In the process of amending the Law on personal income tax, the regulation on tax calculation periods is one of the contents that ministries, branches and localities are interested in.
Accordingly, the People's Committee of Khanh Hoa province proposed to adjust the tax calculation method for income from securities transfers. Instead of having the option of calculating by transaction or by year, this locality recommends applying it by transfer, to ensure consistency with Clause 1, Article 13 of the Law on personal income tax, in which the taxable income is determined based on the transaction value of each transfer.
Comments on the method of calculating personal income tax on securities
Dr. Nguyen Ngoc Tu - lecturer at Hanoi University of Business and Technology - said that the 2007 Law on personal income tax once stipulated two methods of tax calculation for real estate transfer and stock investment. At that time, personal income tax is calculated at 25% on profit, or if income cannot be determined, a fixed tax rate will be applied based on securities revenue or real estate value.
However, since the 2013 amended Law on personal income tax took effect, there has only been one fixed tax calculation method. For securities, the tax rate of 0.1% is applied to the total transaction value, similar to the previous method of calculating revenue tax.
According to Dr. Nguyen Ngoc Tu, this tax calculation method may not fully reflect the nature of personal income tax, which is often applied to net income after deducting investment expenses.
In the past, there have been many contributions to the adjustment of tax calculation methods to ensure compliance with investment practices. Some investors believe that calculating tax on total transaction value does not really encourage long-term investment, while some other opinions suggest keeping the current calculation method to ensure the stability of tax policy.
Consider adjusting to comply with international practices
Dr. Nguyen Tri Hieu - an economic expert - commented that the Vietnamese stock market currently applies a tax rate of 0.1% on total transaction value, instead of taxing on net profit as in many other countries.
"According to this calculation, investors still have to pay taxes even though the transaction may not be profitable. This can affect investment sentiment, especially in the context of the market needing to attract long-term capital flows" - Dr. Nguyen Tri Hieu shared.
He also cited tax policies in some countries in the region. For example, Singapore does not apply personal income tax on securities transactions, contributing to increased market liquidity.
"The Ministry of Finance can consider adjusting tax policies in the direction of focusing on net profit from stock transfers, instead of calculating according to transaction value. This will help the tax system get closer to international practices, while ensuring reasonableness for investors" - Dr. Nguyen Tri Hieu proposed.
Opinions on tax policies for securities will continue to be considered during the process of amending the Law on personal income tax, aiming to suit economic reality and create favorable conditions for investors.
