In this newsletter, Grant Thornton Vietnam would like to update the highlights of Circular 23/2024/TT-NHNN (effective from August 12, 2024), which regulates indirect overseas investments, specifically concerning offshore-issued ESOP
Principles of Implementation:
- Only be implemented through an organization implementing the offshore-issued ESOP
- Foreign currency earned from dividends and other legal income must be transferred via a separate account serving execution of ESOP.
- Compliance with regulations on foreign exchange management, income tax obligations, and other legal requirements.
Rights of employees with Vietnamese nationality:
- Participate in ESOP under the conditions set by foreign organization and in compliance with Vietnamese law.
- Receive foreign currencies earned from stock dividends and other legal income as per regulations.
New points compared to Circular 10/2016/TT-NHNN:
- Expand the object implementing ESOP
- Remove the requirement for registration confirmation from the State Bank of Vietnam before implementing the offshore-issued ESOP.
- Add other forms of offshore-issued bonus share that do not result in cash outflows.
- Remove certain rights related to purchasing stock awards and using foreign currency for Vietnamese employees.
- Change the periodic reports with organizations implementing offshore-issued ESOP.
Obligations of employees receiving offshore-issued bonus share
Employees receiving stock bonuses through offshore-issued ESOP are required to declare personal income tax (PIT) for:
- Income from wages and salaries of the stock granted;
- Income from stock transfer;
- Income from capital investment.
Services related to offshore-issued bonus share that GT can provide:
- Consulting services on tax obligations arising from offshore-issued ESOP;
- Assistance with PIT declaration and payment for income related to ESOP;
- Statistical reporting to the State Bank of Vietnam on the performance of ESOP by implementing companies;
- Other related advisory services.
