VietnameseOfficial Dispatch No. 42/BTC-TCT dated January 02, 2009 of the Ministry of Finance on withholding of personal income tax on securities transfer
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Official Dispatch No. 42/BTC-TCT dated January 02, 2009 of the Ministry of Finance on withholding of personal income tax on securities transfer
| Issuing body: | Ministry of Finance | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 42/BTC-TCT | Signer: | Do Hoang Anh Tuan |
| Type: | Official Dispatch | Expiry date: | Updating |
| Issuing date: | 02/01/2009 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Securities , Tax - Fee - Charge |
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Effect status: Known
THE MINISTRY OF FINANCE ------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom – Happiness --------- |
No. 42/BTC-TCT Re: on withholding of personal income tax on securities transfer | Hanoi, January 02, 2009 |
To: | - Ministries, ministerial-level agencies and government-attached agencies - People’s Committees of provinces and centrally run cities |
Pursuant to Articles 23 and 24 of the Law on Personal Income Tax;
Pursuant to Articles 16 and 17 of the Government’s Decree No. 100/2008/ND-CP of September 8, 2008, detailing a number of articles of the Law on Personal Income Tax;
Pursuant to the Ministry of Finance’s Circular No. 84/2008/TT-BTC of September 30, 2008, guiding the implementation of a number of articles of the Law on Personal Income Tax and guiding the implementation of the Government’s Decree No. 100/2008/ND-CP of September 8, 2008, detailing a number of articles of the Law on Personal Income Tax;
Pursuant to the Minister of Finance’s Decision No. 27/2007/QD-BTC of April 24, 2007, promulgating the Regulation on organization and operation of securities companies;
The Ministry of Finance provides specific guidance on the withholding, filing and payment of personal income tax on securities transfers by withholding organizations as follows:
I. Scope of application: This official letter guides the withholding, filing and payment of personal income tax on securities transferred by individuals at securities companies or for which transfer procedures are carried out by individuals at securities companies or issuing companies, including: listed securities, unlisted securities already registered for trading at the Hanoi Securities Trading Center; unlisted securities not yet registered for trading; investment fund certificates; listed bonds and unlisted bonds.
II. Specific guidance on withholding, filing and payment of personal income tax
1. For listed securities:
Responsibilities of securities companies at which transferors conduct securities transfers:
a/ Tax withholding:
- Based on securities prices realized at the Stock Exchange/Securities Trading Center and the quantity of securities successfully transferred by an investor, the securities company shall calculate the personal income tax to be withheld at the rate of 0.1% of the total value of securities upon each transfer and notify the payable tax amount to the transferor.
The time of notification of the personal income tax amount to be withheld and remitted into the state budget is also the time the securities company notifies the successful transaction.
+ If the transferor opens his/her transaction account at the securities company, the latter shall retain the withheld tax amount and remit it into the state budget. After withholding the tax and a charge, the securities company shall pay the remainder to the transferor.
+ If the transferor opens his/her transaction account at a bank, the securities company shall notify the bank of the tax amount to be withheld for the latter to retain the withheld tax amount, and shall file and pay this amount into the state budget.
The time when the securities company notifies the bank to withhold and transfer the tax amount is also the time of notifying the collection of the brokerage charge to the person having the successfully transferred securities.
The time limit for the bank to transfer the withheld tax amount to the securities company is 3 working days from the date of receipt of the withholding notification of the securities company. The bank at which the transferor opens an account may pay the money to the transferor only after withholding the tax amount.
b/ Tax filing and payment: The securities company with which the investor registers for trading shall file, pay and finalize the withheld personal income tax amount for securities transfers. The bank with which the transferor opens an account is not required to file and finalize tax.
The personal income tax filing form, time of payment and finalization of personal income tax for securities transfers are guided in Circular No. 84/2008/TT-BTC of the Ministry of Finance.
The monthly tax amount to be withheld and filed is based on results of successful securities transactions in the month (not depending on the time of money transfer).
2. For unlisted securities:
a/ For unlisted securities already registered at the Hanoi Securities Trading Center:
Securities companies that have been approved by the securities trading center to participate in conducting transactions in unlisted securities already registered for trading shall withhold, file and pay personal income tax like listed securities.
b/ For unlisted securities not yet registered at the Hanoi Securities Trading Center for which the issuing companies have authorized securities companies to manage shareholder registers:
Securities companies which are authorized by issuing companies to manage shareholder lists shall withhold, file and pay personal income tax.
The bases for withholding tax include the securities transfer price and the quantity of securities upon each transfer. The securities transfer price is determined to be the price indicated in the transfer contract. If the transfer contract indicates no price or a price lower than the issuing company’s book price at the time of transfer or at the time nearest to the time of transfer, the securities company shall withhold tax based on the issuing company’s book price. The issuing company shall supply the securities company with the book price of securities upon any change in the securities price.
The securities transferor shall produce the transfer contract with the securities company concurrently with filing a request for transfer of ownership of sold securities.
The securities company authorized to manage the shareholder list shall calculate and collect personal income tax for each transfer and file and pay the tax under Circular No. 84/2008/TT-BTC of the Ministry of Finance.
The securities company may carry out procedures for transferring ownership of securities only after the securities transferor has paid personal income tax.
b/ For unlisted securities not yet registered at the Hanoi Securities Trading Center for which the issuing company has not yet authorized a securities company to manage the shareholder list or has only authorized a securities company to manage part of the investor list for transfer registration and dividend payment:
The issuing company shall withhold, file and pay personal income tax.
The bases for withholding tax include the securities transfer price and the quantity of securities upon each transfer. The securities transfer price is determined to be the price indicated in the transfer contract. If the transfer contract indicates no price or a price lower than the book price at the nearest time, the issuing company may withhold tax based on the book price at the nearest time.
The securities transferor shall produce the transfer contract with the issuing company concurrently with filing a request for transfer of ownership of sold securities.
The issuing company shall calculate and collect personal income tax for each transfer and file and pay the tax under Circular No. 84/2008/TT-BTC of the Ministry of Finance.
The issuing company may carry out procedures for transferring ownership of securities only after the securities transferor has paid personal income tax.
In case the issuing company authorizes a securities company to manage part of the investor list, the procedures for withholding, declaring and paying tax for securities transfers of authorized persons comply with the guidance at Point b above.
3. Time of application:
This official letter applies to successful securities transfer transactions from January 2, 2009.
Any problems arising in the course of implementation should be reported to the Ministry of Finance for further guidance.
FOR THE MINISTER VICE MINISTER Do Hoang Anh Tuan |
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