Legal News

[Taxation] Public consultation begins on draft cabinet order regarding global minimum taxation

2024/11/22

On November 14, 2024, a draft decree detailing certain provisions of Resolution No. 107/2023/QH15 on Additional Corporate Income Tax Based on Provisions to Prevent Global Base Erosion, which was approved by the National Assembly on November 29, 2023, was announced.

The draft is open for public comment until December 6, 2024, and the government is seeking opinions from government agencies, the Vietnam Chamber of Commerce and Industry (VCCI), business associations, and general businesses. After the public comment period ends, the draft decree will be revised and reviewed and approved by the government, with formal issuance scheduled for December 2024 or January 2025.

The key timeline for the draft decree is as follows.

1. Identification of constituent entities (subsidiaries, etc.)
If a corporate group subject to the decree has only one constituent entity in Vietnam, that constituent entity will be responsible for additional corporate income tax filings and payments. If a corporate group has multiple subsidiaries in Vietnam, the ultimate parent company must designate and select one constituent entity to file additional corporate income tax returns and pay taxes. The ultimate parent company or constituent entity must then notify the tax office of this selection within 30 days after the end of the fiscal year.

2. Tax registration
The constituent entity responsible for filing and paying taxes must submit tax registration documents to the General Department of Taxation within 90 days after the end of the fiscal year.

3. List notification
The constituent entity responsible for filing and paying taxes must notify the General Department of Taxation of the list of constituent entities subject to Resolution 107/2023/QH15 within nine months after the end of the fiscal year.

4. Filing and Tax Payment Deadline
Constituent entities responsible for tax filing and payment must submit tax filing documents such as the Global Minimum Tax Information Return, Corporate Income Tax Supplementary Return, and Explanation of Differences Between Accounting Standards and Tax Standards to the Tax Authority within 12 months after the end of the fiscal year and pay any additional taxes.

Companies are required to analyze the content of the draft decree, promptly establish reporting and filing systems for each subsidiary, and prepare for necessary tax procedures. Once the official decree is announced, we will provide updates in future legal news.

References:
Draft decree detailing Resolution 107/2023/QH15 dated November 29, 2023