Proposal to pay tax immediately upon receiving stock dividends, not waiting for transfer

According to the Ministry of Finance, many shareholders have not transferred their shares immediately after receiving dividends in the form of securities or have no need to transfer them, while their assets are constantly increasing...

The Ministry of Finance proposes that individuals receiving dividends or bonuses in the form of securities should pay taxes immediately, instead of waiting until the securities are transferred - Image: AI drawing.

There are concerns about policy abuse if taxes are not collected immediately...

The Ministry of Finance is seeking feedback on a draft decree amending and supplementing several articles of Decree 126 guiding the implementation of the Law on Tax Administration.

According to the Ministry of Finance, from 2016 to the end of 2024, individuals receiving dividends in securities and existing shareholders receiving bonuses in securities received a total of 34.84 billion shares.

If all of these shares are transferred and the share price is calculated at par value (10,000 VND), with a tax rate of 5%, the estimated personal income tax that must be declared and paid would be approximately 17,420 billion VND.

However, according to the Ministry of Finance, the actual amount of personal income tax declared by individuals receiving dividends in securities and existing shareholders receiving bonuses in securities during the above period was only about 1,318 billion VND, accounting for nearly 8% of the estimated 17,420 billion VND mentioned above (if all these shares were transferred).

According to the ministry's statistics, in the period 2016-2024, the total amount of personal income tax declared from capital investment activities reached VND 51,965 billion, of which tax collected from dividends and bonuses paid in securities was only about VND 1,318 billion, accounting for 2.54%.

Notably, the Ministry of Finance also cited international experience from Thailand and India, showing that these countries stipulate that the tax calculation time is the time of dividend payment, and the issuer of shares paid as dividends is obligated to deduct tax at the stock dividend tax rate.

Thailand applies a 10% tax rate, while India applies a 10% tax rate on income exceeding 5,000 rupees.

How will the tax rate be calculated?

To limit the abuse of policies and the prolongation of the deadline for declaring and paying personal income tax, the Ministry of Finance believes it is necessary to clearly define the withholding period and amend the personal income tax declaration period for income from dividends, bonuses paid in securities, and income from capital increases resulting from retained earnings.

Accordingly, the tax authorities have proposed that personal income tax will be deducted, declared, and paid immediately when individuals receive dividends or bonuses in the form of securities.

"There is no need to wait until the transfer of similar securities to declare and pay personal income tax on this income," the Ministry of Finance stated.

Simultaneously, the organization paying the income will deduct personal income tax at the time the company pays dividends or bonuses, as previously notified to shareholders.

The Ministry of Finance also added a method for determining the amount of personal income tax to be withheld. Accordingly, the amount of personal income tax to be withheld is determined by multiplying the value of dividends, profits, and bonuses by the personal income tax rate on capital investment (5%).

According to current regulations, dividends and profits are paid in various forms such as cash, securities, or recognition of increased capital contributions.

With cash dividends, the paying organization has deducted, declared, and paid taxes on behalf of the individual.

However, dividends or bonuses in the form of securities, or capital increases recorded in a way that haven't been received yet, are not subject to tax until the individual transfers or withdraws the capital, at which point they are declared.

The tax authorities consider this regulation inadequate because many shareholders do not transfer their shares immediately after receiving them or have no need to transfer them, while their assets continue to increase.

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BINH KHANH

Source: https://tuoitre.vn/de-xuat-nop-thue-ngay-khi-nhan-co-tuc-bang-chung-khoan-khong-doi-luc-chuyen-nhuong-20250630193711854.htm