Legal basic

• Law on personal income tax 2007.
• Decree No. 65/2013/ND-CP of June 27, 2013, detailing a number of articles of the Law on personal income tax and law amending and supplementing a number of articles of the law on personal income tax.
• Circular No. 111/2013/TT-BTC of August 15, 2013 on the implementation of the Law on personal income tax, the law on the amendments to the law on personal income tax, and the government’s decree no. 65/2013 elaborating a number of articles of the law on personal income tax and the law on the amendments to the law on personal income tax.
• Circular No. 25/2018/TT-BTC dated March 16, 2018 on guidelines for government’s decree No. 146/2017/ND-CP dated december 15, 2017 and amendments to some articles of the Circular No. 78/2014/TT-BTC dated June 18, 2004 of the ministry of finance and Circular No. 111/2013/TT-BTC dated August 15,2013 of the ministry of finance.   
• Circular No. 92/2015/TT-BTC dated June 15, 2015, guidelines for vat and personal income tax incurred by residents doing business, amendments to some articles on personal income tax of the Law No. 71/2014/QH13 on the amendments to tax Laws and the Government’s Decree No. 12/2015/NĐ-CP on guidelines for the Law on the amendments to tax Laws and Decrees on taxation

Regulation

Tax rate and tax calculation on income from share transfer

For income from the transfer of shares, the basis for calculating personal income tax will be based on the provisions for income from securities transfer. The tax base for securities transfer is taxable income and tax rate.

First, taxable income

According to the provisions of Article 16 of Circular 92/2015, amending and supplementing Points a and b, Clause 2, Article 11 of Circular 111/2013:

“Taxable income from securities transfer is determined as the securities transfer price each time.

a.1) Securities transfer price is determined as follows:

a.1.1) For securities of public companies traded on the Stock Exchange, the securities transfer price is the exercise price at the Stock Exchange. The exercise price is the security price determined from the order matching results or the price formed from the put-through transactions at the Stock Exchange.

a.1.2) For securities not falling into the above case, the transfer price is the price stated in the transfer contract or the actual transfer price or the price according to the accounting books of the unit having the transferred securities at the time of transfer. prepare the latest financial statement in accordance with the law on accounting before the time of transfer”.

Second, tax rates and tax calculation

According to the provisions of Article 16 of Circular 92/2015/TT-BTC, amending and supplementing Points a and b, Clause 2, Article 11 of Circular No. 111/2013/TT-BTC:

(i) Tax rate:

“Individuals transferring securities shall pay tax at the tax rate of 0.1% on the securities transfer price each time”.

(ii) Tax calculation:

Personal income tax payable = Securities transfer price each time x Tax rate of 0.1%

Time to determine taxable income

According to the provisions of point c3, clause 2, Article 11 of Circular 111/2013, the time of determining taxable income from securities transfer is the time when the securities transfer contract takes effect.

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