Vietnam banks to apply 5pct tax to gold CDs

Depositors in the form of gold deposit certificates shall be subject to personal income tax of 5 percent. This incident has arose surprise to many people. Meanwhile, many banks are embarrassing with where to be applicable, where not.

Under the new rules, commercial banks are allowed to only raise capital in gold by issuing gold deposit certificates.

VietA JS Commercial Bank (VietA Bank) has announced the deduction of personal income tax (PIT) at 5 percent of the profits that buyers of gold deposit certificates received under the provisions of Circular 84.

Pham Duy Hung, general director of VietA Bank, said that on October 29, the State Bank of Vietnam issued Circular 22 stipulating that the banks are only allowed to raise capital in gold by issuing gold deposit certificates. Buyers of this certificate are seen as a form of capital investment, thus subject to personal income tax of 5 percent on interest as prescribed. So before paying interest to customers, banks will have to deduct 5 percent to pay the tax agency.

According to Hung, those who send gold as savings are still entitled to receive full interest.

According to SBV’s figures, so far the banking system has reached 92.6 tonnes of gold (equivalent to 73 trillion dong). When the gold amount matures, if customers want to send back in the form of gold deposit certificates to banks, they will be subject to personal income tax of 5 percent on the amount of interest.

General director of HCM City Housing Development JS Bank (HD Bank) Nguyen Huu Dang confirmed that his bank has already deducted tax of buyers’ certificates of deposit in gold since November after consulting the opinion of HCM City Tax Department.

“Until now, banks have still mobilised gold in the form of gold deposit certificates, but the part of the tax is taken by banks. But, in future, buyers of gold CDs will be subject to 5 percent tax, so the interest will be reduced respectively, ” Dang said.

While many other banks, such as East Asia, ACB, and Eximbank do not follow this clause. general manager of a bank said, his bank “is studying” to apply this provision because he wondered if the tax collection in gold deposit certificates, he does not know how to handle the interest from certificates of deposit or promissory notes in dong, US dollar. – TBKTVN

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices