What is the Personal Income Tax Rate for Inherited Securities? What Types of Income are Derived from Inheritance?
What is the personal income tax rate on inheritance of securities?
According to Article 16 Circular 111/2013/TT-BTC (amended by Clause 1, Article 19 Circular 92/2015/TT-BTC) and Article 23 Circular 111/2013/TT-BTC as follows:
(1) Calculation of personal income tax on inheritance of securities for resident individuals:
| Personal income tax on inheritance payable = Taxable income x Tax rate 10% || --- |
Taxable income from inheritance is the value of the inherited assets exceeding 10 million VND per occurrence.
Accordingly, the value of inherited assets is determined for each case specifically as follows:
For securities inheritance: the value of the inherited securities is the value exceeding 10 million VND applied to all the received securities codes without deducting any costs at the time of registration for ownership transfer. Specifically:
- For securities traded on the Stock Exchange: the value of the securities is based on the reference price on the Stock Exchange at the time of registration for ownership transfer.
- For other securities: the value of the securities is based on the book value of the issuing company at the time of the most recent financial statement per accounting regulations before the ownership transfer registration.
(2) Calculation of personal income tax on inheritance of securities for non-resident individuals:
Personal income tax on inheritance of securities for non-resident individuals is calculated as follows:
| Personal income tax on inheritance payable = Taxable income x Tax rate 10% || --- |
- Taxable income from inherited assets for non-resident individuals is the value exceeding 10 million VND per occurrence received in Vietnam.
Income from inheritance for non-resident individuals is determined similarly to resident individuals.
- The time of determining taxable income is when the individual carries out the procedure for registering ownership or use rights of the assets in Vietnam.
Thus, the personal income tax rate on inheritance of securities is currently 10%.
What is the personal income tax rate on inheritance of securities? What are the types of income from inheritance?
What types of income are considered inheritance income?
According to Clause 9, Article 2 Circular 111/2013/TT-BTC, income from inheritance is the income received by an individual according to a will or legal inheritance regulations. Specifically:
- For inherited securities:
+ Shares, rights to buy shares, bonds, promissory notes, fund certificates, and other securities under the Securities Law;
+ Individual shares in joint-stock companies according to the Enterprise Law.
- For inherited capital in economic organizations and business establishments, including: contributed capital in limited liability companies, cooperatives, partnerships, business cooperation contracts; capital in private enterprises, individual business establishments; capital in associations, funds permitted to be established by law; or the entire business establishment if it's a private enterprise or individual business establishment.
- For inherited real estate, including:
+ Land use rights;
+ Land use rights with assets attached to the land;
+ House ownership rights, including future houses;
+ Infrastructure and constructions attached to the land, including future constructions;
+ Land lease rights;
+ Water surface lease rights;
+ Other income from inherited real estate in any form; except income from inheritance which is real estate income.
- For inherited assets requiring registration of ownership or usage rights with State management agencies such as: cars; motorbikes, motorcycles; ships, including barges, canoes, tugboats, pushboats; boats, including yachts; aircraft; hunting rifles, sports guns.
Who is considered an heir?
According to Article 613 Civil Code 2015:
Heir
An heir must be an individual who is alive at the time of the opening of the inheritance or born and alive after the time of the opening of the inheritance but conceived before the decedent’s death. If the heir according to the will is not an individual, it must exist at the time of the opening of the inheritance.
Thus, an heir can be an individual, and in some cases, the heir is not an individual.
For non-individual heirs, they can only inherit through a will. The condition for such entities to be considered heirs is that they must exist at the time of the opening of the inheritance.
For individual heirs, they must be alive at the time of the opening of the inheritance or born and alive after the time of the opening of the inheritance but conceived before the decedent’s death.
LawNet