ANTD.VN - The global minimum tax regulations are expected to apply from early 2024. To ensure effective implementation and avoid errors, the General Department of Taxation encourages businesses to work with tax authorities to provide specific information about the business.
The General Department of Taxation has just sent an open letter to the business community regarding the application of additional corporate income tax under regulations to combat global tax base erosion.
According to the General Department of Taxation, on October 8, 2021, the Organization for Economic Cooperation and Development (OECD) issued a statement on the Two-Pillar Framework to address challenges arising from the digital economy , in which the Second Pillar sets a global minimum corporate tax rate of 15% for multinational corporations with revenues in the consolidated financial statements of the ultimate parent company of at least 2 years in the 4 consecutive years preceding the fiscal year equivalent to EUR 750 million or more (Global Minimum Tax Regulation).
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Global minimum tax expected to apply from early 2024 |
Currently, countries with foreign investment capital will basically apply the Global Minimum Tax Regulation from 2024 to collect additional taxes, including countries and territories that currently have large investment capital in Vietnam such as Korea, Japan, Singapore...
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 group) of Vietnam 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.
This Resolution is expected to take effect from January 1, 2024, applicable from fiscal year 2024, and will directly affect the rights and obligations of businesses subject to application.
Therefore, to ensure effective implementation of global minimum tax regulations, protect the rights and interests of enterprises, and avoid errors in the process of declaring and paying taxes according to regulations, the General Department of Taxation encourages enterprises to exchange and work with the tax authority directly managing them, and provide specific information about the enterprise.
Specifically, with the Group's operating and ownership model: For companies belonging to the Group with a parent company abroad, information on: name of the parent company, country of the parent company, other member companies of the same group in Vietnam;
For companies belonging to a group with a parent company in Vietnam, provide information on the countries in which the group has investment activities, member companies in each country, and the ownership ratio in each member company.
In addition, the General Department of Taxation also requested businesses to provide information on applicable financial accounting standards; revenue, income, tax payable, value of tangible assets, wages, etc. necessary to estimate the impact of the Global Minimum Tax Regulation.
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