Bac Giang sends document to FDI enterprises about Global Minimum Tax

An industrial park in Viet Yen, Bac Giang. Photo: Nguyen Ke.

Specifically, according to the Bac Giang Provincial Tax Department, on October 8, 2021, the Organization for Economic Cooperation and Development (OECD) issued a statement on the Two-Pillar Solution Framework to address challenges arising from the digital economy.

The second pillar sets a global minimum corporate tax rate of 15% for multinational corporations with consolidated parent company revenue of at least 2 of the 4 years immediately preceding the fiscal year equivalent to EUR 750 million or more (Global Minimum Tax Regulation).

Currently, countries with foreign investment capital will basically apply the Global Minimum Tax Regulation from 2024 to collect additional taxes, including economies with large investment capital in Vietnam such as Korea, Japan, Hong Kong (China), Singapore, etc.

Countries receiving foreign investment capital similar to Vietnam are also researching to come up with response policies, and at the same time studying some financial support solutions to retain foreign-invested enterprises subject to the Global Minimum Tax Regulation and attract new investors.

In case Vietnam does not apply the Global Minimum Tax Regulation, it must still accept the application of the Global Minimum Tax by other countries and has the right to collect additional taxes on enterprises in Vietnam or member companies of the Vietnamese Group abroad (if applicable) that are enjoying an actual tax rate lower than the global minimum rate of 15%.

In the above context, to ensure the legitimate rights and interests of Vietnam, the General Department of Taxation is submitting to the Ministry of Finance, the Government, and the National Assembly to issue a Resolution on the application of additional corporate income tax according to regulations against global tax base erosion.

Accordingly, in order to promptly inform FDI enterprises in Bac Giang province about a new tax policy, applied for the first time globally in general and in Vietnam in particular, the Bac Giang Provincial Tax Department has sent enterprises an Open Letter on the application of additional corporate income tax according to the regulations against global tax base erosion and the draft Resolution expected to take effect from January 1, 2024, applied from the 2024 fiscal year.

"If you encounter any problems during the policy research process, we recommend that businesses directly contact the Inspection and Examination Department that directly manages your business or the Taxpayer Support and Propaganda Department for support and answers," said the Bac Giang Provincial Tax Department.

Source: https://laodong.vn/kinh-doanh/bac-giang-gui-van-ban-den-doanh-nghiep-fdi-ve-thue-toi-thieu-toan-cau-1270057.ldo