Is stock transfer a capital transfer?

1. Is stock transfer a capital transfer?

Pursuant to Point d, Clause 8, Article 4 of Circular 219/2013/TT-BTC, capital transfer is understood as follows:

“d) Transfer of capital includes the transfer of part or all of the capital invested in another economic organization (regardless of whether or not a new legal entity is established), transfer of securities, transfer of capital contribution rights and other forms of capital transfer according to the provisions of law, including cases of selling an enterprise to another enterprise for production and business and the purchasing enterprise inherits all the rights and obligations of the selling enterprise according to the provisions of law”;

Pursuant to Clause 4a, Article 2 of Circular 111/2013/TT-BTC, income from securities transfer includes:

“4a. Income from securities transfer, including: income from stock transfer, stock purchase rights, bonds, treasury bills, fund certificates and other securities according to the provisions of the Securities Law; income from the transfer of shares of individuals in joint stock companies according to the provisions of the Enterprise Law”;

Thus, transferring shares is transferring capital.

2. Do I have to pay transfer tax when transferring shares?

Pursuant to Article 15 of Circular 78/2014/TT-BTC stipulating income from securities transfer as follows:

“Article 14. Income from capital transfer

1. Scope of application:

Income from securities transfer of an enterprise is income earned from the transfer of stocks, bonds, fund certificates and other types of securities according to regulations.

…

In case an enterprise transfers securities and does not receive money but receives assets or other material benefits (shares, fund certificates…) and generates income, it must be subject to corporate income tax. The value of assets, stocks, fund certificates… is determined according to the selling price of the product on the market at the time of receiving the assets.

2. Tax basis:

Taxable income from securities transfer in the period is determined by the selling price of the securities minus (-) the purchase price of the transferred securities, minus (-) the costs related to the transfer.

– The selling price of securities is determined as follows:

…

+ For securities of companies not in the following categories: In the above cases, the selling price of securities is the transfer price stated in the transfer contract.

– The purchase price of securities is determined as follows:

…

+ For securities purchased through auction, the purchase price of securities is the price recorded on the notice of winning share auction results of the organization conducting the share auction and the submission paper. money.

+ For securities not falling into the above cases: the purchase price of securities is the transfer price stated in the transfer contract.

– Transfer costs are actual expenses directly related to the transfer, with legal documents and invoices.

…

Enterprises have income from transferring securities. This income is determined as other income and declared as taxable income when calculating corporate income tax”;

Thus, income from securities transfer is determined as other income and declared as taxable income when calculating corporate income tax. Transfer of stock is subject to corporate income tax. 

3. Information on the invoice will include the following contents what?

In Clause 1, Clause 3, Article 4 of Decree 51/2010/ND-CP and the Government’s regulations on invoice content:

“ Article 4. Type, form and content of invoice

1. Invoices specified in this Decree include the following types:

a) Export invoice is an invoice used in business activities of exporting goods and services abroad, exporting into non-tariff zones;

b) Value-added invoice is an invoice for selling domestic goods and services for organizations and individuals declaring value-added tax according to the depreciation method except;

c) Sales invoice is an invoice for selling domestic goods and services for organizations and individuals declaring value-added tax using the direct method;

d) Other types of invoices, including: tickets, cards or documents with other names but with the form and content specified in Clauses 2 and 3 of this Article.

…

3. The invoice must have the following contents:

a) Invoice name, invoice symbol, invoice number, invoice copy name. For printed invoices, the name of the organization that printed the invoice must also be recorded;

b) Name, address, tax code of the seller;

c) Name, address, tax code of the buyer;

d) Name, unit of calculation, quantity, unit price of goods and services; into money without value-added tax, value-added tax rate, value-added tax amount in case of value-added invoice;

d) Total payment amount, buyer signature, seller signature, seller stamp (if any) and date, month, year of invoice.

The Ministry of Finance specifically stipulates that invoices do not need to have all the prescribed contents. in this clause.”