Enhanced income tax management on stock dividends
Enhanced income tax management on stock dividends
The General Department of Taxation has recently issued a directive urging the Tax Departments of provinces and centrally-controlled cities to strengthen the management of personal income tax of existing shareholders receiving stock dividends and payments in the form of bonus shares.
Investors watch stock information at the headquarters of the Hồ Chí Minh Stock Exchange (HoSE). — VNA/VNS Photo |
The aim is to ensure that these shareholders fulfil their tax obligations.
Organisations responsible for tax declaration and payment on behalf of individuals must understand their obligation to disclose and pay personal income tax on profits from investment capital when individuals transfer shares of the same type, as per laws.
These organisations include securities companies, commercial banks engaged in securities depository activities, fund management companies and securities issuers.
Their obligations to declare and pay taxes on behalf of individuals commence on January 1, 2023, for income from investment capital resulting from the transfer of shares of the same type.
For individuals who have not yet declared or had taxes declared and paid on their behalf by organisations for shares recorded in securities accounts prior to December 31, 2022, the Tax Department will provide guidance on tax declaration.
It also notes that the timelines for compliance will follow the provisions stated in the Tax Administration Law.
The General Department of Taxation suggests that tax authorities develop appropriate communication plans to inform individuals receiving stock dividends and organisations handling tax filing on their behalf.
The department has provided guidelines on declaring and paying personal income tax on stock dividends, which should be shared with relevant organisations and individuals for compliance.
