On November 8, the General Department of Taxation issued Official Dispatch 5001/TCT-DNNCN in 2023 on determining the basis for calculating personal income tax on income from inheritance.
Specifically, the official dispatch of the General Department of Taxation guides the determination of the basis for calculating personal income tax (PIT) for income from inherited stocks.
Pursuant to Clause 26, Article 4 of the 2019 Securities Law, the securities trading system is explained as follows: The securities trading system includes the trading system for listed securities and the trading system for unlisted securities, organized and operated by the Vietnam Stock Exchange and its subsidiaries (hereinafter referred to as the Vietnam Stock Exchange and its subsidiaries).
Article 42, Clause 1 of the 2019 Securities Law organizes the securities trading market as follows:
Vietnam Stock Exchange and its subsidiaries are organized securities trading markets for securities eligible for listing.
Securities of state-owned enterprises, single-member limited liability companies in which state-owned enterprises hold 100% of charter capital converted into joint stock companies.
Securities of other enterprises not yet qualified for listing; securities of innovative start-up enterprises.
Derivative securities and other types of securities as prescribed by the Government.
Clause 35, Article 3 of Decree 155/2020/ND-CP explains that the Upcom trading system is a trading system for unlisted securities organized and operated by the Stock Exchange.
At point a, clause 9, Article 2 of Circular 111/2013/TT-BTC and Decree 65/2013/ND-CP stipulate that income from inheritance is securities as follows:
Income from inheritance is the income that an individual receives according to a will or according to the provisions of the law on inheritance, specifically as follows:
For inheritance of securities including: stocks, stock purchase rights, bonds, treasury bills, fund certificates and other types of securities as prescribed by the Law on Securities; shares of individuals in joint stock companies as prescribed by the Law on Enterprises.
Pursuant to Point a, Clause 1, Article 16 of Circular 111/2013/TT-BTC (amended in Circular 92/2015/TT-BTC), the basis for calculating personal income tax on income from inheritance and gifts is taxable income and tax rate.
Taxable income from inheritance and gifts is the value of inherited assets and gifts that exceeds VND 10 million each time. The value of inherited assets and gifts is determined for each case.
For inheritance and gifts in the form of securities: the value of the inherited assets is the value of the inherited assets or gifts exceeding VND 10 million, calculated on all received securities codes, excluding any expenses at the time of registration of ownership transfer.
For securities traded on the Stock Exchange: the value of securities is based on the reference price on the Stock Exchange at the time of registration of securities ownership.
For securities not falling into the above cases: the value of the securities is based on the accounting book value of the company issuing that type of securities at the time of preparing the most recent financial statement according to the provisions of the law on accounting before the time of registration of securities ownership.
Based on the above provisions, stocks traded on the Upcom trading system are stocks traded on the Stock Exchange. Therefore, the value of inherited assets being stocks traded on the Upcom trading system is determined according to the provisions at Point a.1, Clause 1, Article 16 of Circular 111/2013/TT-BTC.
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