return icon

Investors and securities firms struggle with tax

 VietNamNet Bridge – Investors and securities firms are struggling with two taxes the Government imposes on their bonus shares, Dau tu chung khoan (Securities Investment) newspaper reported earlier last week.

VietNamNet Bridge – Investors and securities firms are struggling with two taxes the Government imposes on their bonus shares, Dau tu chung khoan (Securities Investment) newspaper reported earlier last week.

Investors are the ones being directly affected by the tax policies. Under the Law on Individual Incomes, shareholders have to pay two taxes for their bonus shares. One of the two is equal to 5 per cent of the share value when investors receive bonus shares as dividends, and the other is 0.1 per cent of the total trading value when those shares are sold.

These taxes reduce investors' benefits or profits, and they could lead to unfairness between securities firms, as some of them only collect taxes from their clients' trading activities.

At the moment, shareholders have two problems. First, they still have to pay taxes, even when they suffer losses from trading shares. Second, receiving bonus shares for dividends will cost shareholders more in taxes than receiving cash for dividends if they exchange bonus shares for cash.

Investors said they should be charged one tax instead of two when they received bonus shares for dividends, and the Government should not impose taxes on them when they sell bonus shares on the market.

They said removing a tax would help reduce the gap between securities investment and other sectors in which investors pay less or no taxes for their activity, including the banking sector.

On the other hand, securities firms have to deal with more challenging problems – they have to deal with both clients and Government agencies.

According to the General Department of Taxation, a company doesn't have to collect taxes from bonus shares when they pay them to shareholders as dividends. But the company must collect two taxes from investors when they sell their bonus shares.

The problem for securities companies arises when investors don't accept that they have to pay two taxes on a single transaction.

Investors also question their brokers, accusing them of too strictly following the rules while other brokerage firms skirt them, making their investors pay only one of the taxes.

Thus, those firms that follow the rules are facing complaints from their clients, who feel they're getting fewer benefits.

Nhu Dinh Hoa, director general of Bao Viet Securities Joint Stock Company (BVSC), said the securities market could decrease, making such tax policies discouraging for investors and securities firms.

He said listed companies had already paid individual income taxes when they paid dividends to shareholders. This meant it was unreasonable to collect more taxes from shareholders' bonus shares.

If companies paid bonus shares from their capital surplus, which is created when the company issues shares at higher than face value, investors wouldn't have to pay taxes for those bonus shares because the company only returned the initial investment to shareholders, he said.

If the securities firms could not distinguish bonus shares from initial shares, they would be unable to collect taxes from trading activities between investors, Hoa said. In addition, investors could avoid paying taxes by changing their accounts from one brokerage firm to another after receiving bonus shares.



Experts warn Vietnamese banks of risks following US banks’ collapse

If bond issuers fall into insolvency, the price of bonds could fall to zero, creating a high risk for banks.

Hanoi to resume tourism services on West Lake

Hanoi may resume 12 tourism services on the West Lake including boat transportation, after six years of suspension.

Car imports from Thailand still hold largest market share in Vietnam

Thailand once again led the market in terms of value and the number of CBU (complete built unit) cars imported to Vietnam in February 2023.

Deputy PM holds bilateral meetings on sidelines of UN 2023 Water Conference

Deputy Prime Minister Tran Hong Ha had bilateral meetings with many foreign leaders on the sidelines of the UN 2023 Water Conference, which is taking place in New York from March 22-24.

Vietnam temporarily suspends import, circulation of 15 types of medicines

The Drug Administration of Vietnam (DAV) under the Ministry of Health (MoH) has just issued an official dispatch on suspending the import, distribution, circulation and use of 15 types of medicines produced by Arena Group S.A. of Romania.

EVN urged to negotiate with renewable energy investors to fix electricity price

The Ministry of Industry and Trade has urged the Electricity of Vietnam (EVN) and investors of transitional solar and wind plants to negotiate and agree to fix electricity prices before March 31.

Two arrested in 11kg drug transport from France to HCM City case

The Ho Chi Minh City Department of Public Security has just arrested two people involved in the case of transporting over 11 kilograms of narcotics and ecstasy from France to Tan Son Nhat International Airport, Vietnam.


Renowned Vietnamese artists collaborate on unique porcelain artworks


Dragon fruit export turnover reaches 47 million USD

Boxer beats Spainish rival to advance to World Championship’s semifinals

Vietnamese boxer Nguyen Thi Tam trounced Spanish rival Laura Fuertes 5-0 in the women's light flyweight category to advance to the semifinals of the IBA Women’s World Boxing Championships in New Delhi.

Ministry of Health warns of possible outbreaks of dangerous diseases

In its yesterday’s official dispatch to people's committees of provinces and cities on organizing the implementation of the 2023 epidemic prevention plan, the Ministry of Health warned of possible outbreaks of dangerous diseases.

Another enterprise issues bonds, real estate bonds increase in value

A real estate firm has successfully raised funds by issuing VND4.7 trillion worth of corporate bonds. Just days before, another real estate firm also successfully issued VND2.3 trillion worth of bonds.

Stock market violations to face stricter sanctions

The State Securities Commission (SSC) will review the Law on Securities and related decrees to complete the legal framework, and strengthen sanctions for violations to protect the legitimate rights and interests of investors.

Association calls for pilot implementation of battery-powered taxis

The Hanoi Taxi Association is urging for the pilot implementation of battery-powered cabs to reduce environmental impact and stay abreast of global trends.

Vietnam strives to eliminate malaria once and for all

The Ministry of Health has announced plans to review, amend, and supplement professional guidelines to ensure nationwide implementation and assess the National Strategy for Malaria Prevention, Control, and Elimination by 2020.