Trinh Thu Thuy, head of the personal income tax department of the Department of Taxation in Ho Chi Minh City, said once the law takes effect, investors will need a personal capital gains tax code to buy and sell shares on the stock exchange. Investors will have to include their code in trading orders.
Thuy said employees will be able to use their existing income tax code for stock trading. Non-employee investors will have to apply for a code from their local tax office.
Under the new Personal Income Law, the government allows income tax deductions for dependants but such deductions will not apply to capital gains tax payable on stock trading.
Thuy said the regulations did not yet specify how the tax would be calculated for people who had more than one employer.
“Therefore investors should keep all earning receipts,” Thuy said. Investors who can’t report detailed information about their stock trading, such as selling and buying prices and transaction charges, will pay capital gains tax at a rate of 0.1 percent of the total amount they gained from selling shares. For example, investors, who traded unlisted stocks, will have no receipt. If investors buy an unlisted stock at different times at different prices, the tax will be calculated on an average price.
In contrast, investors have to pay capital gains tax at the rate of 20 percent of the net profit from share trading.
Investors will be able to choose whether to pay capital gains tax each time they make transactions or at the end of every year.
Expatriates and foreigners who don’t live in Vietnam for six months or more of one year or for 12 consecutive months will have to pay the tax at the rate of 0.1 percent of the total selling amount.
Reported by Thanh Xuan |
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