Securities taxes to take effect January 1

Provisions of the new Law on Personal Income Tax applicable to taxation of dividend income and capital gains on securities trading will take effect on January 1, said Vu Van Truong, director of the Ministry of Finance’s tax policy department.

The new taxes were suspended for all of 2009 as part of the Government’s stimulus package and to help sustain the stock market during the downturn.

Pursuant to the law, investors will have two options for paying the capital gains tax; either a flat 0.1 percent levy on the value of each securities transaction or a 20 percent tax on net capital gains during the tax year.

However, individuals opting to apply the 20 percent rate would still be temporarily charged the 0.1 percent levy on each securities transfer, Truong said.

“Most investors will opt for the 0.1 percent option due to the simple and transparent procedures for paying the tax with each transaction, as well as to avoid tedious and complicated formalities of tax computation and filing returns at the end of the year,” opined An Phat Securities Co general director Tran Thien Ha.

Tan Viet Securities Co deputy director Hoang Xuan Quyen predicted the tax would have little impact on the market as securities companies and investors have been aware it was coming since the end of last year.

Tax on securities trades will be collected by securities companies. Unlisted companies will be responsible for collecting the tax on behalf of their shareholders.

Source: VNA

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