Securities transferors can choose the method of tax declaration and payment: (i) with a tax rate of 20% on income from securities transfer or (ii) a tax rate of 0.1% on the transfer price (Article 23 of the Law on Personal Income Tax). Although there are many opinions about the unreasonableness of applying the tax method of 0.1%/transfer price according to the Law on Personal Income Tax 2007, the Law on Personal Income Tax amended in 2012 does not have any amendments on this issue. The tax method of 0.1%/securities selling price is currently chosen by investors because they cannot accurately determine the costs incurred during the investment process to apply the tax method of 20%/total income.
In essence, the tax on securities transfer determined on the selling price is not consistent with the principle of income tax, which is to only tax individuals whose income reaches a certain threshold. The choice of the lump-sum tax method should only be considered a temporary solution to prevent loss of State budget revenue [20].
Therefore, the regulation of tax rate for each transfer is not consistent with the nature of personal income tax based on personal income. Tax should only be levied on the actual income of individuals based on revenue minus expenses.
The Personal Income Tax Law does not fully regulate the types of expenses that can be deducted in securities investment for individuals. The choice of applying a 20% tax on income from transfers to individual investors is not feasible due to the difficulty in determining the expenses incurred during the investment process. It can be seen that these shortcomings all stem from the fact that the law does not specifically regulate the types of expenses that can be deducted when determining the taxable income of individual investors.
Second , it is not feasible to include income from the transfer of housing, land use rights and assets attached to residential land of individuals in the case where the transferor has only one house in the tax-exempt income category. The impracticability lies in the lack of standards for what constitutes housing . The 2005 Housing Law stipulates: Housing is a construction for the purpose of residence and serving the living needs of households and individuals. Obviously, there are still no specific standards for housing standards.
technical standards to determine whether a building is a house or not. On the other hand, to verify that a person has only one residential land or house, the state agency must investigate. If it is within the scope of a province or city, it is not difficult, but if it is in different provinces or cities, it is quite complicated, time-consuming, and costly. If regulated like that, it will inadvertently lead to people asking others to stand in their names to avoid taxes, and this will create land and housing disputes. Therefore, income from the transfer of the right to use residential land, houses, and assets attached to the only land is still subject to tax.
Determining the price of land use rights must be based on market principles as with other real estates, and the Government needs to have specific regulations guiding the determination of transfer prices in cases where the transfer price stated in the contract is lower than the common price on the market.
Third , the distinction between residents and non-residents should only be limited to determining tax administrative procedures, not distinguishing tax obligations, because it will not ensure equality between residents and non-residents for the provision of irregular income. Therefore, except for regulations to ensure tax obligations for income arising in Vietnam of non-residents, it is necessary to be equal to that of residents. Besides, in terms of legislative techniques, if the taxation of residents and non-residents is the same, there is no need to stipulate repeatedly, making the legal document lengthy, just quoting in one article is enough.
Fourth , there needs to be a regulation on the basis of tax calculation for non-resident individuals. This is also a difficult problem if we do not have a mechanism to manage this subject. We know that the management of administrative order by the Ministry of Public Security on the issue of household registration and civil status only provides numbers controlled by declarations, while the current reality in the localities is very difficult (for example, currently there are some people from different localities who are trading how much, the sophisticated form of trading that we currently do not understand). This is also the next solution for the need to have a clear, transparent legal mechanism and create conditions for the implementation of regulations on personal income tax.
Fifth , it is necessary to supplement regulations on inspection and control of irregular income. Only then will the Personal Income Tax law on irregular income be effective. Inspection and control is an essential step in implementing Personal Income Tax on irregular income.
Sixth , specify legal sanctions for taxpayers or agencies, organizations and individuals with tax collection authority who violate the provisions of the Law. Thereby, taxpayers will be clearly aware of the legal consequences they will have to bear if they violate their tax obligations. From there, increase the responsibility to pay personal income tax.
CONCLUSION OF CHAPTER 3
From studying the current status of personal income tax management laws in relation to income tax management laws in a number of countries around the world, the following recommendations can be drawn:
1. Each country, depending on the socio-economic conditions at specific stages, builds its Personal Income Tax Law. Building a complete and appropriate substantive law will create conditions for the formal law (Tax Administration Law) to maximize management efficiency.
