Proposal to pay tax immediately upon receiving stock dividends

The Ministry of Finance believes that it is necessary to clearly stipulate the time for deduction and tax declaration for income from dividends and bonuses in the form of securities.

In the draft amendment to Decree 126 regulating a number of articles of the Law on Tax Administration, the Ministry of Finance said that it is necessary to clearly stipulate the time for deduction and declaration of tax on income from dividends and bonuses in securities to limit policy abuse and prolong the time for tax obligations.

Specifically, this agency proposed that personal income tax must be deducted, declared and paid immediately at the time of receiving dividends and bonuses in securities, instead of waiting until the securities are sold. The issuing organization is responsible for deducting and paying taxes on behalf of individuals.

In fact, dividends and profits are being paid in many forms such as cash, securities, or capital increase. Of which, cash dividends are deducted and declared for tax payment by the paying organization for individuals and have been applied effectively and smoothly in the past, according to the Ministry of Finance. As for dividends and bonuses in securities, they only have to pay tax when selling or transferring those shares, not immediately when receiving dividends.

The Ministry of Finance believes that this regulation is inconvenient because many individuals who receive dividends and bonuses in the form of securities do not need to transfer shares or capital for a long time. As a result, they do not have to declare and pay taxes immediately at the time of income.

"This has resulted in the assets and income of individuals, especially major and strategic shareholders such as the board of directors and the board of supervisors, increasing but not being taxed in a timely manner," the Ministry of Finance stated.

The operator also believes that postponing the time of tax declaration and payment until the transfer can create a situation of "late tax payment" with actual income having increased. At the same time, this regulation also makes it difficult for tax authorities to continue to monitor, control and collect personal income tax for a long time.

In the period 2016 - 2024, the amount of personal income tax declared from capital investment is nearly 52,000 billion VND, of which the revenue from taxing dividends and bonuses paid in securities is about 1,318 billion VND, accounting for 2.54%.

Meanwhile, according to the Vietnam Securities Depository, individuals receiving dividends and bonuses in the form of securities amount to 34.84 billion shares. If all of these shares are transferred and the share price is calculated at par value (VND10,000), with a tax rate of 5%, the estimated personal income tax to be declared and paid is up to VND17,240 billion.

Thus, the actual declared personal income tax from dividends and stock bonuses accounts for only 8% of the estimated amount.

The agency also referred to international experience showing that some countries such as Thailand and India stipulate that the time for calculating tax is when dividends are paid and the issuing organization must deduct tax according to the prescribed tax rate. Specifically, Thailand is applying a tax rate of 10%, India applies 10% on income exceeding 5,000 Rupees.

TH (according to VnExpress)

Source: https://baohaiduong.vn/de-xuat-nop-thue-ngay-khi-nhan-co-tuc-bang-chung-khoan-415329.html