Legal document newsletter week 15/01/2024
THE NATIONAL ASSEMBLY HAS PASSED A RESOLUTION ON THE APPLICATION OF ADDITIONAL CORPORATE INCOME TAX ACCORDING TO THE REGULATIONS TO COMBAT THE EROSION OF THE GLOBAL TAX BASE
On December 15, 2023, the Chairman of the National Assembly signed and promulgated Resolution No. 107/2023/QH15 of the National Assembly on the application of additional corporate income tax according to regulations on preventing global tax base erosion.
The resolution includes 8 articles and 1 appendix. Effective from January 1, 2024 and applicable from fiscal year 2024
1. Tax payers
Being a constituent unit of a multinational corporation with revenue in the consolidated financial statements of the Supreme Parent Company for at least 2 of the 4 years immediately preceding the fiscal year equivalent to 750 million euros (EUR) or more , except for the following cases: Government organizations; International organizations; Non-profit organization; Retirement; The investment fund is the ultimate parent company; The real estate investment organization is the ultimate parent company; Organizations with at least 85% of asset value owned directly or indirectly through the organizations specified above.
Along with clearly explaining relevant terms to ensure transparency and rigor in the application process, the Resolution stipulates: qualified domestic minimum additional corporate income tax ( QDMTT); aggregate minimum taxable income (IIR); declare, pay taxes and manage taxes.
2. Tax declaration, payment and tax management
2.1. For regulations on standard domestic minimum supplementary corporate income tax (QDMTT)
Deadline for submitting the Information Declaration according to the Global Minimum Tax Regulations, Additional Corporate Income Tax Declaration with Explanation for differences due to differences between financial accounting standards and additional Corporate Income Tax payment deadline no later than 12 months after the end of the fiscal year.
2.2. For regulations on minimum taxable income (IIR)
Deadline for submitting information declarations according to the Global Minimum Tax Regulations, Additional Corporate Income Tax Declaration with explanation of differences due to differences between financial accounting standards and additional Corporate Income Tax payment deadline No later than 18 months after the end of the fiscal year for the first year the multinational corporation is subject to application, no later than 15 months after the end of the fiscal year for the following years.
This is considered an important step for Vietnam to affirm the application of global minimum tax and officially participate in a large “playing field” in the world.
According to 2022 corporate income tax finalization data, the General Department of Taxation preliminarily calculates that there are about 122 foreign corporations investing in Vietnam affected by the standard domestic minimum supplement regulations and additional tax amounts. estimated to earn about 14,600 billion VND.
To date, more than 140 countries around the world will apply the global minimum tax from 2024, to collect the difference from the actual tax rate compared to the global minimum tax (15%), including the following: Countries with large amounts of investment capital in Vietnam such as Korea, Japan, Singapore…