"When operating, a business will face various types of taxes. Typically, these include corporate income tax, value-added tax, personal income tax, and import-export tax. In addition, there are types of taxes that businesses often overlook, which are only discovered during tax audits, resulting in tax arrears and penalties.
TYPES OF TAXES THAT BUSINESSES OFTEN OVERLOOK
Special excise tax: often forgotten due to its small value.
Contractor tax: this tax is the responsibility of foreign contractors, but the declaration and payment are the responsibility of the payer, who often neglects it.
Corporate income tax on related transactions: businesses are not aware of their status as related parties in a transaction.
Additionally, through the audit process, AS Audit would like to mention the tax on capital transfer, which is a type of tax that many people often forget.
AN OVERVIEW OF PERSONAL INCOME TAX ON CAPITAL TRANSFER
Content 1: When is the capital transfer tax incurred?
The capital transfer tax is incurred when an organization or individual has income from transferring part or all of their contributed capital to one or more other organizations or individuals. (Including the sale of an entire business)
Content 2: How to determine the tax to be paid for capital transfer
The capital transfer tax has a tax rate of 20% on the profit gained from the transfer of capital.
Therefore, the formula for calculating the capital transfer tax of a business is:
Tax amount to be paid = (transfer price - purchase price of the transferred capital - transfer costs) x 20%
In which:
The transfer price is determined as the actual value that the transferor receives according to the transfer agreement.
In cases where the transfer agreement does not specify the payment price, or the tax authority has a basis for determining that the payment price is not appropriate according to the market price, the tax authority has the right to determine the transfer price.
The purchase price of the transferred capital is determined as follows:
If the capital contribution is transferred for the establishment of a business, the purchase price is the value of the contributed capital based on the accounting records and documents at the time of capital transfer. This should be confirmed by the participating parties in the investment or the result of an independent audit by a foreign-owned company.
If it is a repurchased capital, then the purchase price is the capital value at the time of purchase, which is determined based on the capital repurchase contract and payment documents.
Transfer costs are the actual expenses directly related to the transfer, with legitimate vouchers and invoices.
In addition, we need to note the personal income tax on income from securities transfer, including: income from stock transfer, stock purchase rights, bonds, certificates of deposit, fund certificates, and other types of securities. The tax calculation is based on the transfer price of securities each time, multiplied by the tax rate of 0.1%.
Content 3: Responsibilities for tax declaration and deduction:
If the seller is foreign and the buyer is in Vietnam, then the Vietnamese party is responsible for deduction and tax payment instead of the seller.
If both the seller and the buyer are foreign, and the Vietnamese enterprise has a stake in both the buyer and the seller, then the Vietnamese enterprise is responsible for deduction and tax payment instead of the seller.
In addition, the tax authority may collect capital transfer tax from the parent company with direct or indirect capital involvement with subsidiary companies in Vietnam.
Content 4: Deadline for declaration and payment of personal income tax on capital transfer
The deadline for declaring and paying capital transfer tax is the 10th day from the date the competent authority approves the capital transfer or the 10th day from the date of agreement on capital transfer in cases where approval is not required.
In summary, businesses or individuals involved in capital transfers should remember to:
Determine the obligation to declare and deduct capital transfer tax.
Determine the tax amount to be paid in each case.
Declare and pay taxes on time according to regulations.
