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New tax dampens stock market trading
Trading on the stock market has been quiet since the Personal Income Tax Law came into effect.
Under the law, which came into effect on January 1, stock investors must pay either 0.1 percent of the value of each transaction or 20 percent on their net profit for the year.
According to the Ministry of Finance’s Circular No. 84, those who registered to pay 20 percent on the year’s net profit still have to pay 0.1 percent of each sale, with any excess tax paid to be refunded at the end of the year.
Brokerages said most of their clients opted to pay tax on each sale. Minh, an investor at a Ho Chi Minh City-based brokerage, said he registered to pay 0.1 percent on every sale because the other method was “too complicated”.
Monday, only 7.3 million shares changed hands, compared with the daily 2008 average of 11.8 million.
A new 5 percent tax on share dividends is causing the most concern for investors, not the 0.1 percent of every sale, said Truong Duy Khiem, branch director of ACB Securities Co.
Many brokerages offered special deals to their clients after the law came into effect. An Binh Securities Co. will pay its clients’ capital gains tax for the first three months of the year. Orient Securities Corp. will pay 80 percent of the tax on transactions worth VND5 billion (US$287,000) or more in a month.
For investors who registered to pay 20 percent on the year’s net profit, the HCMC -based brokerage will offer free advice on preparing for the tax payment.
TRICKY TAX
Many investors said they want to know how much they have to pay if they sell shares of one company at various prices at various times.
Tran Thi Le Nga, an official from the Ho Chi Minh City Tax Department, said investors who registered to pay 20 percent on the year’s net profit will have to keep detailed records of their stock transactions.
If they don’t, the tax will be calculated on average sales of that stock, she said.
thanhnien
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