According to the Draft Law on Personal Income Tax (replacement), the Ministry of Finance proposes to amend the method of calculating personal income tax for capital and securities transfer activities, in a flexible direction between calculating based on actual interest or applying a fixed ratio on transfer price.
Accordingly, personal income tax on income from capital transfers of residential individuals is calculated at a tax rate of 20% on the taxable income section, determined for each transfer.
In case the taxpayer can determine the selling price, purchase price and reasonable expenses related to capital transfer activities, the taxable income is determined by the selling price minus the purchase price and reasonable expenses. On that basis, personal income tax is calculated at 20% of this income.
In case the purchase price or cost cannot be determined, personal income tax is calculated directly at 2% on the selling price (transfer price).
Regarding securities transfer activities, the draft law also clearly stipulates two methods of tax calculation for residential individuals.
In case the purchase price and reasonable costs related to income creation are determined, taxable income is determined according to the formula: selling price minus purchase price and reasonable costs. After that, this income will be subject to a tax rate of 20%, calculated annually.
In case the purchase price and cost cannot be determined, taxable income will be calculated at a rate of 0.1% on the stock selling price, applied to each transfer.
The draft also clearly stipulates the time to determine taxable income as the time of transaction completion, according to the provisions of specialized laws.
