How to calculate personal income tax when transferring shares?

Share transfer is a regular activity in joint stock companies. So currently, how does the law regulate personal income tax when transferring shares? Below is detailed information from S4B Vietnam to help individuals and units determine and account personal income tax quickly and accurately.

1. Does transferring shares require personal income tax?

Pursuant to the provisions of Point b, Clause 4, Article 2 of Circular 111/2013/TT-BTC, amended and supplemented in Article 4 of Circular 25/2018/TT-BTC, regulating taxable income Personal income, including:

Income from the transfer of securities, specifically: Income from the transfer of shares, stock purchase rights, treasury bills, bonds or fund certificates or other types of securities. Income from the transfer of shares of individuals in a Joint Stock Company.

At the same time, based on the provisions in Point b, Clause 2, Article 11 of Circular 111/2013/TT-BTC, which has been amended and supplemented in Article 16 of Circular No. 92/2015/TT-BTC, individuals carry out Currently, the transfer of securities must pay personal income tax according to regulations with a tax rate of 0.1% calculated on the securities transfer price of each transfer.

According to the above regulations, the transfer of shares is determined with a personal income tax rate of 0.1% calculated on the transfer value of each transfer, not the difference between the selling price and the purchase price.

 

In case of share transfer, personal income tax must be paid at the above tax rate.

2. How to calculate personal income tax when transferring shares?

The calculation of personal income tax when transferring shares for resident individuals is specified in Points a and b, Clause 2, Article 11 of Circular 111/2013/TT-BTC, which has been amended and supplemented in Article 11 of Circular 111/2013/TT-BTC. 16 Circular 92/2015/TT-BTC.

Accordingly, the calculation of personal income tax for share transfer activities is carried out according to the formula below: Personal income tax payable = Taxable income x Tax rate

In there:
(1) Income calculated from securities transfer is determined as the securities transfer price of each time. The securities transfer price in this case is specifically determined as follows:

  • For securities of public companies, traded on the Stock Exchange, the securities transfer price is determined as the price made at the Stock Exchange. The exercise price is the security price, determined according to the order matching results or the price formed from agreed transactions at the Stock Exchange.
  • For securities not falling into the above cases, the transfer price is determined as the price recorded in the transfer contract/actual transfer value/price recorded in the accounting books of the company with the transferred securities. Determined at the time the company prepares the most recent financial statement according to accounting regulations before the time of securities transfer.

(2) Individuals transferring securities must pay personal income tax at the tax rate of 0.1% calculated on the value of the securities transfer of each transfer.

According to the provisions of Article 20 of Circular 111/2013/TT-BTC, personal income tax on income from the transfer of securities of non-resident individuals is determined by the total amount paid by the non-resident individual. received from securities transfer at Vietnamese organizations/individuals multiplied by (x) the tax rate of 0.1%, regardless of whether the securities transfer is performed in Vietnam or abroad.

  • The total amount of money that non-resident individuals in Vietnam receive from transferring capital at Vietnamese organizations/individuals is determined as the securities transfer price without deducting any expenses, including taxes.
  • The transfer price in each specific case is determined as for individuals residing in Vietnam according to the content in item a.1, point a, clause 2, Article 11 of Circular 111/2013/TT-BTC, which has been amended changes and supplements in Article 16 of Circular 92/2015/TT-BTC.

How to calculate personal income tax when transferring shares?

3. Time to determine personal income tax when transferring shares

Pursuant to Point c, Clause 1, Article 11 of Circular 111/2013/TT-BTC, the time for determining personal income tax when transferring shares is prescribed as follows:

  • For securities of public companies traded on the Stock Exchange: The time to determine personal income tax is the time the taxpayer receives income from the transfer of securities.
  • For securities of public companies that are not traded on the Stock Exchange, only transfer ownership through the rights transfer system at the Securities Depository Center: Time to determine Personal income tax is the time of transferring ownership of securities at the Securities Depository Center.
  • For securities that do not fall into one of the above cases: The time for determining personal income tax is the time when the securities transfer contract takes legal effect.

Above is information about How to calculate personal income tax when transferring shares?

If you still have any problems, please contact us:

S4B Vietnam

  • Address: Unit 602A, Tower A, Handi Resco Office Building. 521 Kim Ma Street, Ba Dinh District, Hanoi
  • Tel: + 84 24 3974 4181
  • Email: service@s4b.com.vn

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