Abolish the proposal to impose a tax of 20% on stock market interest
In the latest draft for the draft Law on Personal Income Tax (amended) sent to the Ministry of Justice for appraisal, the Ministry of Finance has finalized a plan to propose a personal income tax rate (PIT) for income from capital transfer and securities transfer.
For individuals:
(1) Personal income tax on income from capital transfers of residential individuals is determined by taxable income multiplied by a tax rate of 20% for each transfer.
Taxable income from capital transfers is determined by selling price minus purchase price and reasonable expenses related to income generation from capital transfer.
In case the purchase price and costs related to the capital transfer cannot be determined, personal income tax is determined by the seller price with a tax rate of 2% ( uniformly applied to both residential and non-resident individuals).
(2) Personal income tax on income from securities transfers is determined by the selling price of securities with a tax rate of 0.1% for each transfer.
For non-resident individuals:
(1) Personal income tax of non-resident individuals on income from transfers is determined by taxable income multiplied by a tax rate of 20% for each transfer occurring, regardless of whether the transfer is carried out in Vietnam or abroad.
Taxable income from capital transfers is determined by transfer price minus purchase price and reasonable fees related to income generation from capital transfer at Vietnamese organizations and individuals.
(2) For securities transfer and capital transfer activities of non-resident individuals, a tax rate of 0.1% is applied on the transfer price each time.
Thus, with income from securities transfers, the Ministry of Finance has withdrawn its proposal to apply a 20% tax rate on securities sales interest. Instead, the ministry proposed to maintain the regulation of collecting personal income tax of 0.1% on the transfer price each time.
Abolish the real estate interest tax plan
In this draft, the Ministry of Finance also abandoned the proposal to apply a tax rate of 20% on income from real estate transfers, calculated on the income for each transaction (selling price minus purchase price and related costs).
In the submission to the Ministry of Justice, the draft law did not mention the content of amending and perfecting regulations on income subject to personal income tax and how to calculate tax for real estate transfer activities of individuals.
Previously, the Ministry of Finance proposed applying a tax rate of 20% on income from real estate transfers, calculated on the income of each transaction (selling price minus purchase price and related costs).
In case the purchase price and cost cannot be determined, the tax is calculated directly on the selling price according to the holding period. Accordingly, under 2 years, a tax rate of 10%, from 2 to 5 years is 6%, from 5 to 10 years is 4%, over 10 years or real estate originating from inheritance is 2%. Individuals who receive inheritance but have speculative activities will be taxed like real estate business.
The previous plan to collect interest on each real estate transaction was considered reasonable in principle, but difficult to implement in practice. The reason is that determining the capital price and related costs in transfer contracts is still problematic, while the data management system has not met the requirements.