2. Completing the provisions of the law on personal income tax management in general in determining the subjects of personal income tax, managing family deductions, the mechanism for self-declaration and self-payment of tax, managing taxpayer information, the time limit and method of declaring income tax, and organizing income tax management. In addition, there are some recommendations to complete the provisions of the law on some specific types of income from wages, salaries or irregular income.
GENERAL CONCLUSION
According to economic experts, Vietnam's economy will continue to have high growth, with an increasingly open economic policy and mechanism system that facilitates investment, production and business development, the number of people with high income will increase rapidly, there will be tens of millions of people with income subject to personal income tax. This is a major challenge for tax management in general and personal income tax management in particular.
Tax administration in general and personal income tax administration in particular are broad and complex issues, influenced by many different factors. Therefore, to improve the effectiveness of personal income tax administration, it is necessary to pay attention to synchronously innovating the elements in the tax administration system and tax administration environment.
From the perspective of the current situation of personal income tax management laws in Vietnam as well as the experience of personal income tax management in some countries around the world, we need comprehensive solutions, combining the improvement of tax management laws, personal income tax laws and other related legal systems.
LIST OF REFERENCES
I. VIETNAMESE
2. Le Van Ai, Do Duc Minh, Nguyen Mai Phuong (2002), Personal income tax in the world and application orientation in Vietnam, Finance Publishing House, Hanoi. |
3. Electronic Labor Newspaper (October 12, 2007); "Who pays the highest taxes in Vietnam?" website: http://www.laodong.com.vn/Home/Ai-nop-thue-cao-nhat- VN/20073/25372.laodong (accessed 03/07/2014) |
4. Vu Van Cuong (2009), “Information about taxpayers in tax management law Taxation in our country today", Journal of Law , (4), Hanoi. |
5. Vu Van Cuong (2012), Tax management law in the market economy in Vietnam - theoretical and practical issues , PhD thesis in law, Hanoi Law University, Hanoi. |
6. National Economics University (2008), Tax Management Textbook , Statistical Publishing House, Hanoi. |
7. Nguyen Thi My Dung (2012), “Tax management in Vietnam: improvement and innovation” “New”, Development and Integration, (7-17), pp.44-46, Hanoi. |
8. Dang Tien Dung (2003), "Understanding the concept of management and tax administration", Journal of State Tax News , (12), pp.18-20, Hanoi. |
9. Vu Manh Ha (2008), Some issues on personal income tax in Vietnam , Thesis Bachelor of Public Finance and Taxation, Academy of Finance, Hanoi. |
10. Tran Vu Hai (2007), “The current status of personal income tax law in Vietnam Current situation and directions for improvement", Journal of Law, (10), Hanoi. |
11. Thu Hang (September 10, 2013), “Hanoi: Tightening personal income tax management”, website: http://www.baohaiquan.vn/pages/ha-noi-siet-chat-quan-ly-thue-thu- nhap-ca-nhan.aspx (accessed June 23, 2014). |
12. Nguyen Hien (October 26, 2012), "Income of 9 million VND/month does not have to pay tax" personal income”, website: http://dantri.com.vn/nghe-nghiep/thu-nhap-9-trieu-dongthang-chua-phai-nop-thue-tncn-655874.htm (accessed June 26, 2014). |
Maybe you are interested!
