Personal income tax has been in place for a long time in many countries. The subject of this tax is all domestic individuals and foreigners whose income is generated in the host country, regardless of occupation and social status. According to Vietnamese law, personal income taxable income includes income from business, salary, wages, capital investment, capital transfer, winning prizes, etc. To better understand the tax rates and How to calculate personal income tax from the transfer of shares in an unlisted joint-stock company, DHP Law Firm introduces to readers and customers the following article.
1. Tax rates and PIT calculation in the transfer of shares (for unlisted enterprises)
Before May 1, 2018:
According to the provisions of Circular No. 111/2013/TT-BTC, the transfer of shares in a joint-stock company is the transfer of securities (“income from securities transfer, including: income from transfer of shares. , the right to buy stocks, bonds, bills, fund certificates and other securities in accordance with the Law on Securities; income from the transfer of shares of individuals in a joint-stock company in accordance with the Law on Enterprise”).
Therefore, the tax rate from the transfer of shares is 0.1% of the transfer price (Point dd, Clause 7, Article 2, Law amending and supplementing a number of articles of the tax laws in 2014).
After May 1, 2018:
According to the provisions of the law in Circular No. 25/2018/TT-BTC, the transfer of shares is not considered a transfer of securities (“income from securities transfer, including: income from transfer of shares, the right to buy stocks, bonds, bills, fund certificates and other securities as prescribed in Clause 1, Article 6 of the Law on Securities Incomes from the transfer of shares by individuals in a joint-stock company prescribed in Clause 2, Article 6 of the Law on Securities and Article 120 of the Law on Enterprises”).
Therefore, from May 1, 2018, the transfer of shares in a joint-stock company will be considered as a transfer of contributed capital according to the provisions of Clause 4, Article 3, Decree No. 65/2013/ND-CP . Tax rate in case of transfer of contributed capital is 20% calculated on the selling price minus the purchase price and deducted from reasonable expenses related to generating income from capital transfer (Based on Article 15, Decree 65/2013) /ND-CP and Article 11 of Circular 111/2013/TT-BTC).
2. Personal income tax rate from the transfer of shares by non-residents (investors who do not register their permanent residence in Vietnam or do not reside in Vietnam from 06 months in 01 year).
According to the provisions of Article 28 of the Law on Personal Income Tax of 2007, non-residents are entitled to the tax rate of 0.1% on the transfer price of shares. Therefore, in case the transferor is a foreign individual, the tax rate of 0.1% as mentioned above may apply.
For support and advice on tax rates, how to calculate personal income tax in the best way, please contact us with the following information:
DHP Law Firm
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