Update on changes in Corporate Income Tax under Resolution 107/2023/QH15 in implementation of Pillar 2 on Global Minimum Tax

In the context that many countries attempt to attract foreign investments by loosening tax incentives that the effective tax rates are far below the standard ones, such race among nations poses the risk related to tax evasion, tax avoidance, and profit shifting. Consequently, this has created the momentum for reforming a comprehensive tax system at the global scale through adopting a global minimum tax rate of 15%.

On 29 November 2023, the National Assembly approved Resolution 107/2023/QH15 ("Resolution 107") promising to bring further changes in Corporate Income Tax ("CIT") when implementing the Global Minimum Tax. Vietnam has reinforced its commitment to apply the Global Minimum Tax by enhancing the legal framework for Global Anti-Base Erosion (“GloBE”) Rules (Global Minimum Tax Regulation) to align with Pillar 2 of the Organization for Economic Co-operation and Development (“OECD”).

The main contents outlined in the Resolution are as follows:

1. Taxpayer
2. Qualified Domestic Minimum Top-Up Tax (QDMTT)
3. Income Inclusion Rule (IIR)
4. Tax declaration and payment
5. Other remarks

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