Amending regulations on the time of tax declaration and payment on behalf of individuals receiving dividends and bonuses in form of securities

Ministry of Finance has amended and supplemented regulations on declaring tax on behalf of individuals who receive dividends or receive bonuses in form of securities.

According to the Ministry of Finance, several regulations in Decree No. 126/2020/ND-CP currently cause difficulties for taxpayers. Accordingly, about the time when making tax declarations on behalf of individuals who receive dividends or receive bonuses in securities.

Specifically, at point d.1, clause 5 Article 7 Decree No. 126/2020/ND-CP stipulates the organization of tax declaration and tax payment on behalf of individuals who receive dividends in the form of securities and individuals who are existing shareholders receive bonuses in the form of securities. This new regulation facilitates securities investors and ensures the timely collection of taxes arising into the state budget.

To implement this regulation, securities companies have built information technology application software to track the income of individual investors for tax deductions. However, up to now, the software development of securities companies has not been completed, so to help securities companies to be eligible to meet the requirements of declaring and paying taxes on behalf of individuals specified in Decree No. No. 126/2020/ND-CP, it is necessary to amend to delay the application period of point d.1 Clause 5 Article 7 of Decree No. 126/2020/ND-CP.

Therefore, in the draft Decree amending Decree No. 126/2020/ND-CP that the Ministry of Finance is consulting has supplemented Clause 4, Article 43 of Decree No. 126/2020/ND-CP to stipulate the organization of tax declaration and tax payment on behalf of individuals receiving dividends in the form of securities, individuals being existing shareholders receiving bonuses in the form of securities has been implemented since January 1, 2023. From the effective date of Decree No. 126/2020/ND-CP (December 5, 2020) to the end of December 31, 2022, individuals who declare and pay personal income tax will not be sanctioned for administrative violations of late submission of tax declaration dossiers. No late payment interest shall be charged.

In addition, another provision in Decree No. 126/2020/ND-CP that taxpayers are facing difficulties with is the personal income tax declaration of organizations and individuals that do not incur a deduction of personal income tax. Specifically, according to the provisions of Clauses 1 and 2, Article 8 of Decree No. 126/2020/ND-CP, organizations and individuals that pay incomes from salaries and wages are responsible for declaring tax and paying tax on behalf of individuals monthly or quarterly. However, Decree No. 126/2020/ND-CP does not stipulate that in case income is paid, it does not incur tax deductions of individuals, whether income-paying organizations or individuals must declare tax on behalf.

Therefore, according to the Ministry of Finance, it is necessary to supplement the provision that if the personal income tax deduction is not incurred, income-paying organizations and individuals do not have to declare tax for clarity in the implementation.

To overcome these problems, the draft Decree amending and supplementing Decree No. 126/2020/ND-CP has added point e, Clause 3, Article 7 of Decree No. 126/2020/ND-CP stipulating the case of organizations and individuals that do not incur personal income tax deduction are not required to submit a dossier of personal income tax declaration.