-
Legal Status on Supervision and Ensuring Legal Compliance in Personal Income Tax Management -
Law on Corporate Income Tax Management -
Personal income tax law from practice in Thai Binh province - 11 -
Implementing the application of personal income tax law in Vietnam - 15 -
Tax Administration Law on Tax Audit, Tax Inspection and Handling of Violations of Personal Income Tax Law
14. Hoang Thi Hue (2009), Law on personal income tax management for Irregular income , Bachelor of Law Graduation Thesis K30, Hanoi Law University. |
15. Nguyen Thi Thuong Huyen (2008), “Tax Administration Law and issues that need to be addressed” further discussion”, Legislative Studies, (19), pp.51-54, Hanoi. |
16. Pham Huyen (August 1, 2012), "CPI increases by over 20%, personal income tax will be revised further" “Nhan”, website: http://vietnamnet.vn/vn/kinh-te/vef/82964/cpi-tang-tren-20-- se-sua-tiep-thue-tncn.html (accessed June 22, 2014). |
17. Ho Mai Huong (2007), Personal Income Tax Policy in Vietnam in context of international economic integration , Master's thesis in economics, National Economics University, Hanoi. |
18. Nguyen Thi Lan Huong (2011), “Prioritizing taxpayers' interests when amending Law on Personal Income Tax”, Legislative Research, (14/199), pp.34-37, Hanoi. |
19. Nguyen Thi Lan Huong (2012), “Amending the Law on Tax Administration to regulate rights and interests between the State and taxpayers", Legislative Research , (9/217), pp. 26-29, Hanoi. |
20. Nguyen Thi Lan Huong (2014), “Philosophy of taxation on income from ownership and transfer of securities and recommendations for improving the law”, Journal Legislative research , (4/260), pp. 33-35, Hanoi. |
21. Nguyen Thi Lan Huong (2013), “On protecting taxpayers' rights in Law on Tax Administration”, Journal of Science, Hanoi National University , Law, (1), pp.42–50, Hanoi. |
22. Nguyen Thi Lan Huong (2012), “Factors affecting the formation of consciousness compliance with tax laws ”, Journal of Law , pp. 26-28, Hanoi. |
23. Vuong Hoang Long (2000), Perfecting the organization of the tax sector in the new conditions Multi-sector commodity economy , PhD thesis in economics, National Economics University, Hanoi, p.11, Hanoi. |
and its implementation in Vietnam , Master's thesis in Political Economy, University of Economics, Hanoi.
24. Pham Thi Phuong Mai (2008),25. Nguyen Trong Nghia (with Trinh Ha Mai Long, Ho Thi Hang, Nguyen Thi Viet Anh, Dang Cong Khoi, Nguyen Van Tung), (July 13, 2012), Tax Administration Law of the Government's Coordinating Council for Legal Dissemination and Education , website: http://luatminhkhue.vn/tieu-thu/luat-quan-ly-thue-cua-hoi-dong-phoi-hop-cong-tac-pho-bien,-giao-duc-phap-luat-cua-chinh-phu.aspx (accessed June 25, 2014). |
26. Nguyen Duc Ngoc (2007), Some issues on the effectiveness of the Tax Administration Law in its role of ensuring stable state budget revenue in the current economic period in Vietnam. Vietnam , School-level scientific research topic, Hanoi Law University. |
27. Le Thi Kim Nhung (2011), “Personal income tax after 2 years of implementation: A "Arose problems and solutions", Banking Magazine , (4), Hanoi. |
28. Nguyen Thanh Phuc (2013), “Improving the efficiency of personal income tax management activities "Salary and wages", Development and integration, (13/23), pp. 7-10, Hanoi. |
29. National Assembly (2006), Law on Tax Administration , Hanoi |
30. National Assembly (2012), Law amending and supplementing a number of articles of the Law on Tax Administration, Hanoi. |
31. National Assembly (2007), Law on Personal Income Tax, Hanoi |
32. Le Thi Thu Thuy (2009), “Issues arising in the implementation of the Law on Personal Income Tax” “Individual Income in Vietnam”, Journal of Law , (4), pp. 28-29, Hanoi. |
33. Tran Kieu Thuy (2014), Some legal issues on tax management for individuals with income Import from business , Graduation thesis, Faculty of Law - Vietnam National University, Hanoi, Hanoi. |
34. Nguyen Thi Le Thuy (2009), Perfecting the State's tax collection management to enhance tax compliance of enterprises , PhD thesis in economics, National Economics University, Hanoi. |
35. General Department of Taxation (2005), Survey report on tax reform in Australia , Hanoi Website: http://www.gdt.gov.vn/gdtlive/Trang-chu/Tin-tuc/News?contentId=110846 (accessed March 2, 2005). |