procedure to change the securities ownership.