Announcement regarding information declaration and tax obligation fulfillment for personal income tax on bonus shares and ESOP shares

Pursuant to Decree No. 253/2026/ND-CP, effective from July 1, 2026, which provides detailed regulations on the implementation of the Law on Personal Income Tax (PIT); Japan Securities Co., Ltd. (JSI) would like to respectfully inform our Clients regarding the information declaration and fulfillment of PIT obligations for bonus shares awarded to employees and shares issued under employee stock ownership plans (ESOP) as follows.

1. Regulations on PIT obligations

According to Point a, Clause 3, Article 50 of Decree No. 253/2026/ND-CP:

- In the event that an employee receives shares as a bonus or purchases shares at a preferential price under an employee stock ownership plan, the individual is required to pay PIT on income from salaries and wages when transferring such shares. In addition, when transferring the shares, the individual is also subject to tax on income from securities transfers in accordance with applicable regulations.
- The securities company where the individual opens a depository account is responsible for separately monitoring the individual’s bonus shares and ESOP shares, and for withholding and remitting tax at a rate of 10% of the taxable income arising from such bonus shares and ESOP shares.

2. Timing of tax payment & Basis for determining taxable income

Content	Key Regulations
Timing of Tax Payment	At the time of receiving bonus shares or ESOP shares, individuals are not yet required to pay PIT. When receiving income from the transfer of these shares, individuals must pay PIT. In the case of transferring shares of the same type, PIT shall be paid sequentially until the entire number of bonus shares and ESOP shares is exhausted.
Basis for Determining Taxable Income	The amount paid to the employee recorded in the accounting books of the issuing organization at the time of issuing bonus shares or ESOP shares. In cases where this amount cannot be determined, the taxable income is calculated as follows:
*Bonus Shares*	*Taxable Income = Number of shares received × Par value.* If the transfer price is lower than the par value, the taxable income shall be calculated based on the market price at the time of transfer.
*ESOP Shares*	*Taxable Income = (Number of shares received × Par value) − Amount paid by the employee to purchase the ESOP shares.* If the result is negative, no PIT on income from salaries and wages shall be incurred for that portion of ESOP shares.

3. Clients’ responsibility for declaration and information provision

Individuals receiving bonus shares or ESOP shares are responsible for fully and accurately declaring information regarding the origin and actual value of the shares currently deposited at JSI, as well as depository transactions and transfers into securities accounts at JSI generated from July 1, 2026, according to the following instructions:

(1) Balance declaration

- Please click here to open the link and declare directly.
- JSI will maintain separate records of the number of bonus shares and ESOP shares, and perform tax withholding and remittance as regulated.

(2) Declaration deadline

- For balances deposited as of July 1, 2026: No later than September 30, 2026.
- For depository/transfer transactions of bonus shares/ESOP shares into JSI: Declaration must be made on the date the transaction occurs.

4. Key notes for valued clients

- The provision of information to JSI does not substitute the Client’s obligation to declare and finalize taxes in accordance with legal regulations. JSI will fulfill its responsibilities based on the information provided by the Client.
- In cases where the Clients need to determine specific tax obligations, JSI respectfully requests Clients to proactively consult with professional experts or competent tax authorities for guidance and compliant execution.

JSI sincerely appreciates the cooperation of our valued Clients.

– Japan Securities Co., Ltd.-