HCMC – The Ministry of Finance is reviewing a proposal to change how personal income tax is applied to securities transactions to address concerns over losses.
Under the current rules, a 0.1% tax is levied on the sale price of each share transaction, regardless of whether the seller makes a profit or a loss. The policy has been criticized as unfair and inconsistent with standard taxation principles, which typically tax net income.
In a report on personal income tax reform, the ministry acknowledged these concerns and suggested adjusting the tax structure. The proposed changes would apply taxes only to gains, aligning with international practices.
The ministry defended the current system, citing simplicity and transparency. It noted that the flat 0.1% tax minimizes the administrative burden for both taxpayers and tax authorities.
Previously, investors could opt for a 20% annual tax on net income if they could document costs and purchase prices. However, in cases where such documentation was unavailable, the 0.1% tax per transaction was mandatory.
Critics argue the system penalizes active traders since taxes on losses cannot be reconciled at year-end. This results in higher tax obligations for frequent transactions.
The proposed revisions are part of broader efforts to draft a new personal income tax law. The ministry aims to encourage fairer taxation, support legitimate income growth, and ensure compliance with international standards.
The new law will seek to address economic development needs while maintaining the income redistribution goals of Vietnam’s tax system.
