Income Tax on Securities and Real Estate Transfer Reached

According to the current Law on Personal Income Tax (PIT), (in effect through December 31, 2014), individuals can choose one of two methods of tax payment for securities and real estate transfer. In case they transfer their real estate with full proofs of cost price and related costs, the tax rate shall be 25 percent on income from real estate transfer or it shall be 2 percent in case they are ineligible for the first option. For securities transfer, the tax rate shall be 20 percent on annual income if the cost price is defined. Otherwise, the rate shall be 0.1 percent on separate transfer value.

 

There is a certain differential in tax amount between the two methods while it is complicated to have sufficient proofs to be imposed the tax rate on incomes. Therefore, to boost policy transparency, to ensure justice in the exercise of taxpayers’ tax obligations, to avoid problems in the implementation of tax procedures, Law 71/2014/QH13 on amendments and supplements to a number of articles of tax laws passed by the 13^th National Assembly on November 26, 2014 on incomes from the transfer of real estate and securities, only one method of calculating income tax is applied: Tax on separate transfer value instead of two methods previously. Accordingly, the tax rate on real estate transfer is 2 percent on each transfer value and the rate on securities transfer is 0.1 percent on each transfer value.

 

Taxpayers shall not necessarily finalise personal income tax from these acts.