Some securities companies have sent notices to investors about the implementation of personal income tax declaration and payment from capital investment in securities companies with the implementation period starting from December 5. 2020. FPTS Securities Company said, the time of declaration and payment of personal income tax from capital investment when individual investors sell / transfer securities of the same type.
Personal income tax from payable capital investment = Taxed income x 5% tax rate. In which, taxed income = Number of shares of the same type sold / transferred * Taxed price.
Number of securities sold / transferred: After receiving dividends in shares, bonus shares, the number of sold / transferred securities must declare and pay PIT from capital investment until the number of shares received instead dividends and bonus shares (Priority is to calculate the number of shares from stock dividends / bonus shares).
Taxable price: * If Selling / transferring price> = Face value (10,000 VND): Taxed price = Face value
* If Selling / transferring price
In the announcement of Yuanta Securities Company, this securities company said that, for securities due to receiving stock dividends, receiving bonus shares arising before December 5, 2020, YSVN is still waiting. Detailed instructions from the Tax Department of Ho Chi Minh City.
Recently, there have been many opinions that disagree with the plan to pay tax with bonus shares. The Vietnam Association of Financial Investors (VAFI) said that paying dividends by shares is not a form of distributing profit after tax or dividing cash with shareholders. The payment of stock dividend does not change the equity of the enterprise at the time of division, does not reduce the undistributed profit of the enterprise as in the case of cash dividend, does not increase the value of the stock. In terms of books and market price (in theory but in practice after the split, the market price of shares can decrease or increase depending on many factors), so when shareholders receive shares, this amount is not considered. income from capital investment.
Article 3, Point 3 of the 2014 Personal Income Tax Law stipulates that income from capital investment includes loan interest, dividends, and income from capital investment in other forms of investment.
VAFI believes that paying dividends in shares or bonus shares cannot be considered as capital investment income because these transactions do not lose a copay to investors. The payment of dividends in shares or bonus shares in addition to increasing the liquidity of the shares, also recognizes an increase in assets, an increase in the company’s charter capital through profitable business. Therefore, it is not reasonable to tax bonus shares.
Meanwhile, Mr. Dang Ngoc Minh, Deputy Director of the General Department of Taxation explained, each investor, when receiving dividends, must pay tax on that dividend of 5%, in case investors buy and sell stocks. According to the Law on Personal Income Tax, if there is a difference from the securities trading, it is required to pay tax, these are 2 different taxes, there must be different order, it cannot be said to be the same.
“Currently allowing businesses to pay dividends by shares instead of cash. If dividing by cash, the individual’s tax liability and the securities company is responsible for deducting 5%. But businesses issue shares. Bonus shares and dividends by bonus shares, only when a transaction arises, must pay 5% tax. Investors have 1,000 shares, and receive dividends of 500 bonus shares, when a transaction related to a transaction occurs. In that stock, the state collects 5% of the dividends received from the transaction “, Mr. Minh added.
Source: bizlive.vn – Translated by fintel.vn