Chairman of the NA's Finance - Budget Committee Lê Quang Mạnh presented a resolution on applying additional corporate income tax in line with the Global Anti-Base Erosion Rules (global minimum tax) at the National Assembly session on Wednesday. — VNA/VNS Photo Doãn Tần
With more than 93 per cent of votes in favour, the National Assembly (NA) on Wednesday approved a resolution on applying additional corporate income tax in line with the Global Anti-Base Erosion Rules (global minimum tax).
Under this resolution that takes effect on January 1, 2024, a global minimum tax rate of 15 per cent will apply to multinational enterprises (MNEs) with revenue exceeding 750 million euros (about US$800 million) or more in two of the four consecutive years. Investors subject to the tax will have to pay the global minimum tax in Việt Nam.
It is estimated that about 113 MNEs in Việt Nam will be affected by the global minimum tax.
At the National Assembly session on Wednesday, chairman of the NA's Finance - Budget Committee Lê Quang Mạnh said that the resolution has completely new content with many regulations that are different from existing regulations of the Law on Corporate Income Tax and a number of other related laws.
Quang also said that a number of National Assembly delegates have requested the Government make an overall assessment of the investment environment when applying the global minimum tax to have appropriate investment incentives and solve problems for existing investors as well as clarify tax incentives for new investors of Việt Nam.
Regarding these contents, the National Assembly Standing Committee said that the Government does not have an overall assessment of the investment incentive system, including incentives in corporate income tax as well as other incentives by non-tax measures, to develop alternatives once the global minimum tax is applied.
The Corporate Income Tax Law has not yet been amended, so after this resolution takes effect, the MNEs having new investments in Việt Nam will be regulated by the Corporate Income Tax Law and this resolution.
The Government has completed this resolution to resolve the issue of global minimum tax payment for current investors. The tax regime for new investors will be resolved by the Government when amending the Corporate Income Tax Law.
Therefore, in the long term, the legislature asked the Government to comprehensively evaluate current tax incentive policies and soon amend the Corporate Income Tax Law along with a plan to adjust the tax rate and tax incentive system.
The global minimum tax, which was approved by the group of seven industrialised economies (G7) in 2021, aims to reduce tax competition between countries and discourage MNEs from profit shifting as a means of achieving tax avoidance. — VNS