The Ministry of Finance has dropped its proposal to impose a 20% tax on interest earned on securities and real estate.

The Ministry of Finance has dropped its proposal to impose a 20% tax on securities gains. Photo: Le Toan

Proposal to impose a 20% tax on profits from securities sales has been dropped.

In the latest draft of the Personal Income Tax Law (amended) submitted to the Ministry of Justice for appraisal, the Ministry of Finance has finalized the proposed personal income tax rate for income from capital transfers and securities transfers.

For resident individuals:

(1) Personal income tax on income from capital transfers of resident individuals is determined by taxable income multiplied by a tax rate of 20% for each transfer.

Taxable income from capital gains is determined by the selling price minus the purchase price and reasonable expenses related to generating the income from the capital gains.

In cases where the purchase price and related costs of capital transfer cannot be determined, personal income tax is determined by multiplying the selling price by a tax rate of 2% (applied uniformly to both resident and non-resident individuals).

(2) Personal income tax on income from securities transfer is determined by the selling price of securities multiplied by the tax rate of 0.1% for each transfer.

For non-resident individuals:

(1) The personal income tax of non-resident individuals on income from capital transfers is determined by taxable income multiplied by a tax rate of 20% for each transfer, regardless of whether the transfer is carried out in Vietnam or abroad.

Taxable income from capital gains is determined by the transfer price minus the purchase price and reasonable expenses related to generating income from the transfer of capital in Vietnamese organizations and individuals.

(2) For securities transfer and capital transfer activities of non-resident individuals, a tax rate of 0.1% on the transfer price for each transaction is applied.

Thus, regarding income from securities transfers, the Ministry of Finance has withdrawn its proposal to apply a 20% tax on profits from securities sales. Instead, the ministry proposes maintaining the regulation of collecting personal income tax at 0.1% on the transfer price for each transaction.

Abolish the option of taxing real estate profits.

In this draft, the Ministry of Finance also dropped the proposal to apply a 20% tax rate to income from real estate transfers, calculated on the income from each transaction (selling price minus purchase price and related costs).

The submission accompanying the draft law to the Ministry of Justice did not mention any amendments or improvements to the regulations on taxable personal income and the method of calculating tax on real estate transfers by individuals.

Previously, the Ministry of Finance proposed a 20% tax rate on income from real estate transfers, calculated on the income from each transaction (selling price minus purchase price and related costs).

In cases where the purchase price and costs cannot be determined, the tax is calculated directly on the selling price based on the holding period. Accordingly, the tax rate is 10% for holdings of less than 2 years, 6% for 2 to 5 years, 4% for 5 to 10 years, and 2% for holdings of more than 10 years or for properties acquired through inheritance. Individuals who receive inheritances but engage in speculative activities will be taxed as if they were conducting real estate business.

The proposed tax based on the profit from each previous real estate transaction is considered reasonable in principle, but difficult to implement in practice. This is because determining the cost basis and related expenses in transfer contracts remains problematic, while the existing data management system is inadequate.

Source: https://baoquangninh.vn/bo-tai-chinh-bo-de-xuat-ap-thue-20-tren-lai-chung-khoan-va-bat-dong-san-3374495.html