Transferring shares is a fairly common activity today, however, there are many different ways of understanding the payment of share transfer tax. Through today’s article, let’s learn more about this issue with Pham Consult!
Due to changes in the legal system, over time there are differences in income subject to personal income tax. Specifically:
1. Do I have to pay personal income tax when transferring shares?
Personal income is understood as all the income an individual earns in a certain period of time, these incomes arise from: income from business activities; income from salaries and wages; income from capital investment activities; income from capital transfer activities; income from real estate transfer activities; royalties; income from winning prizes; income from franchise; income from inheritance; income from receiving gifts;… The tax authority will base on the above mentioned income of the individual to determine the obligation each individual must pay. This obligation is determined as personal income tax.
Transfer of shares is when a shareholder in a joint stock company transfers part or all of the shares he owns in the company to another organization or individual to receive a certain value. The current Enterprise Law stipulates that within 3 years from the time a joint stock company is granted a Business Registration Certificate by a competent authority, the founding shareholders in the company will have the right to freely Transfer your shares to other founding shareholders, but if you want to transfer to people who are not founding shareholders, it must be approved by the General Meeting of Shareholders. After 3 years from the date of issuance of the Business Registration Certificate, shareholders will have the right to freely transfer the shares they own, unless the company charter has provisions on transfer restrictions. transfer (Pursuant to the provisions in Clause 1, Article 127 of the Law on Enterprises 2020).
When transferring shares, the transferor will receive an income from the transfer activity. Pursuant to the provisions in Point b, Clause 4, Article 2 of Circular No. 111/2013/TT-BTC amended and supplemented by Article 4 of Circular No. 25/2018/TT-BTC, income from stock transfer , the right to buy stocks, bonds, treasury bills, fund certificates and other types of securities according to the provisions of the Securities Law 2019; Income from the transfer of shares in a joint stock company according to the provisions of the Securities Law and the Enterprise Law is determined as income from the transfer of securities and belongs to taxable income according to the provisions of the Law on Securities. Personal Income Tax Law and Circular No. 111/2013/TT-BTC.
On the other hand, shares as prescribed in Article 121 of the Enterprise Law 2020 are a form of expression of shares in a company. Therefore, when shareholders in a company transfer the shares they own in a joint stock company and receive income, this income will be determined as income from stock transfer activities. securities according to the provisions of the Enterprise Law and the Securities Law. Thus, income from share transfer activities is taxable income, so the person transferring shares will be responsible for paying tax from the income they receive. The tax base will be based on the individual’s tax base arising from securities transfer activities.
2. How much is personal income tax from share transfer activities? Is transfer of shares at par subject to personal income tax?
As analyzed in Section I above, the income received from share transfer activities is determined as income from securities transfer. Based on the provisions in Point b, Clause 2, Article 11 of Circular No. 111/2013/TT-BTC, amended and supplemented by Circular No. 92/2015/TT-BTC, regulating tax rates when an individual transfers securities. Securities will be calculated based on the price of each transfer of securities, so it will not be calculated according to the difference between the purchase price and selling price of securities. Thus, the transfer of shares at equal price does not serve as a basis for not having to pay tax (that is, even if there is a transfer at equal price, this transfer still incurs the liability to pay personal income tax). ).
The basis for calculating personal income tax on share transfer activities is determined based on taxable income and tax rate. The amount of personal income tax payable when transferring shares is determined based on the formula below:
|Personal income tax amount payable
|Securities transfer price (each transfer)
|Tax rate 0.1%
The time to determine income for tax calculation when securities transfer activities in general and share transfers in particular arise are determined as follows:
– For the transfer of securities that are securities of a public company listed on the Stock Exchange (listed on the stock exchange), the time to determine taxable income is when the taxpayer receives income from securities transfer activities;
– For the transfer of securities of companies that are public companies but do not conduct transactions on the Stock Exchange, the parties only carry out procedures for transferring ownership rights through the Center’s rights transfer system. securities depository, the time to determine taxable income is determined to be the time the parties transfer ownership of securities at the Securities Depository Center;
– In the case of securities transfer but the company is not a public company (not listed on the exchange), the time to determine taxable income is determined to be the time the securities transfer contract arises. legal effect.
– For cases where individuals contribute capital with securities but have not yet paid tax when contributing capital, the time to determine taxable income will be determined at the time the individual carries out capital transfer procedures or when the individual carries out capital transfer procedures. Perform procedures to withdraw your capital.
The tax rate for securities transfer activities is determined to be 0.1%.
How to determine the securities transfer price is determined according to the following cases:
– In the case of transferring securities of a public company and conducting transactions on the Stock Exchange, the stock transfer price is the price that the parties perform at the Stock Exchange. This price is determined as the stock price from the order matching results on the Stock Exchange or the price formed from agreed transactions at the Stock Exchange.
– In the case of transferring securities of a company that is not a public company and has not yet been listed on the Stock Exchange, the securities transfer price determined will be the price stated in the transfer contract or The actual price that the transferor or parties can also determine the securities transfer price based on the price according to the accounting books of the company whose securities are being transferred at the time the company prepares its financial statements. close to the time of transfer according to the provisions of the Accounting Law.
Thus, in the case of transferring shares in a joint stock company, even if it is a case of transfer at equal price, personal income tax must still be paid, because the basis for calculating personal income tax is from the transfer activity. This will only be based on the transfer price for each transfer multiplied by the tax rate determined in accordance with the law.
Through the article on Pham Consult, we have learned more about new information with you. We hope this sharing will help your work.