MoF proposes 20 per cent tax on unlisted securities transfers

Under a draft decree guiding the revised Law on Personal Income Tax released on March 27 to collect comments, the Ministry of Finance (MoF) has set out detailed rules for calculating tax on various types of income from capital and securities transfers.

Accordingly, the drafting authority proposes to bring shares of unlisted companies into the scope of capital transfer taxation, in addition to existing provisions covering equity stakes in enterprises.

For such transactions, tax would be calculated at 20 per cent of taxable income, defined as the selling price minus the purchase price and related expenses, on a per-transaction basis.

If the purchase price and associated costs cannot be determined, a tax rate of 2 per cent on the transfer value would apply. This method would be uniformly applied to both resident and non-resident individuals in Vietnam.

The MoF explained that unlisted shares have characteristics similar to capital transfers, as they are traded infrequently and lack transparency, and therefore should fall within the taxable scope.

Meanwhile, income from the transfer of listed securities, including stocks, bonds, and fund certificates, would continue to be taxed at 0.1 per cent of the transaction value per trade, as currently applied. This is because such transactions are conducted regularly in the market with clear and transparent pricing. According to the drafting authority, maintaining a lower tax rate for listed securities is intended to encourage companies to list, enhance transparency, and protect investors.

Regarding tax declaration, individuals transferring capital would be responsible for self-declaration and payment. For securities transactions, the income-paying organisation would be required to withhold, declare, and pay tax on behalf of the individual at the 0.1 per cent rate.

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