Thuế khi trả lại vốn góp – Paying back owner capital

The tax implications when returning capital contributions to individuals in Vietnam depend on whether there is an increase in the value of the contributions and specific regulations regarding personal income tax related to capital investment and capital transfer. Specifically:

Personal Income Tax on Capital Investment:

When an individual withdraws capital contributions from a company, they only need to pay personal income tax (PIT) on the portion that has increased in value compared to the initial contribution. If the returned capital is equal to or less than the original contribution’s value, no PIT is required. This applies in cases where the company incurs losses, and the individual receives back their capital without any increase in value compared to the initial contribution.

Tax Calculation Basis: The tax calculation basis for income from capital investment includes taxable income and tax rates. The tax rate for income from capital investment is determined based on the progressive tax rate, with a rate of 5%.

Reference Document: Reference to Official Letter No. 56317/CT-TTHT

Based on the above regulations, in the case of Company …, if it decides to reduce its charter capital, the company must comply with the provisions of the Enterprise Law. In cases where a portion of the capital contributions is returned to shareholders, and there is an increase in the value of the capital contributions compared to the initial capital, this increase is subject to personal income tax as income from capital investment.

Tax Declaration Documentation:

Tax declaration documentation for personal income tax (PIT) from capital investment in Vietnam typically includes the following elements:

For detailed and up-to-date information on tax declaration forms and specific instructions, you should refer directly to official sources or contact the local tax authorities.

Legal Basis:

In accordance with the provisions of Article 68, Clause 3 of the 2020 Enterprise Law, it states: Increase or decrease of charter capital

…3. A company may reduce its charter capital in the following cases:

a) Partially return capital contributions to members in proportion to their capital contributions to the company’s charter capital if the company has been conducting continuous business operations for at least 02 years from the date of business registration and has ensured the full repayment of debts and other property obligations after returning to the members.